Latest MCO Leader Survey Results 

For every issue of the Medicaid Black Book, we poll Medicaid executive leaders about their current concerns and challenges.

Here are the things top of mind for many of them (not ranked in order of importance / concern) in this quarter's survey:

Network transformation - The # issue for leaders surveyed was getting providers to shift into more advanced payment models. As states require increasing levels of MCO payments to be in VBP models, the challenges of moving fee-for-service provider contracts into value-based contracts are mounting. As MCO contracts with states typically have an escalating percentage of provider payments that must be in a value-based contract, the pressure on providers to change financial tools and models has been increasing. Many states have 2020 as the most intense year of increase in contracts, so 2019 has been the “get ready” year which is driving challenging discussions between plans and providers. For some providers it’s a simple re-alignment of incentives; for others it’s a completely different way of doing business. The contract management scope is also proving to be significantly more than expected.

Claims and provider data cleanup- As more and more reporting is required of MCOs, more leaders are reporting issues in data quality. Several leaders report seeking outside help in improving data quality.

BH provider shortages – Leaders reported frustration with shortages of behavioral health providers in Medicaid networks. Most leaders want to impact the move towards true integration of behavioral health and physical health, but lack of providers in many markets is a barrier. Some have tried to make things easier with co-location support, but most physical health providers don’t have facilities that would allow BH providers to co-locate.

Network management is getting harder- Consistent with recent MACPAC findings, MCO plan leaders report that fewer and fewer key specialists will enter into MCO contracts. And leaders are starting to see a decline in PCPs who take Medicaid as well.

Next stage in Medicaid and telemedicine- Survey respondents were looking for ways to use telemedicine more in their operations but were finding it difficult to move beyond hospital-based practices due to low patient volume. Some reported efforts with novel contracting arrangements, but complexities were challenging.

Legislative optics and understanding – As most states were in legislative session, the annual challenge of helping lawmakers understand Medicaid operations came up in the surveys. In addition to education efforts, most plans are preparing for the annual set of changes that will need to be implemented coming out of session. Some respondents mentioned the challenge of communicating the “value story” of Medicaid during a time on increased pressure to control costs.

Spread pricing issues may impact MLR discussions in the near term-  On the heels of high profile PBM spread-pricing stories in both Ohio and Kentucky, some states are already investigating whether MLR has been correctly reported by MCOs as it relates to the costs to PBMs. Concerns center around whether the PBM costs have been placed in the correct cost categories. If the “spread’ was placed in the medical costs (the numerator) for MLR, it may be inaccurate. For MCOS that simply place all PBM costs in medical (and do not separate costs of drugs from PBM administrative costs in MLR calculations), there may be some vulnerabilities in reporting accuracy, and, consequently, future recoupment risk.

Buy in programs appear to be gaining traction- Most plan CEOs we’ve surveyed have historically considered buy-in programs a novel but naïve concept, some expressed concern this quarter that the public discussion has been oversimplified to a point where voters may advocate for buy-in programs in at least a few states in 2019. From the plan CEO perspective, few expect the premiums to cover actual costs and that any state subsidies or capitation would fail to make up the difference. For plans with substantial experience on the exchanges, buy-ins seem like an even greater risk given experience with risks to CSRs and other protections.

Tech investments continue to be made; Wonder when they will finally deliver- Plan leaders say that they have been investing in tech for at least 10 years, but still don’t see the promised returns. Some leaders suggest that their buying decisions moving forward may become more tied to longer term performance terms. Most Medicaid plan leaders see the recent push towards investments in artificial intelligence (AI) as the latest in a long line of tech fads (with blockchain another recent example).

Work requirements uncertainty- Plan leaders thought in early 2018 that work requirements would go away, but only more states have joined the line for approvals. Most plan leaders surveyed don’t object to them in concept but do worry about the impact on churn on the rolls. Several leaders expressed a desire to connect work requirements reporting to programs that help with job training and other social determinants of health that plans have an interest in providing.


x