As Idaho looks at Medicaid restructuring, providers ask legislators to keep doctor-managed care

Correction: This story was corrected to reflect that Idaho pays $1.5 billion of Idaho Medicaid’s total $4.7 billion budget. The federal government pays $3.1 billion.

Idaho doctors asked state legislators on Wednesday to let doctors continue managing health care for people on Medicaid, a health insurance program for the poor. 

Idaho formed a committee of legislators to study how to potentially restructure funding for the state’s Medicaid program, which uses a growing amount of state funds — up to $1.5 billion this fiscal year — but is mostly funded by the federal government. The group, called the Medicaid Managed Care Task Force, is meeting while the rest of the Legislature is out of session. It is expected to deliver recommendations to the Legislature on Jan. 31. 

Idaho Medicaid, which is an insurance program for the poor and people with disabilities, is structured differently for different programs. 

Behavioral health and dental care are run under what officials call managed care — when an insurance company manages what type of care patients can receive. But primary care has, since 2020, slowly been turned into a slightly different form of managed care that involves doctors to manage patient’s health care needs, without an insurance company as a middleman.

Officials call that doctor-managed care “value based care.” Idaho began contracts with value care organizations in July 2020, with five organizations covering 80,000 people, according to a slideshow the Idaho Department of Health and Welfare shared with the Idaho Capital Sun. The program has been expanded to 11 value-care organizations covering 242,648 people on Medicaid in July 2021. 

Though the state’s value care organizations are young, some providers who oversaw organizations report preliminary figures that the contracts have saved money. But the state has previously said official numbers won’t be in until this fall.

“Let’s keep what is good in Idaho Medicaid and build on this,” Dr. Ted Epperly, president of Full Circle Health, a value care organization, told the task force. 

Around the U.S., managed care is the most popular form of managing Medicaid programs. Forty states have managed care programs. Managed care organizations deliver care to over two-thirds of everyone on Medicaid in America, KFF reports.

Doctors, patient report issues with Idaho’s existing Medicaid managed care contracts

Some representatives of medical groups said being under managed care had caused more administrative headaches.

Aaron Houston, with the Community Health Center Network of Idaho, said counselors in his network block up to two hours per week away from taking care of patients to do paperwork. Behavioral health services through Medicaid are run by a managed care contract.

Dentists, whose Medicaid patients have been managed under a managed care contract for over 10 years, “have been challenged with below-cost reimbursement for” services, a letter submitted to the task force from the Idaho State Dental Association said.

“Our members’ experience under Idaho’s Medicaid dental plan is that they are expected to subsidize costs, and patients end up bearing the risk due to the challenges they face finding a provider who can afford to see them,” the letter said.

Ivy Smith, who was in foster care and remained on Medicaid as a young adult, told the task force she struggled to find a dentist to do a cleaning for three years. Then, once she had found one who was accepting Medicaid patients, that doctor told her that they required an X-ray and exam each cleaning, which her Medicaid insurance wouldn’t cover. She filed a grievance with the state’s dental contractor MCNA, which she said replied by saying her grievance was addressed — without finding her care.

Idaho Medicaid Director Juliet Charron, who attended the meeting, said the department would follow up with Smith.

“It is not the experience that we want Medicaid participants here in Idaho to go through,” she said, acknowledging “dental access challenges in our state.”

Doctors flag cost, care access issues with managed care nationally

Doctors also stressed that managed care organizations add administrative overhead costs to managing health care. The “floor” for overhead costs in a managed care contract is 15%, said Stephanie Myers, director of state affairs at Medicaid Health Plans of America, an industry group representing managed care organizations. That’s based on an 85% medical loss ratio, which is what rate of money in a contract that managed care organizations must spend on health care costs.

Replying to questions about concerns raised by providers about managed care organizations, Myers said those partially stem from requirements from the federal government.

“We have to push that on the provider,” Myers said. “But as I mentioned before, we’re always looking for ways to streamline.”

The Office of Inspector General recently found that Medicaid managed care organizations in Georgia denied requests for care — which insurance companies call prior authorizations — twice as often as Medicare Advantage plans, and that managed care organizations overturned those denials at lower rates than Medicare advantage plans, according to a synopsis of the report by KFF.

Value care organizations, in first performance year, promote profit. But official numbers aren’t in yet

Houston’s Community Health Center Network of Idaho — which runs the second largest value care organization in the state with nearly 50,000 members — said its contract had saved $4.6 million in 2022. 

“We would like to see the VCOs have a little bit more time to see if that would actually save money with the Medicaid redetermination,” Houston.

Charron, Idaho’s Medicaid director, previously told the panel that savings figures for value based care contracts were still being finalized, and that she expected to have that information ready this fall.

Idaho Hospital Association CEO Brian Whitlock said forming value care organizations held providers accountable for cost containment. The data is early right now, but he said Idaho value care organization decreased the per member, per month costs.

That “speaks volumes for the opportunities VCOS have to save money,” Whitlock told the task force.

“My recommendation is: allow VCOs to continue to work. Let that play out,” Whitlock said. And he recommended continuing to study how the state’s managed care contracts work.

What the task force is looking to down the road

Under both managed care and doctor-run care, which is commonly called value-based care, the state pays the organization managing patient care a set rate for how much each individual patient’s care should cost, averaged out into a per member, per month fee.

Idaho legislators also heard about how Utah’s managed care system capped per member, per month fees at the rate of the state’s total general revenue budget growth. Intermountain Health CEO Dan Liljenquist said the cap saved the state of Utah billions of dollars since it founded in 2011.

But, importantly, Liljenquist said Utah looked to medical payers to pass on savings to medical providers to reward them “for keeping people well.”

The task force meets next Aug. 31, and again on Oct. 4 and Oct. 16. The committee hopes to hear from other state Medicaid directors and to get a fuller picture of the managed care and value based care organizations in Idaho.

“If we get into managed care, we want to make sure it’s managed correctly,” co-chairman John Vander Woude said. 

Correction: This story has been corrected to state that Smith’s complaint was filed with the state’s dental contractor, MCNA.