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Billions of Dollars Flow into Private Medicaid Plans with NO Cost Oversight or Efficacy of Treatment Determined

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Cost containment has become a leading factor in the delivery of healthcare. What are some of the issues that are contributing to these burgeoning costs? One of them is Medicaid. We spent over $576 billion on Medicaid programs in 2017, as reported by the Kaiser Family Foundation.

A recent article in Kaiser Health News noted that 75 million low-income Americans rely on private Medicaid managed care programs. These programs have grown rapidly since 2014, boosted by the influx of new beneficiaries under the Affordable Care Act (ACA). Many states eagerly tapped into the services of private insurers as one way to cope with the expansion of Medicaid costs under the ACA, which has added 12 million people to the rolls. Outsourcing these government-payer programs to private insurers has become the preferred method for handling Medicaid in 38 states.

In return for their fixed fees, these private insurers provide treatment within a limited network — in theory — allowing for more judicious, less expensive care. States contract with health plans as a way to lock in some predictability in their annual budgets. Participating states in these private programs are funneling nearly $300 billion annually into private Medicaid insurers.

Are these private Medicaid insurance companies — who are now receiving hundreds of billions in public money — earning their fees?

Hard evidence is lacking that these private contractors improve patient care or save government money. When auditors, lawmakers and regulators examine the records, many conclude that private Medicaid insurers fail to account for the dollars spent, document the care delivered, or provide access to a sufficient number of doctors. Oversight is sorely lacking and lawmakers in a number of states have raised alarms even as they continue to pay billions. Another “fly in the ointment” is that these private plans get to keep what they don’t spend. That means profits can flow from greater efficiency — or from skimping on care and taking in excess government payments.

What is the solution to cost containment on these government-funded private payer programs?

Independent outsourced auditors who have deep experience in auditing insurance claims and determining the efficacy and quality of medical treatments can be utilized to monitor these privately managed care plans.

These independent outsourced auditors will have the information technology solutions to deliver highly skilled professionals, robust audit processes, proprietary workflow engines, and world-class IT infrastructures.

They can deliver immediately audit workflow and operations management to ensure consistency throughout the managed care plan audit process that will monitor and report the true cost of medical treatments and the quality of care being provided to patients.

Let’s get the “fox out of the henhouse” and move toward a system that will contain costs, and more importantly, improve the patient care being delivered.

GeBBS Healthcare Solutions is a leading technology-enabled provider of revenue cycle management (RCM) and Government Payer solutions. GeBBS’ innovative technology, combined with its over 6,000-strong global workforce, helps clients improve financial performance, compliance, and patient satisfaction.

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