3 Current Updates Regarding Medicaid & Managed Care

Over the last few years, several updates have been made to Medicaid and managed care. With the Medicaid unwinding process taking place, the Centers for Medicare and Medicaid Services (CMS) and Managed Care Organizations (MCOs) are working together to help Medicaid-eligible members retain their current coverage. Direct Care Innovations is watching these changes closely to keep our healthcare technology relevant and ensure your business runs smoothly. While the updates to Medicaid and MCOs are numerous, join us as we review three of those changes below.

1. Most States Deliver Medicaid Services Via Capitated Managed Care 

Each state is free to design and administer its Medicaid programs, such as choosing how services are delivered and how care is provided, as long as they remain compliant with federal rules. In 2023, 41 states provided care to Medicaid-eligible individuals through capitated managed care. A capitated managed care contract, which includes CMS, a health plan, and the state, provides comprehensive care services to members and pays healthcare providers a flat monthly fee for their services. Recent data shows that implementing capitated managed care increases budget predictability, but there is no evidence that managed care influences access to care or healthcare costs.

2. States Have the Power to Decide Which Medicaid Services to Cover

MCOs provide a broad range of healthcare services to Medicaid members. With Medicaid Managed Care, states have the power to make decisions regarding services that are included in MCO contracts. Common benefits that are most likely to be cut from MCO contracts include pharmaceutical, dental, behavioral health, and long-term services and support. With that being said, many states are choosing to add some of these services back into their MCO contracts. It is also expected that states will need to expand their Medicaid programs to include these benefits. The health of members may decline, requiring further medical care, the cost of services and plan contracts are bound to increase, and new members will increasingly be added, such as adults who now meet requirements for Medicaid under the Affordable Care Act.

3. CMS Recommends Changes to Improve the Prior Authorization Process

This past year, CMS finalized standards that will improve Medicaid’s prior authorization process. A 2023 survey revealed that one in five Medicaid recipients had higher incidents of receiving timely prior authorizations than other insurance plans. About 25% of individuals said their health worsened due to these long wait times or other health plan issues. A 2023 Office of Inspector General report discovered concerns regarding Medicaid and prior authorization denial rates. Recommendations to CMS by the Office of Inspector General include enhancing state procedures that monitor prior authorization denials. Medicaid and CHIP Payment and Access Commission also included seven recommendations for improving the prior authorization appeals process and optimizing oversight of MCOs.

DCI’s Software for Managed Care Organizations

Our team has experience working with both providers and technology, making us uniquely situated to understand the respective pain points of home health care. We serve MCOs with our comprehensive state-of-the-art business management software, including electronic visit verification, EVV data aggregation, and more. Call (480) 295-3307 to learn more or request a sales demo today.