To Serve or Save? How About Both?

Last week Appleseed testified on a major shift in Nebraska’s Medicaid program. The state is moving to a “full-risk” managed care program in ten counties contiguous to Omaha and Lincoln on August 1. For over a year Appleseed has been expressing serious reservations about this change. (You can read our testimony here) The fundamental orientation of full-risk managed care is the bottom line, not on the care of the client and yet ironically, this may not be the most cost-effective way to run a Medicaid program. While many states have moved to managed care in their Medicaid programs, the states showing the greatest success and savings have abandoned full-risk managed care in favor of managed care focused on care coordination, especially chronic care management. These states have found that working with providers and Medicaid patients on preventative care and disease management not only saves them millions of dollars, but ensures that Medicaid meets its mission of providing necessary health care to its clients.

In contrast, full-risk managed care, even if it includes some care coordination, still manages to be about profit and savings rather than the patient. Under this new system Medicaid recipients will choose between two Managed Care Organizations (Coventry and United Healthcare) as their health plan provider. With full-risk managed care, the state pays the Managed Care Organizations (MCO) a certain amount per Medicaid recipient enrolled with the MCO each month. As the name indicates, this model shifts the risks (and the benefits) of the costs of care to the MCO. So, if a Medicaid recipient needs a great deal of unexpected care, the MCO rather than the state bears the burden of paying for that care, even if the cost exceeds the monthly fee the MCO received for that patient from the state. Conversely, if a Medicaid client remains healthy and does not have health care costs equal to the monthly fee the MCO receives for that client, the MCO pockets the profits.

In addition to being concerned that full risk managed care is not patient centered or cost-efficient program, Appleseed has some specific concerns about how it is being implemented, specifically the lack of accountability for both the managed care organizations and the Department of Health and Humans Services. (Again, find our testimony here)

As other states have shown, saving money while serving Medicaid clients is possible. There is a way to manage the care in Medicaid to minimize the unanticipated costs to the state, create taxpayer savings that actually redound to the taxpayer not an insurance company, and serve Medicaid patients well. Appleseed will continue to work to move our Medicaid system in a direction that works for all Nebraskans.

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