What the ACE Kids Act Means for Children's Health

What the ACE Kids Act Means for Children's Health

States can opt into the program to support better care coordination for children with medically complex conditions.

The Advancing Care for Exceptional (ACE) Kids Act was signed into law to improve care for children with medically complex conditions (CMC) who are enrolled in Medicaid. The law creates a new state Medicaid option to provide coordinated care for CMC through health homes. 

Through ACE Kids, states can work collaboratively with children's hospitals and community providers to expand access to patient-centered, pediatric-focused health homes. As envisioned in the ACE Kids Act, these coordinated care models are specifically tailored to these children and involve multiple providers and services across state lines.

Overview of the ACE Kids Act

  • Eligible children. To participate in an ACE Kids health home, a child must have at least one chronic condition—cumulatively affecting three or more organ systems and severely reducing cognitive or physical functioning—and require medication, durable medical equipment, therapy, surgery or other treatments. Children with a life-limiting illness or rare pediatric disease are also eligible.
  • Qualifying as a health home. Providers and health teams must be able to coordinate prompt care of CMC, develop a pediatric family-centered care plan, coordinate access to subspecialized care, and coordinate appropriate care with out-of-state providers.
  • State financing. States that opt to create health homes will receive a higher Medicaid federal matching rate for six months for health home services. The bill also provides a total of $5 million for state planning grants.
  • Requirements for states. States must submit a Medicaid state plan amendment to the U.S. Department of Health and Human Services that reflects the statutory requirements, as well as guidance from the Centers for Medicare and Medicaid Services (CMS).
  • Reporting requirements. States must report to CMS on:
    • The number of CMC who are enrolled in a health home and the nature, number and prevalence of chronic conditions, illnesses, disabilities and rare conditions the children have.
    • The type of delivery systems and payment models used.
    • The number and characteristics of providers and health professionals designated as ACE Kids health homes.
    • Quality measures developed specifically for services provided to this population of children.
    • The extent to which the children receive health care services from out-of-state providers.

Key considerations for children's hospitals

Children’s Hospital Association (CHA) has actively engaged with children’s hospitals interested in pursuing ACE Kids implementation with their states. This white paper outlines key takeaways from those discussions on the strategic and operational considerations for implementation. These considerations include: 

  • Implementing a care model. The model should include capacity to deliver medical and health home services that go beyond traditional CMC care, delivered outside the hospital across a wide geography.
  • Building out robust data sets and analytic skills. Analytic capability will be needed to identify target populations, understand and predict costs, and develop and track interventions and quality metrics.
  • Developing a preferred approach to alternative payment models (APMs) for the CMC population. In adopting ACE Kids, your state may either require or encourage APM-based payments.
  • Developing a state advocacy strategy that addresses gaps in care for CMC.