On March 15, Ohio Governor John Kasich announced his proposal to balance Ohio’s budget (the Blue Book).   Because the Ohio budget is in large part reserved for Medicaid, health care changes play a significant role in the new budget plan.
Governor Kasich’s budget proposal included establishing pediatric accountable care organizations (Pediatric ACOs).  The following discussion outlines the context and few details in Kasich’s Ohio Pediatric ACO proposal:

  • 37,544 disabled children are served through Ohio’s fee-for-service Medicaid program
  • This patient population has complex medical and behavioral health needs for this patient population but primary care and care coordination is lacking
  • Current cost to Medicaid is $313 million per year
  • $375 million in savings associated with move from retroactive to prospective payment are expected
  • $288 million in savings from better utilization control are expected
  • Net expense of $87 million in SFY 2013
  • Three phase implementation:
    • Phase I – Disabled children not residing in an institution or receiving home and community-based waiver services will be enrolled in Medicaid managed care beginning in July 2012
    • Phase II – Managed care plans will be encouraged to contract with developing ACOs which will be responsible for care coordination and will assume portion of risk for children enrolled in the ACOs
    • Phase III – ACOs will contract directly with state, assuming care coordination and financial risk

The Executive budget proposal assumes that expansion of managed care to include children with disabilities, a transition component to establishing pediatric accountable care organizations, which will allow health plans to spread their administrative expenses across more lives.