Managing risk and compliance: Medicaid

The challenge

A substantial administrative burden. Compliance challenges. Increasing regulatory scrutiny. Extensive reporting and verification requirements. All costs of a payer's participation in government health programs. Managing Medicaid plans poses especially complicated and burdensome challenges. Medicaid is funded by state and federal governments and administered by 50 state agencies. Each state has considerable flexibility, through the use of waivers, to design its Medicaid plans to meet budget constraints and to deliver care appropriate to the needs of its citizens.

In contrast to Medicare, which serves a singular population - the elderly and disabled - Medicaid serves several populations, mostly low-income Americans, but also people with modest incomes who qualify because they belong to specific categories, such as pregnant women, children or those with special medical needs. Some population groups may be eligible for both Medicare and Medicaid. Sorting out the complexities of "dual eligibles" and complying with extensive federal restrictions and disparate state programs make Medicaid plans daunting to design and administer.

A bewildering compendium of state Medicaid plans. Each constantly evolving. States often use their Medicaid programs as an instrument of health insurance reform. You need to understand the implications of each reform proposal, because these initiatives can have a significant effect on your profitability.

How we can help you

Designing Medicaid plans and setting rates is complicated and risky, and calls for specialized expertise.

During our 20+ years of experience in providing comprehensive actuarial consulting services to state Medicaid programs, we have set rates for Medicaid managed-care programs in 15 states and served some of the most complex programs in the country. We have developed and implemented methodologies for pricing and risk adjusting for Medicaid managed-care programs. We can conduct risk assessments and devise risk- adjustment strategies for specific plans and populations.

You need to understand the implications of evolving legislation on your plan designs and profitability.

We help public and private payers analyze health legislation and plan proposals, and understand their implications on compliance, rates and profitability.

Common services include:

• Developing a program from its inception, including design elements, negotiations with health plans, assistance in developing regulations and program monitoring activities
• Modeling economics and program design options for federal waivers
• Assessing whether a state's rate-setting methodology is actuarially sound and in compliance with federal guidelines