Medicaid Churn Poses Multiple Challenges for Health Plans
Reprinted with AIS Health permission from April 29, 2019, issue of Health Plan Weekly
Newly implemented state paperwork requirements caused around 1.6 million Medicaid beneficiaries to lose coverage in 2018, the advocacy group Families USA says, and Medicaid managed care stakeholders say that this additional churn in Medicaid enrollment poses challenges for plans that can drive up costs and make ensuring continuity of care more difficult. But one expert counters that redeterminations are necessary to prevent fraud.
The cycling on and off of beneficiaries is “enormously disruptive for plans,” says Eliot Fishman, senior director of health policy at Families USA. “Medicaid managed care plans put significant resources into care management and building clinical relationships with beneficiaries, especially those with high risk or chronic conditions. All of that work is thrown into disarray when their members are thrown off of coverage by eligibility paperwork.”
Three States See Most Churn
State policy decisions to engage in more frequent eligibility redeterminations are responsible for a large part of the enrollment drops, particularly in three states: Tennessee, Arkansas and Missouri, according to the Families USA report, “The Return of Churn.”
Those three states, and potentially others, are not always following federal rules aimed at making eligibility redeterminations easier for beneficiaries, the report says. “As a result, beneficiaries struggle to navigate their renewal processes and lose their Medicaid eligibility even though they may qualify.”
The drops in enrollment varied widely between states, indicating that the declines were driven by policy choices at the state level, according to Families USA.
In 2018, Medicaid and CHIP enrollment fell by 9.7% in Tennessee, by 7.3% in Arkansas and by 7.2% in Missouri, Families USA found. Those drops can’t be explained by employment statistics, the group said. Nationwide, 744,000 children were unenrolled, according to the study. Medicaid work requirements, which have only been implemented so far in Arkansas, were a major factor in coverage losses there in 2018, but were not the only factor, the group says.
Federal law and regulations require state Medicaid agencies to renew beneficiaries’ eligibility determinations every 12 months. However, Families USA says some states make this process much more difficult than others, with barriers including significant paperwork requirements and a lack of online enrollment options.
Churn Adds to Plans’ Burden
“A health plan’s onboarding process for a new member involves considerable paperwork, ranging from sending out provider directories and ID cards to connecting a member to a primary care physician,” says Meg Murray, Association for Community Affiliated Plans CEO. “This involves significant administrative and overhead costs that would be avoided were a member to be continuously enrolled.”
Increased churn may also result in reduced revenue streams for Medicaid plans where beneficiaries are being dropped from the rolls in large numbers, says Gerard (Jerry) Vitti, founder and CEO of Healthcare Financial, Inc., a company that connects low-income, elderly and disabled populations with public benefit programs.
Most importantly, continuity of care is disrupted, Vitti tells AIS Health. “The most vulnerable members are those who are the least able to comply with these onerous roadblocks they are teeing up,” he says. And if these beneficiaries lose coverage, they ultimately may cost the system more money because they may end up with a hospital stay or emergency room visit that might have been prevented, Vitti says.
Murray adds: “Churn also interferes with Medicaid health plans’ efforts to measure quality. Most quality measures require continuous enrollment during a calendar year. Members who churn are generally excluded from quality metric data collection.” Churn also decreases the effectiveness of plans’ “investments in activities to address social determinants of health.”
CMS Spent $1.2B on Ineligible Enrollees
Still, Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors, a strategic advisory consultancy that works across government health care business domains, notes that enrollment of ineligible people also is a significant problem in Medicaid, and the redetermination procedures are designed to address that.
Recent audits of three states by the HHS Office of Inspector General estimated that more than $1.2 billion in federal Medicaid payments had been made on behalf of beneficiaries who either may not have been eligible, or who definitely were not eligible.
“At the end of the day, Medicaid has always paid a significant amount of money for people who are ineligible,” Shekhdar tells AIS Health. “Governments and states have a fiscal responsibility to make sure money is being used appropriately.”
Meanwhile, Murray says some Medicaid plans are working to educate members about redetermination requirements and dates, even though they can’t help with the redetermination process itself, she says.
Some Medicaid plans also are partnering with community groups on programs that help low-income beneficiaries comply with the redetermination paperwork rules, Vitti says. But “plans are in a precarious position,” he points out. “They certainly can advocate for their members. But the state’s their customer.”
View the Families USA report at https://bit.ly/2UUt8xT. Contact Fishman at firstname.lastname@example.org, Murray via Jeff Van Ness at email@example.com, and Vitti and Shekhdar via Joe Reblando at firstname.lastname@example.org.
by Jane Anderson