With the passage of health reform legislation and the expansion of Medicaid in 2014, state Medicaid agencies will soon bear the responsibility to purchase cost-effective, quality health insurance for more than 75 million people. According to a new brief released by the Center for Health Care Strategies (CHCS), reformed Medicaid payment policies may be the most significant tool available to states to contain costs and improve quality. The authors say that effective Medicaid payment reform requires:

• Payment fundamentals that accommodate patient acuity, encourage efficiency, collect accurate clinical data and facilitate measurement of quality.
• Innovations that support improved models of care, including medical homes, bundled payments and accountable care organizations.
• Alignment with other public and private payers at the state and local level.
• A dynamic partnership with the Centers for Medicare and Medicaid Services, including both its Medicaid and Medicare leadership.

The brief was informed by a Medicaid payment reform meeting convened by CHCS in April. Participants in the meeting included federal officials, state Medicaid leaders, national payment reform experts and congressional staff.