Experts Outline Medicaid Challenges, Potential Reforms

As Medicaid is a federated program between states and the federal government, it has historically been difficult for innovation to spread state to state, hindering any comparison of quality metrics.

A 2021 AcademyHealth National Health Policy Conference panel, led by Rebekah Gee, MD, MPH, a practicing gynecologist and Gratis Faculty at the Louisiana State University School of Medicine, focused on current Medicaid challenges and looked ahead to the future of the 50 year-old program proposing potential reforms.

“Medicaid is now the largest single payer of health care in this nation. Seventy-five million Americans are on Medicaid post-Affordable Care Act (ACA), and [after] the shift in income and loss of work due to the pandemic,” Gee said. Although $600 billion is spent on the program annually in the fight to improve health for the nation’s most vulnerable populations, “We’re now at a cross-road” and the program is in need of substantial change, she said.

Contributing to the discussion were John McCarthy, MPA, founding partner at Speire Health Care Strategies; Iyah Romm, CEO and co-founder of Cityblock Health; Sean Cavanaugh, MPH, chief commercial officer and chief policy officer at Aledade; and Jocelyn Guyer, director at Manatt, Phelps & Phillips, LLP.

As Medicaid is a federated program between states and the federal government, it has historically been difficult for innovation to spread state to state, hindering the comparison of quality metrics. Gee, who previously served as secretary of Louisiana’s Department of Health, put forward the following changes to improve Medicaid’s efficacy and efficiency:

  • Implement a program with consistent minimum standards for what services and supports individuals with Medicaid are getting, including customer service
  • Increase investments in operational capabilities such as contracts and actuarial services through the support of the federal government
  • Shift social and medical dollars to work together to improve health among low-income populations with a focus on factors like housing and food security

Because Medicaid is tied to income, it often does not offer stable coverage for the individuals it serves, as this population has greater income instability than those in the private marketplace. In contrast, “the administrative hassles of staying on Medicare are nonexistent,” Cavanaugh explained.

Although value-based care has shown some success in Medicare populations, structural changes in Medicaid will need to take place in order see the same kind of benefits, Cavanaugh said. “Providers are not going to make long term investments in wellness and prevention if that beneficiary is going to be off their roll that they're responsible for 6 to 9 months. It just doesn't make sense.”

To solve this, any reform that stabilizes coverage for a longer period of time and allows for the provider-patient relationship to be a lasting one, both financially and clinically, is a pre-requisite to true value-based care, he said.

But short-term strategies, including the current administration granting permission to states to implement continuous coverage, could be available for certain populations, Guyer pointed out. “There is increasingly a big push among forward thinking state leaders about going in and working with the administration to allow at least a year continuous coverage,” she noted, while an innovative labor initiative could help boost this measure among young children. Continuity of coverage for pregnant women, specifically for a specified post-delivery period could also be a fitting area for short-term progress.

When it comes to aligning public programs to address social determinants of health among Medicaid populations, reporting requirements, technology, infrastructure and testing line payment models need to be harmonized between state, federal and local programs, Gee said.

Citing successful efforts made in North Carolina, Guyer explained how the state initiated a pilot approach using Medicaid to fund some housing support, food support and other services in targeted populations. The state “is now at the point where they figured out a fee schedule…They have dug in on the data infrastructure that's needed to support this kind of exchange of information across those providers. They worked with an outside contractor and set up a statewide resource database that allows healthcare providers and others to identify social supports for people.”

However, even if Medicaid spending is used for these purposes, health care providers should not always control how and when those dollars are used for social interventions, Guyer noted.

In addition to successes seen in North Carolina, McCarthy highlighted investments in similar programs taking place in Arizona and Ohio, underscoring how the effort is being carried out on a state-by-state basis. But determining the number of years managed care companies ought to contract in these states remains a challenge, while contract-specific details can vary based on each area.

At the federal level, Romm noted the importance of thinking about the issue with a perspective focused on outcomes, or in other words, understanding how money follows the person. “Thinking about state-based innovation opportunities… about dollars around specifically congregate housing, around serious mental illness, around spaces where we know that the intersection point of health care and social dollars are very clear,” will be key, Romm explained.

In addition, reformers ought to bear in mind both race-based and social determinants-based risk adjustment models “that start to understand the burdens of poverty, the burdens of poor diagnosis, and how they reflect in under capture of information about who our members, our patients are.” According to Romm, the answer also constitutes implementation of value-based care. “Creating the right ecosystem for full risk, value-based care and Medicaid, will force us to start to ask the right questions about social care,” he said, adding, “I worry that if we simply barrel down the pathway of saying social care integration at a federal level is the answer, that we're going to blow past asking the foundational question of ‘Why?’ and what it is that we're seeking to achieve.”

Alongside unstable Medicaid coverage periods, turnover within the workforce remains a barrier due in part to political attacks and underpayment when compared to private sectors. Payment reform for Medicaid directors and their top staff may result in better retainment.

Furthermore, how the program is situated in each state, under the governor and legislature’s jurisdiction, can compromise the program’s efficacy, McCarthy noted. Medicaid is often the largest insurer in states, meaning the job of Medicaid director is complex, and will only be more so should these social health initiatives fall under the program, McCarthy stressed.

Borrowing from successes seen in the Medicare model, Cavanaugh suggested longer-term Center for Medicare and Medicaid Intervention (CMMI) investments. In addition, figuring out where long-term capacity building investments should be allocated could help to determine which models are successful. “One of the things that I would challenge us all to do is figure out which states have solved major pieces of this challenge and start to scale those things the right way,” Romm said. “But the hardest thing that we do at Cityblock is build and train focused care, it is the hardest part of scaling these organizations.”

In spite of a generally broad acceptance to take care of the nation’s children and pregnant women, the notion of the “underserving poor” has contributed to some push back against Medicaid reform, Gee noted.

“There is a diversion between the general public’s sense of Medicaid, to the extent they understand it, and where some of the policy makers are,” Guyer said, adding voters in Missouri and Oklahoma overwhelmingly supported Medicaid expansion. “To me the question really is about the policy elites who are in some respects, I think, trying to use Medicaid as something of a wedge issue and trying to create that sense of these are some unworthy individuals and we need to take a punitive approach.”

Compounding the issue are public notions the program only impacts people of color in the United States. Personal stories and hard data on improved outcomes from Medicaid expansion can help overcome these misconceptions and drive positive change, the experts said.