Medical Billing Services

What provider should know about transition to Medicaid Managed Care?

Managed Care plays important role in the delivery of healthcare and it is used to describe a health insurance plan or health care system that coordinates the provision, quality, and cost of care for its enrolled members. Traditionally States have utilized a fee-for-service (FFS) payment system to cover enrollees but now states are also making the transition to Medicaid managed care’s prospective payment model as a superior cost-saving alternative to traditional fee-for-service Medicaid.

It is observed that from 1990 there is a gradual increase in the share of Medicaid enrollees covered by the managed care model. According to a research study, it is observed that nationwide 69% of Medicaid beneficiaries enrolled in comprehensive Medicaid managed care plans.

Let’s understand the major categories services provided by Medicaid managed care plans:

Medicaid Managed Care Plans

Today many states design and administer their own Medicaid programs within federal rules and states will decide deliver and pay for care for Medicaid beneficiaries. Mostly all states have some form of managed care which includes comprehensive risk-based managed care and/or primary care case management (PCCM) programs.

The five major categories in Medicaid Managed Care plans and what each plan include is given below:


Enroll Engagement and Service
  • Outreach and engagement
  • Benefits information
  • Health education
  • Appeals and grievances


Provider Access and Availability
  • Work development and contracting
  • Provider service and education
  • Claims processing
  • Value-based arrangements


Care Management
  • Assessment and care planning
  • Longitudinal and transitions care management
  • Utilization management and medical review


Financial Management and Reporting
  • Value-based payment arrangements
  • Service utilization and cost, other financial information
  • Fraud, waste, and abuse detection, monitoring, and reporting


Quality Improvement
  • Quality metrics data collection and analysis
  • Quality improvement projects to improve performance

After knowing about plans, let’s understand about reimbursement in detail.

Medicaid Managed Care Reimbursement

While making reimbursement managed care, states are signed contracts with managed care organizations (MCOs). This contract includes coverage for specific services to enrolled Medicaid beneficiaries and for covering those services, MCOs are paid a set monthly capitation payment.

Now, Managed care organizations negotiate with providers to provide services to their enrollees, either on a fee-for-service (FFS) basis or through arrangements under which they pay providers a fixed periodic amount to provide services.

Current MCO capitation rates may have been developed and implemented prior to the onset of the COVID-19 pandemic and hence in response to COVID-19, CMS has asked states to rework managed care contracts as well as rates, including adjusting capitation rcoviates, risk mitigation strategies, covering COVID-19 costs on a non-risk basis, etc.

COVID-19’s Impact on Medicaid Managed Care

More than 27 million Americans have lost their health insurance coverage following a job loss during the COVID-19 crisis and to protect themselves as well as their family they are turning to Medicaid.

States have started to recognize the value of Medicaid managed care plans to provide quality care and help control costs. These factors are important as budgets face the strain of COVID-19. Moreover, these plans have secured and distributed personal protection equipment to local hospitals and health care providers and partnered with public and county health systems to administer COVID-19 tests.

Finally, we can say that managed care arrangements facilitate and monitor access to needed care, measure and strengthen the quality, and deliver cost-effective care hence the transition to Medicaid Managed Care is recognized.


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