While Medicaid programs continue to build a stronger safety net, COVID has illuminated significant disparities throughout our health and social support systems. This focus created the current political and social environment that is more supportive of Medicaid programs and that has become more focused on racism, discrimination, and inequality, with new policies and funding that provide an opportunity to more permanently integrate efforts towards health equity. States have a variety of options to close disparity gaps in partnership with their contracted managed care organizations (MCOs), as these insurers direct the provision of health services through a variety of mechanisms, including, for example, provider network composition and reimbursement, utilization management and prior authorizations, and the creation and application of medical necessity criteria.
Many states have begun to evaluate the status of health equity in their programs by requiring the reporting of Medicaid Core Set quality of care performance measures, often collected routinely from plans as part of their quality evaluation, to be separated by race/ethnicity. This effort requires MCOs to accurately complete their enrollee demographic data as related to race/ethnicity, which introduces a series of data collection and completion challenges for the organizations. Fifteen states currently require their MCOs to report health equity-related measures with additional measures and Medicaid programs to come. For example, Oregon is using 2021 baseline data to set performance metrics for improvement of a health equity quality measure by Coordinated Care Organizations in order to receive their full quality pool fund allocation. States have access to resources, such as the State Health and Value Strategies (SHVS) Health Equity Compendium, to support efforts to more intentionally advance health equity in Medicaid.
As states reprocure Medicaid managed care services, the Request-for-Proposal (RFP) process itself is an opportunity to set priorities and outline requirements to close disparities and improve health equity. MCOs can be asked to demonstrate their efforts to specifically target and reduce disparities either by describing their current programs and policies or by explaining how they will use the tools and techniques of managed care to prioritize health equity. States can include specific sections and questions in the RFP, requiring MCOs to provide detailed descriptions of how they will meet related state requirements in their proposals.
State Medicaid MCO contracting is another opportunity for states to require specific actions reflective of health equity. There are a variety of contracting tools available to states, beginning with defining terms such as equity and value, and outlining how performance will be gauged, measured, and utilized, including with financial incentives. States can require benchmarks and improvement targets for screening, chronic disease management, and preventive service provision for specific populations. MCOs can be required to contract with community-based organizations to embed their services into local neighborhoods and enhance the economic conditions of their enrollees. As Medicaid programs explore alternative payment methods, they can include specific incentives to enhance provider networks for disadvantaged groups.
States can also expand their programs to require coverage of and adequate payments for value-added benefits that encourage enrollee engagement while supporting efforts to improve social determinants of health (SDOHs). Such benefits could include providing child car seats, supporting completion of GED, and offering employment opportunities and assistance. Most importantly, states can require MCOs to develop strategies throughout their operations to integrate health equity principles and utilize a health justice framework, including through specific clinical interventions that have been shown to reduce disparities, enhanced efforts to expand and ensure access to services for these populations, and the inclusion of enrollees of color in efforts such as member handbook development.
States can also mandate MCOs to identify and engage enrollees who may be at risk for poor health outcomes but who have not utilized health services. MCOs could, for example, compare enrollment files to claims data, identifying those members with chronic medical conditions who have not received appropriate preventive care services, and work to connect them to appropriate providers. Accountability for these enrollees is often ignored until they present as patients with significantly more severe and expensive conditions. Medicaid and its contracted MCOs have an opportunity to collaborate on systems where services are more proactively offered based on predicted need, identifying patients at highest risk and defining their risk factors even when not currently involved in the healthcare system. This shift will require consideration of a time horizon beyond the state-MCO contract period and outside of health system functions alone including consideration of SDOHs.
Over half of Medicaid managed care recipients are covered by national plans operating in more than one state, allowing for successes in state’s program to be adopted elsewhere. Moreover, many MCOs operate a variety of products, including in the commercial and Medicare Advantage markets, that could be adapted for Medicaid programs.
Case Study: Michigan
One state that has made significant investment and advancement in improving health equity in Medicaid is Michigan. The state made health equity a priority, investing over a ten-year period to incorporate equity efforts across its Department of Health and Human Services agencies, including its Medicaid and its comprehensive managed care program. The state began requiring MCOs to report certain Medicaid Core Set measures by race/ethnicity, and feed these into a health equity report that is updated annually. After investing heavily in improving data collection and quality, the state set goals for these and other quality measures reflective of the program’s priorities, including health equity. As reporting has improved and MCOs have become more adept in responding to these priorities, the state has leveraged the data in its contracts and operations. This includes the use of financial withholds and value-based purchasing (VBP) incentives to be earned based on a variety of quality measures that are set by the state, giving MCOs the opportunity to enhance their payments. While some of the measures are mandated by the state, while others are developed by the MCOs to reflect their own populations, regional variation, and plan structure. Currently there are five quality measures in place related to VBP, two of which are related to shrinking health disparities. Michigan is also using its Medicaid enrollee auto-assignment function to focus MCOs on agency priorities. Assignment algorithms are adjusted quarterly to increase auto-assignment to the better performers on certain quality metrics, including those focused on health equity. The state has further revised certain of its Medicaid managed care contract requirements to promote health equity. Such requirements include the hiring of community health workers as a ratio of enrollees, and the inclusion of opportunities for additional payments, including for such actions as working with locally-embedded agencies and health workers.
The Centers for Medicare and Medicaid Services (CMS) can support state efforts by working with agencies to develop and adapt definitions and performance measures as well as RFP and contract language, sharing best practices from other states, and providing technical and financial resources to specifically improve health equity. The agency can provide opportunities for states to share experiences and efforts by sponsoring forums and other workgroup sessions that allow state agency representatives opportunities to share ideas and ask questions. They can further directly connect state agencies that may need additional assistance with agencies that have successfully implemented changes to improve health equity, allowing for best practices to emerge from the Medicaid programs themselves.
This blog post highlights quotes and learnings from the panel “State Policy Innovation and Research: MCO-Level Interventions” presented at the meeting “Harnessing Medicaid to Improve Health Equity: A Research and Policy Agenda” on Dec. 1 and 2, 2021. This meeting was co-hosted by Julie Donohue of the University of Pittsburgh, Susan Kennedy of AcademyHealth, Genevieve M. Kenney of the Urban Institute, Chima Ndumele of Yale University, and Kosali Simon of Indiana University.