On July 10, 2012, CMS released two letters to state Medicaid agencies on “Developing and Implementing Integrated Care Models in Medicaid Programs.” The first letter describes the concept of “Integrated Care Models,” which could include medical/health homes, accountable care organizations (ACOs), ACO-like models, and other arrangements that emphasize person-centered, continuous, coordinated, and comprehensive care. The second letter describes flexibility in the Medicaid statute that supports delivery system and payment reforms in fee-for-service systems. CMS expects future communications to states to address methodologies for shared savings arrangements, a quality and cost measures framework, achieving results through managed care contracts, and alignment with other federal initiatives.