A modern method for managing Medicaid

Medicaid provides much-needed healthcare coverage to over 70 million people, almost half of whom are children, and spending accounts for $1 out of every $6 healthcare dollars spent, totaling $728 billion in federal fiscal year 2021.1,2 With each state establishing its own Medicaid benefit plans, they need methods to effectively manage this expansive and vital program. To do this, 41 states, including Washington D.C., utilized capitated managed care, and half of those used some form of alternative payment models.3 But how do states set appropriate capitation rates and performance standards?

Today, most states conduct audits, performance calculations and make other plan adjustments on a calendar year interval, which requires waiting 90 days after the close of the year to run the reports. This means states wouldn’t have final results until June of the following year. 

Efficient and timely insights

Real-world data (RWD) can provide timely insights that allow states to manage Medicaid plans more effectively. This includes actual Medicaid claims, as well as Medicare and commercial claims for those with additional coverage, and other sources, such as electronic medical records (EMR) for visibility into diagnoses that may not be covered. Access to this near real-time insight can help states manage their plans in a number of ways:

  • Monitoring trends and determining coverage - Using RWD, states can monitor the health and wellbeing of the populations they serve and decide if it would be beneficial to offer benefits that aren’t required by federal regulations, such as mental health services, and make other necessary benefit coverage decisions.

  • Providing interventions - RWD can help states detect if certain chronic conditions aren’t being properly managed and determine if changes need to be made to improve care.

  • Detecting and preventing fraud, waste and abuse - It is estimated that fraud, waste and abuse (FWA) accounts for as much as 10% of all healthcare expenditures and that includes Medicaid FWA.4 RWD can help states identify potential FWA and take appropriate action.

  • Securing adequate provider networks - With RWD, state Medicaid agencies can see what providers are in which areas, the populations they’re serving and the conditions they’re treating, allowing state agencies to conduct outreach and recruiting to ensure provider networks meet the needs of their Medicaid population.

  • Setting appropriate capitation rates - As mentioned, the majority of states utilize capitation managed care to govern their Medicaid plans. With RWD, state agencies can see actual healthcare utilization and costs to determine appropriate capitation rates.

  • Establishing applicable performance standards and metrics - Similarly, many states use alternative payment models (APMs) to manage costs while incentivizing quality. RWD can help states establish appropriate APMs and track actual outcomes to measure quality.  

Real insights using real-world data

Clearly, there are enormous benefits to leveraging RWD to effectively manage Medicaid plans; however, there are also many considerations when utilizing this innovative approach:

  • Ensuring patient privacy and HIPAA compliance
  • Making data interoperable with multiple sources, including your agency’s data
  • Accurately matching patient records across data sources
  • Discovering and licensing appropriate data sources that represents the population you serve

Privacy-Preserving Record Linkage (PPRL) provides the technology to de-identify and match patient records across data sources in a HIPAA-compliant manner, but not all solutions are created equal. The HealthVerity PPRL solution, Identity Manager, has been granted Federal Risk Authorization Management Program (FedRAMP) authorization for its high-security standards, which aligns to state-related security requirements. Our cutting-edge approach resolves each individual to a unique but persistent HealthVerity ID (HVID) that is matched to a continuously updated referential database of over 200 billion healthcare and consumer transactions, leveraging machine learning techniques and probabilistic matching to overcome the inherent noise in RWD (typos, errors, missing fields, etc.) to accurately synchronize patients over time and across data sources with 10x more accuracy than legacy solutions.

This synchronized approach has enabled HealthVerity to create the nation’s largest fully interoperable and HIPAA-compliant healthcare and consumer data ecosystem, allowing state Medicaid agencies to easily discover and license data representing the patients they serve and to more effectively manage their Medicaid plans.

Click here to discover the real-world data you need to more effectively manage your Medicaid plan. 

 1MACPAC. Medicaid 101. https://www.macpac.gov/medicaid-101/.

2Williams, E.; Rudowitz, R. and Burns, A. (2023). Medicaid Financing: The Basics. KFF. April 12, 2023. https://www.kff.org/medicaid/issue-brief/medicaid-financing-the-basics/.

3Hinton, E. and Raphael, J. (2023). 10 Things to Know About Medicaid Managed Care. March 1, 2023. https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-managed-care/.

4U.S. Department of Justice. Criminal Resource Manual. 976. Health Care Fraud-Generally.

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