First Medicare, Now Pennsylvania Medicaid

In April, the Pennsylvania Department of Human Services (DHS) announced groundbreaking changes to its Medicaid HealthChoices physical health managed care program that are a signpost for Medicaid contracting across the country. The big change? The new contract agreements require a shift toward greater value-based payments by managed care organizations (MCO) to provider organizations. In effect, over $6 billion in Pennsylvania Medicaid payments will now be tied to quality and outcomes (see Pennsylvania Medicaid Negotiating With Eight MCOs For Physical HealthChoices Contracts).

The state is now negotiating three-year contracts with the new MCOs that will require them to increase . . .