“Variability in Medicaid is the rule rather than the exception. States establish their own eligibility standards, benefit packages, provider payment policies, and administrative structures under broad federal guidelines, effectively creating 56 different Medicaid programs—one for each state, territory, and the District of Columbia.”

– Medicaid and CHIP Payment and Access Commission (MACPAC)

Understanding Medicaid MCO Claims Management Risks

What does this mean for the 280 Medicaid Managed Care Organizations providing comprehensive care for over 55 million US adults? The complexity and variability in state-by-state regulations have health plan executives scrambling to keep up with each state’s latest Medicaid payment policies and fee schedules.

Within each state Medicaid program, there are numerous pricing models that may be based on patient population or geography. For the same procedure on a similar patient, a hospital in Stockton, California may have a different pricing model than a hospital in Sacramento. The diversity and economic status of the Medicaid population mean it can also be a more medically complex population than other payer sectors.

With the increasingly complex and dynamic state-by-state regulatory and payment environment, it has become nearly impossible to keep up to date with and adapt to the constant and nuanced changes in Medicaid payment policies and fee schedules.

But what are the real risks of not keeping up to date with the rapidly changing, dynamic world of Medicaid pricing? When fee schedules and configuring payment policies aren’t updated in real time?

1. Health plan waste – Internal team is responsible for updating content, leading to high overhead, inaccuracies, and significant effort spent on IT infrastructure and maintenance
2. Provider abrasion – Slow and inconsistent payments and repeated overpayment recovery strain payer-provider relationships
3. Competitive disadvantage – Inaccuracies, lag, and strained provider relations can impair a health plan’s chances of contract renewals and winning bids.
4. Overpayments – Using the wrong edits and price increases the risk of overpayments and downstream recovery
5. Denials & Rework – Delayed fee schedule updates can lead to inaccurate claims. Payment policy and fee schedule as an incorrect fee schedule will likely not deny a claim.
6. Missed Reimbursements & Incorrect Payments – Incorrect claims drive missed reimbursements & inaccurate payments
7. Lost Time Resolving Payments Disputes – Payment disputes take up precious time

These factors highlight the Medicaid MCO Claims Management Risks and show the traditional approach of Medicaid MCO Claims Management is inefficient and drives unnecessary costs for the health plan. For health plan leaders that want to reduce these inefficiencies and drive down claims processing costs and medical waste, they need to think differently and invest in solutions that lighten the load on internal teams while providing frequent and accurate data updates health plans need to succeed in managed care.

Download our white paper Medicaid MCOs: It is time for a new claims management strategy to understand how our Payment Integrity solution, Source, is revolutionizing the way Medicaid claims are handled.

Through value-based care arrangements, health insurance companies have the opportunity to share the burden of care delivery costs and rewards of high-quality care with their provider networks, so it’s no surprise that many organizations are headed that way. However, due to disjointed systems and siloed data sources, most payers are still restricted to small pilot projects that are limited in scope and impact. Very few payers have been able to launch large-scale value-based initiatives that deliver on the promise of true value-based care.

The Journey to Value

One could argue that health insurance companies have been on a journey toward value-based care since the 1990s when capitated rates were first introduced. But as CMS motivated providers with federal incentives to digitize their operations and move to electronic health record (EHR) systems through the Affordable Care Act, massive amounts of clinical data became available. At the same time, electronic claims became more prevalent, and the stage was set for what we now call value-based care.

The vision of being able to leverage claims and clinical data to reduce the cost of care, improve patient outcomes, and increase member satisfaction was formed. However, most of the clinical data remained locked within the systems that generated it. Claims data also sat idle and stuck within the core claims administration systems that produced it. Plus, non-medical data, such as social, economic, and behavioral data was available but highly unstructured and therefore largely unavailable for inclusion and analysis.

Disparate data and disjointed systems presented significant barriers to health insurance companies’ ability to execute value-based, risk-sharing arrangements rapidly and successfully. For payers that are operating on outdated systems, those barriers still exist today and pose significant threats to their ability to compete in the future as the industry moves away from fee-for-service toward value-based care models.

Modern Technology Breaks Down Barriers

While progress has been made among the provider, payer, and vendor communities when it comes to exchanging data through standard interoperability protocols, those payers who are equipped with modern systems on modern architectures are better positioned to succeed in a value-based care environment. Why? Because to achieve true value for the payer, provider, and member, the claims management, care management, and member engagement systems must work together seamlessly.

With modern technology solutions like those from HealthEdge, exchanging insights and integrating workflows across the entire spectrum is possible. This vision of end-to-end automation with the exchange of real-time data that can equip care managers, providers, and plan administrators with the right information at the right time to make the right decisions form the basis of HealthEdge’s recent acquisitions and product investment strategies. In the HealthEdge ecosystem, best-of-breed systems share real-time data across functional business processes, no matter where the data or the system functionality originates.

A HealthEdge Example

One health plan that is making great strides with value-based care models is Independent Health, a New York-based, not-for-profit organization serving more than 375,000 members. The leadership team wanted to transition from the traditional fee-for-service (FFS) model to drive down soaring costs and positively impact patient outcomes, and they chose HealthRules Payor to help them make the transition.

The secret? Building strong relationships with their providers based on data, which could be easily shared from the system.

“When we give providers data that show how they are performing relative to required or recommended services for members within various demographics and disease states, we’re doing so with the ability to drill down to the individual patient level,” explains Dave Mika, vice president, Enterprise Core System Operations at Independent Health. “When we understand where a single patient stands relative to utilization of inpatient and outpatient services, we can offer clarity into everything from who needs to be more active in managing their own care to how cost calculators and digital health tools can be better utilized – by providers and their patients.

The results were impressive. In one use case, Independent Health targeted a series of approximately 5,000 patient encounters with the goal of reducing wasteful practices in a post-acute setting – including readmissions and avoidable admissions. The result: a savings of $14.8M, which represented a cost reduction of 10 percent.

Independent Health reports that 98 percent of primary care practice members are now in full capitation contracts, with solid alignment of goals between Independent Health and its providers. Pay for value has improved patient outcomes and lowered healthcare costs, all the while increasing customer satisfaction and overall health in the community.

Many Approaches. One Solution.

Payers are approaching value-based care in different ways, and different aspects of their businesses are typically further along than others. Whether the organization is focused on improving clinical care to improve member outcomes or more focused on containing costs through creative pricing programs, the HealthEdge portfolio of solutions can pave the way.

“Value-based care comes in many different forms, but it’s really based on how health plans reward providers for delivering good service and good care to the member. We are helping our customers take a more member-centric focus and contract with providers who share their common vision.”

– Steve Krupa, CEO HealthEdge, IMPACT 2021 Customer Conference

The HealthEdge integrated ecosystem of products and partners work together seamlessly to help health plans accelerate the pace by which they can create and implement successful value-based care programs. As plans seek to align with provider partners who can share the responsibilities of care delivery costs and high-quality care, now is the time to embrace modern technologies that can help bring true value to value-based care.

To learn more about how HealthEdge can help your organization embrace value-based care arrangements with greater confidence, visit www.healthedge.com or contact us at [email protected].

Download the rest of the series here: 

The Foundation: End-to-end Business Automation

The Digital Transformation Journey: Real-Time All of the Time

Opportunity is the Name of the Game in Today’s Health Insurance Market