As the Medicaid Managed Care World Evolves Forward, a Look at the Vulnerabilities and Gaps

Dec. 15, 2020
A survey of Medicaid managed care plans has confirmed widely understood perceptions of important gaps that need to be addressed in the Medicaid managed care sphere, including around data and information sharing

As Healthcare Innovation Senior Editor David Raths reported on Dec. 9, “A survey of Medicaid managed care organizations (MCOs) found that key barriers to increasing value-based purchasing arrangements continue to be providers’ readiness and willingness to participate in alternative payment models as well as their limited information technology capabilities. The newly released Institute for Medicaid Innovation’s annual 2020 survey reflects 2019 data from Medicaid MCOs, representing 67 percent of all covered lives in Medicaid managed care across 37 states. IMI’s goal is to equip Medicaid stakeholders with the information needed to accurately articulate the national narrative about Medicaid managed care.”

What’s more, Raths wrote, “Approximately 93 percent of all Medicaid MCO respondents used an alternative payment model, or value-based purchasing arrangement, with 100 percent of medium (i.e., 250,001 to 1 million covered lives) and large (over 1 million covered lives) health plans reporting engagement in 2019. Half of the health plans implemented value-based purchasing arrangements with primary care providers while very few established similar arrangements with behavioral health providers, dentists, home and community-based service providers, and long-term care facilities, the report found. An increase in establishing VBP arrangements with dentists was seen from 2017 to 2019, while a decrease was seen in implementation of arrangements with home and community-based services providers, long-term care facilities, and orthopedics. Furthermore, 43 percent of health plans indicated that the percentage of payments to hospitals through alternative mechanisms was less than 15 percent.” He also noted that 73 percent of health plan respondents reported being at risk for behavioral health services for their Medicaid members. And he quoted Dianne Hasselman, M.S.P.H., deputy executive director of the National Association of Medicaid Directors, who said in a Dec. 8 webinar sponsored by IMI to discuss the publication of the survey, that “state Medicaid directors have given a tremendous amount of thought to how to fix foundational cracks in Medicaid that have been laid bare through COVID-19.”

The survey that Raths cited, “Medicaid Access & Coverage 2019,” was published by the Institute for Medicaid Innovation, whose mission, as described on the organization’s website, “s to improve the lives of Medicaid enrollees through the development, implementation, and diffusion of innovative and evidence-based models of care that promote quality, value, equity, and the engagement of patients, families, and communities. The vision of the Institute for Medicaid Innovation is to provide independent, unbiased, nonpartisan information and analysis that informs Medicaid policy and improves the health of the nation,” the website notes.

The report found that “Approximately 93 percent of all Medicaid MCO respondents utilized an alternative payment model, or value-based purchasing arrangement, with 100 percent of medium (i.e., 250,001 to 1 million covered lives) and large (over 1 million covered lives) health plans reporting engagement in 2019. Half of the health plans implemented value-based purchasing arrangements with primary care providers (i.e., physicians, advance practice nurses), while very few established similar arrangements with behavioral health providers, dentists, home and community-based service providers, and long-term care facilities. An increase in establishing VBP arrangements with dentists was seen from 2017 to 2019, while a decrease was seen in implementation of arrangements with home and community-based services providers, long-term care facilities, and orthopedics. Furthermore, 43 percent of health plans indicated that the percentage of payments to hospitals through alternative mechanisms was less than 15 percent. The most common operational barrier to implementing value-based agreements, as reported by the health plans, was data reporting to providers (86%). The most common external factors influencing adoption and innovation were providers’ readiness and willingness (100 percent) and providers’ information technology (IT) capabilities (79 percent). Longitudinally, almost all external factors, except providers’ readiness and willingness, which influence adoption and innovation in VBP/APMs, decreased over time, from 2017 to 2019. The percentage of Medicaid MCOs that selected state requirements limiting VBP/APM models, uncertain or shifting federal policy requirements/priorities, and the impact of 42 CFR Part 2 on limiting access to behavioral health data decreased by over 50 percent from 2017 to 2019.”

