Insurers set sights on growth in Medicare Advantage, Medicaid managed care

Insurers set sights on growth in Medicare Advantage, Medicaid managed care


The push to value-based care can also lead to complications with providers.

In January, the Oklahoma Health Care Authority announced UnitedHealthcare would be one of four private insurers in charge of managing Medicaid benefits for the state’s 903,000 enrollees, starting in October. Under the state’s new managed-care program, named SoonerSelect, Oklahoma’s Medicaid will move from a traditional, fee-for-service model to one in which organizations receive fixed monthly payments for every patient its providers see and treat.

This represents the second time the state has attempted to privatize its Medicaid system.

In 1993, Oklahoma contracted with five managed-care organizations to administer coverage for its lower-income population, intending to stabilize the program’s rising costs and improve care quality. But a decade later, an economic downturn led to reduced state revenue and increased Medicaid enrollment. At the same time, private insurers pressed for higher capitated payments. In 2003, the state health authority decided it could manage the program by itself for a lower cost, ended its contracts with private insurers and switched back to a fee-for-service model. A state-sponsored review of the private Medicaid program found that managed-care organizations helped expand access and lower the cost of care. But it listed several other policy shifts that could have impacted care costs during this time.

Now the state is reversing the decision.

Dr. George Monks, president of the Oklahoma State Medical Association, said that privatizing the state’s Medicaid program will increase costs and decrease access to providers for rural patients. Payment delays in the 1990s caused a record number of health systems to stop accepting Medicaid patients, he said.

Monks, who runs a dermatology practice and does not personally accept Medicaid patients, added that the Oklahoma Health Care Authority’s administrative costs currently run at 5%, while administrative expenses at managed-care companies in other states reach at least 15%. He also takes issue with the fact that regulators moved forward without the Legislature’s approval.

“Commercial managed care really just injects a middleman into the Medicaid program, and it’s going to ultimately cost the state and taxpayers more,” Monks said.

He pointed to a recent Government Accountability Office report that found managed-care organizations in six states inappropriately cut patient services, limited patient access to providers and suffered from quality issues.

Other reports offer a different picture: UnitedHealth Group highlighted an analysis of Kansas’ managed-care efforts, which found that utilization of primary care increased 45%, beneficiaries gained access to $18 million in new services and the state saved $2 billion in the first six years after its managed-care program was implemented. The report was conducted by Medicaid Health Plans of America.

At SSM, Manuel said she is still worried about how the move will impact the hospital’s finances. She said Oklahoma’s health authority told her to expect patient utilization to drop by up to 40% once private insurers begin to manage Medicaid. The change will also impact the hospital’s 340B drug-pricing system and its upper payment limit program.

Uncertainty over the new Medicaid administration and program expansion comes as the hospital continues to deal with COVID-19 and how to manage its Medicare Advantage contracts, Manuel said. As more insurers offer more plans, the number of enrollees in each decreases, Manuel said, diluting the risk pool and making it harder for SSM to achieve the cost savings and patient outcomes needed to make financial sense.

“We’re looking at this managed Medicaid law going into effect rather rapidly, and there’s a lot of things that are kind of just left out there,” Manuel said. “What’s going to happen in between then and now? I feel like the plane’s being built as it’s flying.”



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About the Author

Marie Maynes
Marie Maynes is a Sports enthusiast and writes for the Sports section of ANH.