While updating Medicaid managed care, don’t overlook network adequacy

August 8, 2016 Pam Kennedy

Medicaid enrollment has grown substantially in recent years, fueled by policy changes from the Affordable Care Act and mixed economic conditions. At the same time, states are turning to managed care as the preferred care delivery system in an effort to reduce costs and improve the quality of care. Where traditional fee-for-service systems reimburse providers directly for services billed, managed care plans are paid a flat fee to provide health services for a defined population set. The plans are also evaluated on how well they improve the health outcomes of the people they serve.

“Data analysis and predictive modeling can improve network adequacy.” – Pam Kennedy, Vice President of Analytics for Government Healthcare Solutions 

Against this backdrop, the federal government recently updated the regulations governing Medicaid managed care for the first time in over a decade. States are reviewing the operations of Managed Care Organizations (MCOs) for changes such as coverage, access, quality, efficiency, and value. But as they work to align healthcare programs with updated regulations, they shouldn’t overlook a seemingly simple factor: network adequacy and provider access.

‘Network adequacy’ impacts health outcomes

Network adequacy refers to a health plan’s ability to provide beneficiaries with appropriate care at the right time, within a reasonable travel distance and time, in a language that is understood by the consumer and with necessary support for people with disabilities. When a program cannot provide an adequate network of services to its members, it limits the assistance available and negatively affects their health outcomes.

All states have developed strategies to assess how well MCOs comply with access standards. They generally include reviews of reports submitted by MCOs and external quality reviews. While these methods are helpful, they are not as strong as direct methods, such as making calls to providers to verify that they are accepting Medicaid patients, practicing at the location reported by the MCO and are still working with the reporting MCO.

Keep tabs on managed care organizations’ performance

These tests are important because states rely heavily on provider information reported by MCOs. If the information is inaccurate or out of date, it can affect the health of Medicaid recipients. The problem is already fairly widespread. In a series of reports released in 2014, the Department of Health and Human Services, Office of Inspector General (OIG) found that while most states did not identify any shortcomings using traditional MCO reporting. For instance:

  • More than half of the providers that it sampled could not offer appointments to Medicaid enrollees.
  • 35 percent of the providers could not be found at the location listed by the MCO.
  • 8 percent of providers were at the location but were no longer participating in the plan.
  • An additional 8 percent were not accepting new patients.1,2

States are less likely to perform direct monitoring of MCOs due to the labor-intensive and specialized nature of the work. But as Medicaid managed care continues to grow, so will the issues with network adequacy and connecting Medicaid members with services they need.

Xerox focuses on improvement

To ensure continued, uncomplicated access to healthcare, healthcare programs should consider partners with outreach and contact center experience as they already have dedicated resources that can ramp up quickly to the task. For example, Xerox responds to 30 million Medicaid calls annually. We help people enroll in Medicaid and other human services programs and assist them in connecting with the programs that best suit their needs. We also assist service providers with questions on payments, claims and processing status.

There are also ways of improving network adequacy through data analysis and predictive modeling. Our Xerox® HealthClarity Solution contains network adequacy models that examine utilization patterns in healthcare claims as well as environmental data such as social determinants of health. This process uncovers potential vulnerabilities in provider networks and helps programs focus their improvement efforts. HealthClarity can:

  • Assess the effectiveness of services, present findings in easy-to-understand formats.
  • Quickly adapt program requirements through a configurable rules engine.
  • Identify statistically significant differences in provider performance.
  • Highlight opportunities to increase value and improve outcomes.

The transition to managed care is accelerating as more states include more services, such as behavioral health and long-term care, in integrated care models. States must invest in the tools and resources required to make this cost-effective and medically more efficient. These tools should also help states meet rules from the Centers for Medicare and Medicaid Services (CMS) regarding network adequacy and provider access.

1U.S Department of Health and Human Services, Office of Inspector General. (2014, September). State Standards for Access to Care in Medicaid Managed Care. (Publication No. OEI-02-11-00320). Retrieval from OIG Reports & Publications database: http://oig.hhs.gov/

2U.S Department of Health and Human Services, Office of Inspector General. (2014, December). Access to Care: Provider Availability in Medicaid Managed Care. (Publication No. OEI-02-13-00670). Retrieval from OIG Reports & Publications database: http://oig.hhs.gov/

About the Author

Pam Kennedy

Vice President of Analytics for Government Healthcare Solutions

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