Importantly, the report found, “In 2019, all respondents indicated that they offer targeted social determinants of health (SDOH) programs. The most common populations that were targeted for SDOH programs were homeless/housing insecure (87 percent), people who were pregnant (73 percent), and adults with serious mental illness (67 percent). A comprehensive table on page 61 provides detailed information on the types and percentages of health plans offering targeted SDOH strategies (e.g., maintained a database of community and social service resources) for specific social needs (e.g., housing, social isolation, violence). It was notable in the survey findings that plans used multiple SDOH screening tools and not just one, across all Medicaid MCO respondents. Half of the health plans indicated utilizing an internally developed or adapted tool, with 13 percent not using any tool.”

So what does all of this mean? A great deal. First of all, and this is news to no one, as expected, virtually all large and medium-sized health plans that participate in state-sponsored Medicaid programs, are now involved in value-based programs or alternative payment models. And that means that the hospitals, physicians, and health systems participating in Medicaid are also involved in value-based healthcare. This is a trend that has been years in the making. And it is one that by and large has been recognized as an important trend for the healthcare industry overall, as managed Medicaid is far more efficient, cost-effective, and just-plain-organized than discounted-fee-for-service Medicaid is.

All that said, this is also a challenging trend for the hospitals, physicians and health systems that rely significantly on Medicaid reimbursement, which has never been generous, and now has become extremely challenging for many. Among those types of providers most strongly impacted are the nation’s children’s hospitals, which on average receive at least half of their revenues from Medicaid; and physicians and physician groups that serve impoverished and/or disadvantaged communities, and especially communities of color, including those clinicians who are working in the nation’s federally qualified health centers (FQHCs). Many of these organizations have been operating on shoestring budgets for years—even decades. So the challenges they’ve been facing are naturally intensified as this trend goes forward. Still, Medicaid managed care is more organized, and provides a level of population health management and care management that simply does not exist in non-managed Medicaid.

And that really matters when it comes to such issues as the social determinants of health. As the IMI survey found, health plan leaders are moving forward on SDOH work focusing on such issues as homelessness/housing, pregnancy, and mental illness. Health plan leaders appear to be ready to really take on those issues on a broad scale, and that is a hugely good sign for providers, because the SDOH challenges continue to be enormous among Medicaid patients/recipients.

Data- and information-sharing remains an area of weakness, as the survey results found. On the one hand, the report noted that “Half of the health plans implemented value-based purchasing arrangements with primary care providers (i.e., physicians, advance practice nurses), while very few health plans established similar arrangements with behavioral health providers, dentists, home and community-based service providers, and long-term care facilities. Health plans reported piloting various population-specific VBP arrangements with obstetrics/gynecology, behavioral health, skilled nursing facilities, and for members with specific conditions that spend more than a specific financial threshold. Across three years of the survey, there were no trends in VBP implementation within specific populations. The most common strategies were payment incentives based on performance measures related to access to care (64 percent) and payment incentives for availability of same-day or after-hours appointments (43 percent). Additional APMs used between providers and Medicaid MCOs included per member per month payments for care coordination, payments for care coordination for members who misuse services/medications, and owner risk-based arrangements. Furthermore, 43 percent of health plans indicated that use of alternative payments to hospitals was less than 15 percent.”

However,” the report noted, “the most common operational barrier as reported by the health plans was data reporting to providers (86 percent). The most common external factors influencing adoption and innovation were providers’ readiness and willingness (100 percent) and providers’ information technology (IT) capabilities (79 percent).” As part of the write-in option of the VBP section of the survey, the respondents indicated the following state and federal barriers to VBP and/or APMs, including: state and federal restrictions on data sharing and lack of consistency in reported metrics; state requirements that limit VBP/APM model development by Medicaid MCOs.”

So, clearly, there are huge gaps around data- and information-sharing in this area. There is so much opportunity in Medicaid managed care going forward; but all the burdens on the program, along with the challenges involved in reforming and re-visioning Medicaid programs nationwide, will require that the leaders at patient care organizations work closely and effectively with health plan leaders, to really move the needle in this vital area. Next year, 2021, will be a critical year for the Medicaid world—but also one filled with opportunity for change.

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