Abstract
This issue brief considers the feasibility of realizing substantial Medicaid cost savings through strategies aimed at improving delivery system and administrative efficiency. We review the literature about the potential for Medicaid cost savings from four strategies related to acute care services: (1) premiums, cost-sharing, and enrollee wellness incentives, (2) complex care management, (3) patient-centered medical homes, and (4) alternative payment models, and another four strategies related to long-term services and supports: (5) tightening financial eligibility rules for long-term care services, (6) promoting private long-term care insurance, (7) expanding home and community-based services (HCBS), and (8) increasing use of managed long-term services and supports. We conclude that, while there may be other reasons to pursue these policies, such as improved health outcomes or increased enrollee satisfaction, the literature does not provide strong evidence for achieving large Medicaid savings through adoption of these policies.
Insights Results
Overview of article/programs
Issue brief considers the feasibility of realizing substantial Medicaid cost savings through strategies aimed at improving delivery system and administrative efficiency. It also reviews literature about the potential for Medicaid cost savings from 4 strategies related to acute care services: 1) Premiums, cost-sharing, and enrollee wellness incentives; 2) Complex care management; 3) Patient-centered medical homes, and 4) Alternative payment models, and another 4 strategies related to long-term services and supports: tightening financial eligibility rules for long-term care services, promoting private long-term care insurance, expanding home and community-based services (HCBS), and increasing use of managed long-term services and supports
Primary focus areas of approved state Section 1115 waivers include: 1) Implementation of alternative Affordable Care Act Medicaid expansion models; 2) Eligibility and enrollment restrictions; 3) Work requirements; 4) Benefit restrictions, copays, and healthy behaviors; 5) Delivery system reform initiatives, especially efforts that tie provider incentive payments to performance goals; 6) Integrating physical and behavioral health or providing enhanced behavioral health services to targeted populations; 7) Authorizing the delivery of long-term Medicaid services and support through capitated managed care; and 8) Responding to public health emergencies and providing coverage for other targeted groups
Examples of Medicaid models pursuing delivery improvement include:
New York State, through a DSRIP partner, is implementing Unite US, a software supporting care coordination and collection of social determinants of health outcomes data among the partners in their 5 community-wide population health networks. This software is a part of a larger effort to increase collaboration and interoperability between clinical and social service partners in community across the state to address patients’ social determinants of health and reduce avoidable hospital use by 25% over 5 years
Texas, like New York State, is supporting enhanced care coordination by requiring hospitals to provide emergency department admission, discharge and transfer (DAT) data
Key takeaways/implications
There are opportunities for states to leverage health information and technology through Medicaid waivers. In particular, Delivery System Reform Incentive Payment (DSRIP) programs are an existing vehicle that support states seeking to demonstrate cutting-edge delivery system reform programs at the community level with an emphasis on facilitating value-based care delivery. Proposed DSRIP reforms typically include the following objectives: 1) Improve access to high-quality, person-centered services that produce positive health outcomes for individuals; 2) Promote efficiencies that ensure Medicaid’s sustainability for beneficiaries over the long term; 3) Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence and improved quality of life among individuals; 4) Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making; 5) Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and 6) Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid
In April 2018, CMS outlined 2 paths for state Medicaid directors to achieve reuse (i.e., using existing technological structure for different purpose) of Medicaid technologies and systems: 1) Adapt existing capabilities within the state, capabilities in use by another state, or those available from the vendor
Specific ways to facilitate reuse in new development include: 1) Hosting software in a cloud and making it available for other states to use; 2) Developing open-source, license-free Medicaid Enterprise System modules that are sharable with other states; 3) Sharing specific customizations or configurations to a commercial off-the-shelf (COTS) software product with other states; and 4) Further developing software or systems created for the Health Information Technology for Economic and Clinical Health (HITECH) Act to support other business processes in or connected to the Medicaid Enterprise
