Medicare-Medicaid Accountable Care Organization (ACO) Model

The Medicare-Medicaid ACO (MMACO) Model is focused on improving quality of care and reducing costs for Medicare-Medicaid enrollees. The MMACO Model builds on the Medicare Shared Savings Program (Shared Savings Program), in which groups of providers take on accountability for the Medicare costs and quality of care for Medicare patients. Through the Model, CMS will partner with interested states to offer new and existing Shared Savings Program ACOs the opportunity to take on accountability for the Medicaid costs for their assigned Medicare-Medicaid enrollees.

Model Details

Some of the highest-need, highest risk Medicare beneficiaries are those enrolled in both Medicare and Medicaid. In current Medicare ACO initiatives, beneficiaries who are Medicare-Medicaid enrollees may be attributed to ACOs. The Medicare ACO, however, does not have financial accountability for the Medicaid expenditures for those beneficiaries.

The Medicare-Medicaid ACO Model is an initiative designed by the CMS Innovation Center for new and existing Shared Savings Program ACOs wishing to take on accountability for the full spectrum of Medicare Part A, Part B, Medicaid costs, and quality for their patients. Certain aspects of the Model may vary by state but the over-arching principles and parameters will be consistent across the Model. If Medicare-Medicaid ACOs in the state generate Medicare savings for their Medicare-Medicaid enrollees, states (as well as the Medicare-Medicaid ACO) may be eligible to share in those savings with CMS.

Through the Medicare-Medicaid ACO Model, CMS seeks to encourage participation from safety-net providers in Alternative Payment Models. Medicare-Medicaid ACOs that qualify as “Safety-Net ACOs” will be eligible to receive pre-payment of Medicare shared savings to support the ACO’s investment in care coordination infrastructure.

CMS has released a Request for Letters of Intent from states that wish to work with CMS to design certain state-specific elements of the Model, such as the details of the Medicaid financial methodology and shared savings/shared losses arrangements, selection of additional quality measures, and additional ACO eligibility requirements. States will also have the option to include additional Medicare-Medicaid enrollees not assigned under the Shared Savings Program and/or Medicaid beneficiaries in the target population for the Model, subject to CMS approval.

State Eligibility

The Medicare-Medicaid ACO Model is open to all states and the District of Columbia that have a sufficient number of Medicare-Medicaid enrollees in fee-for-service Medicaid. CMS will enter into participation agreements with up to six states, with preference given to states with low Medicare ACO saturation. Additional eligibility requirements and details about the application process are provided in the Request for Letters of Intent.

States must follow all rules, including those related to Medicaid coverage, payment and fiscal administration that apply under the approach they are approved to offer. CMS will work with states to determine the appropriate Medicaid authority for their desired approach. State participation in the Model is contingent upon obtaining any necessary approvals and/or waivers from CMS.

How to Apply - States

States may choose from three options for when the first 12-month performance period for the Medicare-Medicaid ACO Model will begin for ACOs in the state: January 1, 2018; January 1, 2019; or January 1, 2020.

For consideration to begin the first performance year of the Model on January 1 of the year indicated, interested states must submit an LOI no later than 11:59pm Eastern Time on or before the following dates:

State's Preferred 1st Performance Year
Start Date

Deadline to Submit Letter of Intent
2018 January 20, 2017
2019 August 4, 2017
2020 August 3, 2018

CMS encourages interested states to submit a Letter of Intent as early as possible to begin the development of the state-specific aspects of the Model and the Model application process. The steps necessary to finalize the state-specific aspects of the Model may vary by state, therefore submitting a Letter of Intent prior to the applicable deadline is not a guarantee that the Medicare-Medicaid ACO Model in that state will begin on the state’s preferred first performance year start date. Letters of Intent from states must be accompanied by at least one letter of interest from a provider or provider organization in the state.

A Letter of Intent template is provided in Appendix A of the Request for Letters of Intent (PDF). Letters of Intent must be submitted by email to

Section IV. of the Request for Letters of Intent (PDF) provides information on the application process.

How to Apply - ACOs

CMS is not yet accepting applications from ACOs to participate in the MMACO Model. Once a state’s application is approved, a Request for Applications to ACOs will be released to providers in the state. Providers wishing to participate in the development of the state-specific aspects of the Model may submit a letter of interest along with the state’s Letter of Intent.

Additional Information