State Medicaid program unlikely to grant raise to providers anytime soon

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Big changes to Medicaid payments to providers and managed care plans are unlikely this year as state budgets recover, Medicaid rolls shrink, and the US economy sheds its pandemic woes.

Medicaid has increased dramatically during the pandemic, reaching 80 million registrants last month. The loss of jobs and income last year drove enrollments, which remain high as federal relief funding depended on states not waiving Medicaid beneficiaries during the public health emergency.

“The states are in a better position than I think many anticipated at the start of it all,” said Rachel Garfield, co-director of the Kaiser Family Foundation’s program on Medicaid and the Uninsured.

State budgets did not suffer as much as many predicted when the COVID-19 pandemic hit the United States Massive injections of federal dollars, sustained consumer spending and a strong stock market that resulted in High collections of capital gains taxes in many states have offset the fiscal challenges presented by the pandemic.

Tax revenues for the 15 most populous states were virtually unchanged during the 2020 pandemic from the previous year, although some states experienced declines, Manatt Health found. States that rely heavily on income tax, including California and New York, have seen collections rebound faster than states that depend on sales taxes and other levies, such as Florida and Texas. Arizona, Ohio, and other states that tax online shopping – which exploded while consumers were stuck inside – seem to have done better than states that haven’t.

This could convince healthcare providers in fiscally sound states to push for Medicaid salary increases, especially after many of them have battled throughout the pandemic, said Anthony Fiori, consultant at Manatt Health. In addition, states have access to enhanced federal funding for Medicaid until at least the end of the year, he said.

The near future of the economy and state budgets is difficult to predict, creating uncertainty for Medicaid programs. Enrollments could increase in some states if job growth for the poorest people is lower than that of the rest of the workforce, for example.

“It won’t be an immediate return to previous enrollment and spending habits,” Garfield said.

States will have to dwell on a huge backlog of paperwork to determine who is still eligible for the program after the end of the public health emergency. That means it will take at least a year for Medicaid enrollments to decline significantly, said Mari Cantwell, director of the consultancy firm Sellers Dorsey and former director of Medi-Cal, the Medicaid program in California.

The process could take even longer in states where the pandemic has hit their economies the most and in states that have seen the largest increase in Medicaid enrollments. States with outdated enrollment systems that require more hands-on work from state employees could also take some time to determine who is still eligible for the program, Cantwell said.

These delays could save policymakers the much-needed time to figure out what to do about the millions of beneficiaries who may no longer be insured or to seek another form of cover, such as subsidized policies from the government. a health insurance scholarship.

“It’s going to be disruptive if you snap your fingers and 15 million people go from covered by Medicaid to uninsured,” said Matt Salo, executive director of the National Association of Medicaid Directors.

Growing political pressure could force states to keep more people on their Medicaid lists as coverage losses loom, even after enhanced federal funding wears off.

Most states are likely to take a conservative approach to provider rate changes, as it’s unclear whether cost savings from declining Medicaid enrollments will offset declining Medicaid funding after the money disappears. federal supplement, Cantwell said.

States like California that temporarily increased supplier prices during the pandemic will likely allow those increases, along with solvency payments to safety net providers, to expire. But it might take a while for providers to see budget-related reimbursement cuts reversed.

Likewise, many states have expressed concern about overpayment of Medicaid-managed care plans for coverage that registrants used less during the pandemic when demand for medical services plummeted. They may not be inclined to do anything in the short term, Salo said.

“The optics are uncomfortable for everyone when we’re in the middle of a pandemic – and it looks like the plans are looking like bandits,” Salo said. “But if you’ve just signed contracts, it’s hard to go willy-nilly and say, ‘Guess what? We’re going to pay less.'”

Several states have established safeguards to prove significant overpayments and underpayments to Medicaid-managed care organizations. This is expected to continue as states learn more about how Medicaid beneficiaries use their coverage in a post-pandemic environment. People enrolled in Medicaid who enrolled during the pandemic are generally healthier and use fewer health services than the traditional Medicaid population, which includes seniors living in nursing homes, people with disabilities, and those who are medically fragile. On the other hand, greater use of telehealth services could lead to increased spending in this area.

Medicaid-managed care plans may also face high expenses due to pent-up demand among policyholders who delayed medical treatment during the pandemic. Some of these people will seek elective surgeries, chronic disease care and other services, which will increase the costs of managed care plans.

“There’s a pretty good argument that even though it looks like we’re overpaying the plans now, they’re going to have to take every dollar we’ve overpaid them and put it back into the outbreak,” Salo said.

Federal requirements restrict states’ power to change Managed Care Organization (MCO) payments for Medicaid, which in part separates state decisions about it from their overall fiscal terms.

“If the state budget increases or decreases, the state may be able to cover more services or populations. But the rates they pay to OLS must be actuarial,” said Craig Kennedy, CEO of Medicaid Health Plans of America CEO. Still, states could struggle to determine whether their OLS rates are actuarial, given that no one is clear on what use will look like after the pandemic is over.

“It can be as much an art as a science,” said Salo.


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