What can your MCO do to prepare for 2018 and beyond?

Medicaid managed care organizations are continually in a balancing act, facing issues like tighter-than-average budgets, 2016’s “Final Rule”, and an evolving, uncertain healthcare landscape. But those are broad, large-topic issues for MCOs. Take a closer look, and there are some issues faced by MCOs that are a little less ambiguous, such as benefits coordination, actuarial soundness, and the potential for historic financing cuts to Medicaid.

Balancing Act Between Coordinating Benefits and Paying Claims to Providers

Left wondering how to balance benefits coordination and timely claims payments to providers? You’re not alone. Managing this careful balance, which must take many factors into consideration, while keeping providers happy, can be tricky. Failures of MCOs in some states have served to  highlight just how precarious this issue can be. As quoted in this article, Mark Rivera, founder of the managed-care consulting firm MCC, says “The backbone of any managed-care program begins with your provider network. Keeping them happy and paying claims on a timely basis is critical.”

MCOs looking for a better, more technologically-driven way to coordinate patient benefits are relying on software platforms to streamline date and improve recoveries. These platforms, such as Pareo, offer Medicaid managed care organizations streamlined payment integrity solutions through a software-as-a-service (SaaS) model.  Additionally, SaaS solutions can help ease some of the administrative burden that providers are tasked with, resulting in better relations overall. Realizing improved recoveries is a fiscally-sound move that a MCO cannot afford to overlook.

Actuarial Soundness (requires a certification  process, on top of ensuring that rates actually cover cost care)

The final Medicaid managed care ruling of 2016 includes a stipulation some MCOs hadn’t previously faced: a minimal medical loss rate (MLR) consideration. “Unlike commercial and Medicare plans, where a minimum MLR has been a federal requirement for several years, Medicaid MCOs were only required to adhere to loss ratio standards if they were imposed at the state level, subject to each state’s discretion. The final rule has instituted a requirement that certified rates must target an MLR of at least 85%,” write the authors of this study by Milliman.

The many factors used to compute a MLR makes this issue especially complex for MCOs. Medicaid itself faces the precarious line of paying provider’s rates that are high enough (the failure to do so brings its own set of adverse reactions) while not wasting taxpayer money, a balancing act that can leave MCOs caught in the middle.

Rates used to be offered in ranges, but with the final rule, that is no longer the case. Terms dictate that in place of rate ranges, each paid rate has to be certified as actuarially sound. This certification requires detailed documentation, essentially defined as improved transparency into the managed care organization capitation under Medicaid.

Let’s consider the way that data insights could prove beneficial to MCOs in this process. It is understood that specific data is required in order to certify a rate as actuarially sound. Visibility into the plan’s payment data, as well as access to analytics and advanced predictive modelling, can assist MCOs in managing needed data for new regulations.

Future Legislation RE: Afforable Care Act and Medicaid

There have been no shortage of questions surrounding the future of the ACA, and for MCOs – the future of funding for Medicaid. And while repeals of the ACA, including changes to Medicaid, were unsuccessful in 2017, experts predict that efforts to dismantle the Affordable Care Act will continue in 2018.

The Federal Government is proposing historic restructuring to Medicaid’s financing models, which will affect underserved populations like never before. John Baackes, C.E.O. at L.A. Care Health Plan, points out that “For the first time in Medicaid’s history, the federal government is proposing to cap its share of payments to states…for children, mothers, the developmentally disabled, and elderly in nursing homes—all of which have limited incomes and have been eligible since the program began in 1965.”

Despite these concerns, many Medicaid managed care organizations are still seeing growth. The use of MCOs increased in Medicaid expansion states last year. “There’s a lot of uncertainty for the longer run, but for 2018 we had to move forward with the facts we have,”says Donna Zimmerman, senior vice president, government and community relations for HealthPartners. Ensuring that a managed care organization has good data and strong payment integrity will help make any financial cuts more navigable for MCOs.

It’s Time to Innovate

So how can your Medicaid managed care organization prepare for 2018 and beyond? Think progressively. Health plans have achieved success and improved returns by utilizing payment integrity platforms like Pareo. Coordinating patient benefits, ensuring proper payment, utilizing data and capturing predictive modeling are some of the key ways that your MCO can advantageously plan for the future.



Talk to ClarisHealth about how Pareo® comprehensive payment integrity technology is helping health plans deliver on their most advanced digital strategies.