Here is a market picture for you to consider.
Medicaid is the largest source of public health coverage in the United States – about 75 million Americans are enrolled in Medicaid. In addition, 68.8% of the Medicaid beneficiaries across the country have their health benefits provided through managed care plans – up from 60.5% in 2014 (see 68.8% Is The National Number – What Is Your State Number?).
Now consider that as of October 2016, in 28 of the 39 states that contract with Medicaid managed care organizations (MCOs), at least 75% of all Medicaid beneficiaries were enrolled in those MCOs (see In 28 States With Medicaid Managed Care, At Least 75% Of Beneficiaries Are Enrolled).
This capture of market share by Medicaid health plans has some very specific implications for managers in provider organizations. Essentially, once the decision is made at state policy level to move the Medicaid population to some form of health plan, little remains of the market outside of the health plans. In those states, maintaining a “non-managed-care” Medicaid service line will be difficult.
And couple that with the emerging use of Medicaid health plans to provide Medicaid long-term services and supports (LTSS). Nearly half of states, 23, provided some or all Medicaid LTSS through a managed care arrangement as of July 1, 2016, with 15 states offering managed LTSS on a statewide basis for at least some LTSS populations. It is likely that the pattern, with regard to enrollment, will be the same.
So what does this mean for provider organization strategy if the consumers you serve and the services you provide are being folded into Medicaid health plan coverage? There are four key areas to tend to:
Clinical and administrative infrastructure that is compatible with health plan operations: A value-based market requires new administrative and clinical competencies that demand greater focus on infrastructure – including billing and information technology reporting capabilities, use of decision support tools, customer service capabilities, the ability to exchange health information, specialized financial management systems, provider claims and payment systems, etc. This requires a large investment up-front before your organization is prepared to move forward. Ask yourself if you have the staff and operations in place to be successful – before you contract with a health plan (see Three Competencies For Risk-Based Contracting: Advice From An Executive Who Is There).
Revenue cycle management: Tight health care budgets, either due to economic stress or by health plan design, mean that provider organizations need to have a billing system in place that results in speedier and guaranteed payments. Simply put, revenue cycle management identifies all of the tasks necessary to get paid for services, including those for specific contracts (see A Revenue Cycle Management Primer and The Coordination Of Benefits Issue: A Sticky Wicket For Some).
Health plan contracting and referral generation: Building relationships with health plans and a network of care is key to success in a managed care environment. Provider organizations need to develop programs and services with a payer value proposition in mind and then consistently demonstrate performance. But contracting is just the first step. Operating a value-based system may require a new approach to referrals and consumer marketing – this is a key to succeeding in a field where there will be increased competition for both payer relationships and referrals (see From Payer Vendor To Payer Partner and Three Priorities For Increasing Referrals and Controlling Coordination = Controlling Referrals).
Value-based contracting: It’s all about the “performance” when it comes to value-based reimbursement. This means setting performance targets that meet payer requirements, managing to those targets, and reporting on progress. At the end of the day, value-based care is all about demonstrating that your organization has met both the clinical and financial health plan and payer performance requirements (see For Many Provider Organizations, The Shift To Managed Long-Term Care Is A Double Whammy and Why Value-Based Purchasing Is Harder For Community Behavioral Health – And What To Do About It).
For more, be sure to join the OPEN MINDS team on June 7, 2017 at The OPEN MINDS Strategy & Innovation Institute for the great, managed care focused sessions, “Finding The Opportunities: The Growth Of Managed Long-Term Services & Supports Programs” and “Finding New Opportunities With Health Plans: How To Market To Managed Care.”