Experts predict community health insurance providers will lose a substantial amount of funds as the year comes to a close. The Alliance of Community Health Plans expects these insurers to miss out on hundreds of millions in reimbursement resulting from a lack of recent Medicaid rate adjustments.
Rates have remained the same
Reports show that many states used pre-pandemic data to inform their Medicaid rates. According to Nick Felici, Director of Network Development & Analytics at TOG Network Solutions, this led to a significant mismatch since much has changed in the last four years.
Felici states, “Utilization was suppressed during the pandemic and is now rebounding sharply. Therefore, payment rates based on outdated data fail to capture the true cost of care.”
The disenrollment of nearly 25 million subscribers served as another contributing factor, which resulted from the most recent redetermination process. These enrollment changes have led to variations in subscribers’ health needs.
Felici adds, “Our findings reveal a substantial increase in the acuity of Medicaid enrollees remaining in coverage after redeterminations.”
This surge of people in need of care has caused an even greater rise in utilization rates. These occurrences have all placed a greater burden on the health care system, which has still not figured out a way to manage this influx amid provider shortages.
What will happen?
If rates are not adjusted, small health plans funded by Medicaid – many of which are structured as nonprofits – may have difficulty staying afloat. Several states across the nation are expected to feel the effects of this, with data showing vulnerabilities in New Mexico, Virginia, Pennsylvania, Minnesota, and Michigan.
A plan of action is the best step forward
Payers should begin taking steps to prepare for these changes.
- It is expected that some managed Medicaid plans will leave the market as a result of these losses. This may lead to a rise in enrollment for remaining plans, who should expand their provider network to manage the demand of new subscribers.
- Payers should foster existing relationships with providers in their network to ensure member satisfaction. This may mean revisiting the terms of their contracts, offering providers more resources to meet subscriber needs, and improving their own accessibility to address potential member concerns.
- By utilizing care management and similar value-based services, payers can improve their bottom line while meeting their members’ needs.