As the new presidential administration reduces Medicaid funding and affords greater flexibility to state agencies, implications will extend well beyond the public sector. While the final outcome of evolving healthcare legislation is uncertain, providers and commercial payors can best prepare by aligning their organizations and strategic priorities with efficient, higher-value care, services, and initiatives.
How should providers approach this change?
As providers prepare for change, they should consider focusing on their:
Patient Experience Programs and Initiatives – Patients, and their caregivers, will likely face a myriad of changes around how care is reimbursed and the parameters of insurance coverage. Even more fundamentally, impending AHCA legislation introduces the possibility of losing existing insurance altogether. In the face of these uncertainties across the patient journey, it is critical that providers arm patients with the additional information, tools, and assistance to navigate changes in their respective state Medicaid programs. Providers have an opportunity to increase patient trust, satisfaction, and improve patient experience by providing these services as the Medicaid landscape changes.
Virtual Health Programs and Initiatives – In an environment where block-grant funding mechanisms are strongly considered and Federal funding for Medicaid may be reduced by 25% over the next 10 years,1 providers that proactively leverage virtual health-based delivery models will thrive. Platforms, initiatives, and policies that promote virtual health delivery models will enable providers to achieve the quality and outcomes government payors are seeking. These platforms will also enable providers to deliver care profitably despite reimbursement rates that will likely decline over time.
Operational Performance Improvement Program and Initiatives – It is generally expected that the number of uninsured Americans will increase if the AHCA or a Senate-created bill based on the AHCA passes. The non-partisan Congressional Budget Office (CBO) estimated that 24 million additional people would be uninsured over the next 10 years if a previous version of the AHCA became law.2 Providers should expect to provide an increased amount of charitable and uncompensated care. Although there are ways to shift some of the uncompensated care cost via rates charged to private insurers, providers should not expect that this will fully cover the increases in care for which hospitals do not expect to be, or are unable to be, reimbursed. For this reason, providers should establish or re-establish operational performance initiatives to ensure minimal operational cost, while maintaining a high standard of care. These performance improvement efforts will mitigate any negative financial effects of an increase in uncompensated care.
How should commercial payors approach this change?
In June 2016, America’s Health Insurance Plans (AHIP) released an Issue Brief titled The Medicaid Program and Health Plans’ Role in Improving Care for Beneficiaries: What You Need to Know.3 Although almost a year has passed since the Issue Brief was released, it can still serve as a guide to pending changes in Medicaid administration and how commercial payors should react to these changes.
As commercial payors prepare for change, they should consider focusing on their:
Beneficiary Outreach Programs and Initiatives – As Medicaid programs evolve over time, it will be critical that commercial payors providing Medicaid health plans strengthen existing beneficiary outreach mechanisms and explore innovative ways to communicate with beneficiaries to ensure awareness around impending changes in care. These communications initiatives should be proactive, continually learning, and properly segmented to deliver the most accurate information in a timely manner.
Digital Technology Programs and Initiatives – Pending legislation will likely require Medicaid program partners to take on more responsibility to help reduce costs and improve healthcare outcomes of Medicaid beneficiaries. Commercial payors who provide Medicaid health plans should seek to expand their digital technology capabilities. Digital tools such as smartphone-based applications can help beneficiaries engage in healthier lifestyles and take ownership of their health and wellbeing. Plans can work in partnership with Medicaid programs to be “proactive payors” and encourage behaviors that promote cost-efficient improved healthcare outcomes for Medicaid beneficiaries.
As told by the daily headlines gracing news and social platforms, Medicaid and the broader healthcare landscape is evolving more rapidly than most Americans can keep pace. As uncertainty grows, organizations must think beyond how they’ll respond and react to change. Players across healthcare should instead work to proactively align their organizations to deliver higher-value, more innovative solutions in the face of new state healthcare challenges. Agility and adaptability to policymaker decisions will be fundamental to the ultimate success of new programs and organizations.
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This piece was co-authored by:
Mike is a Vice President with North Highland. He has over 20 years of professional experience in management consulting, business development, product management, and new initiative implementation in both private sector and public sector environments
Erik is a Senior Consultant with North Highland. He has over five years of experience in management consulting, the healthcare industry, and state government. Specific areas of expertise include process improvement, project management, policy analysis, legislative & regulatory analysis, stakeholder engagement, and effective communication.
Maura is a Senior Consultant with North Highland. She has over seven years of experience in healthcare, insurance, and transportation industries. Specific areas of expertise include project management, process design and implementation, process improvement, stakeholder engagement, communication strategy, and talent management.