Managing managed care

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Neil Stern, Senior Planning Services
Neil Stern, Senior Planning Services

With our many years of experience as a Medicaid planning and consulting company, we will explore some of the positive attributes the Managed Care Model brings to the table and some of the common changes from the previous FFS process.

Fee For Service:

Under the Medicaid FFS (Fee For Service) model, Medicaid was largely abused by select groups of unethical providers. The common loopholes offered by the FFS model made it harder for federal and state governments to maintain balanced budgeting. This resulted in an unequal balance of service to the care level that consumers received, whether too little or too much of any one service. The outcome resulted in losses of billions of dollars to governments for otherwise avoidable Medicaid claims. Ultimately, the aggregated cost to the governments would cause Medicaid to cease to exist. It was imperative that a system be put in place to ensure that consumers receive adequate care and that providers are compensated fairly.

Managed Care Implementation:

With the implementation of MCO's (Managed Care Organizations) nationwide, it brings a newfound sense of:

  1. Consumer reliability
  2. Service coordination
  3. Provider accountability.

Consumer Reliability:

Millions of consumers nationwide are reliant on the government for healthcare services, such as skilled nursing, assisted living facilities or home care. The general oversight and instability that previously existed through the FFS system, made it hard for the consumer to feel secure that the necessary services would be available to them. The managed care model provides a security blanket that each consumer will be measured and evaluated, ensuring the appropriate care will be provided for the long term.

Service Coordination:

With the FFS system, a consumer would see multiple providers under different networks with limited or no coordination between them. This lack of transparency significantly increased costs. With the onset of MCO's overtaking the healthcare system, there is greater consumer access to the appropriate resources by utilizing their assigned service coordinator within the MCO's. The service coordinator's primary position is to ensure that all providers for any one consumer are working efficiently and in sync improving the recipients overall health.  

Provider Accountability:

With managed care reform, The Centers for Medicare & Medicaid Services implemented financial incentives to providers, encouraging the reduction of hospital admissions, costly institutionalizations for consumers who may otherwise do better in a lower care setting, amongst other quality measures. These incentives allow for the continuing efforts to improve the quality of care provided and the methods in which they are delivered.

Positive results

Consumers who need services not covered by a Medicaid MCO may go to a hospital for treatment. This will generally result in the hospital billing Medicare, thereby alleviating the Medicaid MCO's out of pocket expense. With that, Medicare is actively working on the implementation of a dually-managed program where consumers would have both Medicare and Medicaid services provided under one network. This gives consumers the ability to visit the same providers, regardless of whether they accept traditional Medicare or Medicaid.

In addition, this provides Medicare with the opportunity for stability as it will no longer be expected to pay excessive hospital or skilled nursing facility bills. This concept has recently been implemented in the state of New York under the program called FIDA (Fully-Integrated Dual Advantage) plan. FIDA plans are currently in a demonstration phase until 2017.

Challenges ahead

Since the onset of MCO implementation, many providers have felt constraints with new claims processing systems and additional evaluations necessary prior to providing care.

For example, in New Jersey, once a Medicaid recipient is approved for Medicaid, a letter is mailed to them to choose an MCO of choice. Once enrolled, the provider must reach out to their designated representative at the MCO to issue an initial authorization for long term care, which will cover up to 90 days. During this time frame, a nurse will come down and carry out an assessment that will determine the amount of time the Medicaid recipient can receive care until a new assessment is done. 

Providers must have oversight in order to ensure that authorizations are granted and that current authorization numbers have not expired in order to receive payment for the services rendered. This process necessitates providers to designate an employee that will ensure a smooth process and eliminates the risk of an expired authorization.

Additionally, some providers have complained of drawn-out periods of claims processing, and unclear direction from the MCOs. Lengthy claims processing times have hurt some providers that are reliant on the claims for cash flow reasons.

Although the changes are challenging at times, these processes and the right services allow government assistance programs the opportunity to continuously assist those in need.

Neil Stern is the director of marketing at Senior Planning Services. Follow him @SternNeil.


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