How is Georgia managing Medicaid managed care?

How is Georgia managing Medicaid managed care?

September 19, 2021 Off By administrator

Just before Frank Berry left his job as head of Georgia’s Medicaid agency this summer, he said the state “will be looking for the best bang for the buck” in its upcoming contract with private insurers to cover the state’s most vulnerable.

This story also appeared in Georgia Health News

But whether the state — and Medicaid patients — are getting an optimal deal on Medicaid is up for debate.

Georgia pays three insurance companies — CareSource, Peach State Health Plan and Amerigroup — over $4 billion in total each year to run the federal-state health insurance program for low-income residents and people with disabilities. As a group, the state’s insurers averaged $189 million per year in combined profits in 2019 and 2020, according to insurer filings recorded by the National Association of Insurance Commissioners (NAIC). Yet Georgia lacks some of the financial guardrails used by other states.

“Relative to other states, Georgia’s Medicaid market is an attractive business proposition for managed-care companies,” said Andy Schneider, a research professor at Georgetown University’s Center for Children and Families.

Georgia is among more than 40 states that have turned to managed-care companies to control Medicaid costs. These contracts are typically among the biggest in these states, with billions of government dollars going to insurance companies. Insurers assume the financial risk and administrative burden of providing services to members in exchange for a set monthly fee paid for each member.

The health plans, though, have at times drawn questions both on spending and quality of care delivered to Medicaid members.

“The transition to managed care was supposed to save states money, but it’s not clear that it did,” said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation. (KHN receives funding support from the foundation.)

States can require Medicaid insurers to pay back money if they don’t hit a specified patient-spending threshold. That threshold is typically 85% of the amount paid to the insurance companies, with the rest going to administration and profit.

But Georgia does not require its Medicaid insurers to hit a specific target for spending on patient care, a federal inspector general report noted. Though Georgia is trying to “claw back” $500 million paid to its Medicaid insurers, it could have lost out on recoupment dollars, the report indicated.

And state documents show that the Peach State company, which now has the largest Medicaid enrollment of the three insurers, failed to reach the 85% mark from 2018 to 2020.

Overall, Georgia’s Medicaid “medical loss ratio,” which assesses how much was spent on patients’ claims and expenses, was fifth from the bottom nationwide last year, behind only Mississippi; Washington, D.C.; Wisconsin; and Arkansas, according to data from the insurance commissioners…

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