Measuring the Impact of Medicaid Accountable Care Organizations on Total Cost of Care across the Perinatal Period

Introduction Medicaid programs have increasingly adopted value-based payment models, such as accountable care organizations (ACOs), to improve quality of care and contain costs. Some evidence suggests Medicaid ACOs have improved outcomes, but little is known about impacts on costs, including for maternity care, which comprises a large portion of Medicaid spending. Methods Leveraging a natural experiment in Massachusetts, we evaluated effects of Medicaid ACOs on total cost of care across the prenatal, delivery, and postpartum periods, including cost subcategories. Using claims data on 150,879 Medicaid-covered live deliveries, we used a difference-in-differences approach to compare costs before (Q1-2016 through Q4-2017) versus after (Q2-2018 through Q1-2023) Medicaid ACO implementation, among Medicaid ACO versus non-ACO deliveries, controlling for patient characteristics. Results Results showed the Medicaid ACO was not associated with statistical change in total cost of care across the perinatal period. Analysis of cost sub-components found the Medicaid ACO was associated with a 5% increase in inpatient delivery costs ($747) and a 21% decrease in emergency department costs (-$69). Conclusion Expanding Medicaid ACOs may be a mechanism for improving care quality without increasing costs.