No MCOs for HUSKY

According to MACPAC, Medicaid’s federal oversight commission, despite many studies there is no evidence that MCOs save money or improve access or the quality of care in other states. MCOs often have skinny networks with few participating providers available to members.

MCOs do not save money for states. Other states’ agency staff spending is very similar to Connecticut’s as a percent of total costs. However, those states’ Medicaid budget must also cover the costs of MCO administration and profits. Inefficiencies include MCO advertising to attract healthy members, federal taxes, overlap of functions between MCO and agency staff, agency staff to manage MCO contracts, and costs to collect  data, sort out the differences between MCOs, and reporting. Data differences between MCOs were a perennial, persistent problem with HUSKY MCOs, inhibiting any ability to hold them accountable for performance conditions or quality standards.

In 2021, three in four US Medicaid members were in MCOs. There are a few reasons states choose to have private insurance MCOs run their Medicaid programs.

It is easier – much of the hard, messy administration is handled by an outside company. When Connecticut had MCOs, questions and complaints to the administration were routinely referred away to the MCOs for fixing. They often sent us back to the state.

Some states want more predictable budgets. After signing contracts, the state can predict how much members will cost per person. However, changes in enrollment and risk profile of the membership affect costs. In the past, Connecticut’s MCOs more than made up any losses (or reduced profits) by raising future rates to cover contingencies. A point was made regularly that they were never really at risk.

In some states fee-for-service Medicaid isn’t working. Members have great difficulty finding participating providers, services can be very hard to access, and the quality of care is not good. Managed care makes sense in these states. However, Connecticut is not in that position – access and quality of care now are better than most states with MCOs.

However, MCOs do not save money for states. Other states’ agency staff spending is very similar to Connecticut’s as a percent of total costs. However, those states’ Medicaid budget must also cover the costs of MCO administration and profits. Inefficiencies include MCO advertising to attract healthy members, federal taxes, overlap of functions between MCO and agency staff, agency staff to manage MCO contracts, and costs to collect  data, sort out the differences between MCOs, and reporting. Data differences between MCOs were a perennial, persistent problem with HUSKY MCOs, inhibiting any ability to hold them accountable for performance conditions or quality standards.

In a mystery shopper survey commissioned by DSS, 40% of providers listed in MCO panels did not participate in the program. HUSKY MCOs refused to comply with state Freedom of Information laws. An audit by the Office of State Comptroller found that the state was overpaying HUSKY MCOs by five percent. The state medical society filed suit against the Medicaid MCOs for engaging in deceptive and improper practices that harm patient health. One year after Connecticut’s transition to Medicaid managed care, the Office of State Comptroller documented problems with attracting enough providers to the program resulting in enrollment suspensions, that 10% of children did not have a primary care provider, and difficulties reporting data on services delivered.

Connecticut has saved billions of taxpayer dollars since moving from MCOs to managed Fee-for-Service.

Connecticut Medicaid members have a lot to lose. The quality of care in Connecticut is much better than the rest of the country that use MCOs. Connecticut now scores in the top quarter of states for 13 of 22 child health quality measures and for 17 of 28 adult health quality measures.

Connecticut advocates were concerned that members will be denied necessary care, jeopardizing their health.

Medicaid MCOs in other states have narrow networks of available providers and impose more administrative burdens on providers. As providers leave the program, more patients have to switch providers and demand for care increases for the remaining providers, which leads to more providers fleeing the program or refusing new patients.

Recent efforts to improve HUSKY -- including primary care support, updating provider payment rates, support for justice-involved people, expanding access to mental health and substance use disorder care -- would be at risk. State policymakers will have to negotiate these improvements with the MCOs rather than directly implementing as we do now.

All these problems fall hardest on seniors, people with disabilities, and communities of color expanding health disparities.

Long-awaited provider payment increases were at risk, as MCOs will negotiate their own contracts with providers. Members may have had fewer providers to choose from. Providers would face more administrative burdens, requiring different processes with each MCO. When Medicare adopted MCOs in Medicare Advantage, requirements for prior authorization rose and more claims were denied. Hospitals are dropping the Medicare Advantage plans.