Potential seen for big financial paybacks from insurers to Medicaid

MM Curator summary

Georgia is getting ready for its next round of MCO procurements.


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The state’s Medicaid agency is setting up plans for a health insurer bidding competition that will award a new multibillion-dollar medical contract.

“We’ll be looking for the best bang for the buck,” Frank Berry, commissioner of the Georgia Department of Community Health (DCH), said last week at an agency board meeting.



The current Medicaid insurers are being paid a total of about $4 billion a year for delivering medical services to more than 1 million members.

Long before a new contract is reached, there could be a substantial payback of money by the insurers, called care management organizations (CMOs), to the government program.

According to industry rumors, the “clawbacks” of money from these insurers in Georgia could exceed $200 million.

Medicaid is jointly financed by the state and federal governments, covering low-income and disabled residents. The CMO insurers – Peach State, Amerigroup and CareSource – are paid a per-member, per-month rate to care for Medicaid members.

DCH officials told GHN that they are “reviewing for any clawbacks that may currently be unresolved.”

Clawbacks come when an organization believes it has overpaid for services, and “claws back that money,” said Bill Custer, a health insurance expert at Georgia State University. “It happens quite a bit in Medicare and Medicaid. Depending on the amount, it may be a big deal or not.”

State officials did not disclose the amount under review.

An insurance industry official who represents the CMOs, Jesse Weathington, also did not specify the amount of money being scrutinized.

“We appreciate Commissioner Berry’s willingness to have further discussion about the true effects of the COVID-19 pandemic on Medicaid,” said Weathington, executive director of the Georgia Quality Healthcare Association, in a statement Wednesday. “Like other health plans, we saw [medical care] utilization bounce back to normal levels very quickly following the statewide shutdown last year.  We look forward to working with DCH to ensure their estimates are based upon factual data.

“Our mission to improve health care outcomes in the most cost-efficient manner for over 1.5 million Georgians remains the same,” he said, “and not even a 100-year pandemic will deter us from that objective.”

Expanding managed care?

The current CMO contract is set to expire June 30, 2022. But DCH says it’s looking to extend the contract for another two years ”to allow for additional time to complete the new procurement.” That would mean an expiration date of June 30, 2024.

DCH officials said the state aims to focus primarily “on quality, performance and [medical] outcomes” with the new contract.

An open question is whether the state will eventually launch managed care for members who are eligible for Medicaid because they are “aged, blind or disabled.”

DCH said it “will first seek to explore what is best for this population in terms of quality, performance and outcomes prior to making this determination.

Many states have moved their aged and disabled Medicaid beneficiaries into managed care.

Georgia State’s Custer said such a shift would require the formation of provider networks to serve that population, such as nursing homes.. An estimated 75 percent of nursing home residents in Georgia are covered by Medicaid.

Managed care for the aged, blind and disabled “would look very different” from the current format, Custer said. “The idea is to develop a medical home for that person.” A “medical home” is a model of care in which a patient’s total medical needs are coordinated by a specific provider.

The state would have to focus on monitoring quality of care for such an arrangement to succeed, he added.


Clipped from: http://www.georgiahealthnews.com/2021/05/potential-big-financial-paybacks-georgia-insurers-medicaid/