Idaho health care providers wary of moving Medicaid to managed care model

BOISE — Health care providers are asking the Legislature to give its current model for Medicaid, which was implemented in 2022, a chance to play out before moving on to another model. 

The Medicaid Managed Care Task Force on Wednesday heard from a variety of stakeholders about the potential merits and drawbacks of switching to a managed care model in an attempt to control the ballooning costs of Medicaid. The task force is co-chaired by Sen. Julie VanOrden, R-Pingree, and Rep. John Vander Woude, R-Nampa. 

Managed care involves contracting with a third party to administer and oversee Medicaid benefits. Some of those who spoke to lawmakers Wednesday said managed care would create budget stability in the program, while others said it would result in unnecessary administrative burdens and costs by adding a middleman.

“Early intervention in illness and the provision of quality preventive care upstream reduces those downstream health care costs that are substantial,” said Dr. Kelly McGrath, of Clearwater Valley Health and St. Mary’s Health. "We often know the individual stories of what this looks like, and it cannot be achieved by remote managers in an MCO who are intent on maximizing their profits through the creation of administrative burdens and blanket rationing of care." 

McGrath, as well as other doctors and representatives of local hospitals, lauded the efforts of Idaho’s recently implemented system of value-based care, which went into effect Jan. 1, 2022. The Idaho Department of Health and Welfare contracted with multiple organizations called value care organizations, or VCOs, which are led by hospital networks and primary care providers. The system is designed to hold the providers accountable for outcomes and costs in exchange for an ability to share in savings, according to the health department website.

The interim task force heard from around 15 people representing physicians, members of existing VCOs, hospitals, the Coeur d’Alene Tribe, a current Medicaid user, managed care organizations, the libertarian think tank Cato Institute and the Idaho Freedom Foundation.

Committee members also heard a presentation from a former Utah lawmaker about rolling out managed care for the neighboring state’s Medicaid program. Dan Liljenquist, now chief strategy officer of Intermountain Healthcare, said that Utah’s rollout of managed care in 2011 has helped contain costs of the program and incentivized better care.

Liljenquist said the keys to the state’s success were capping Medicaid spending from the general fund, incentivizing preventive care in making sure providers were benefiting from savings, and focusing on quality and customer satisfaction.

“Utah has had a very stable Medicaid program since that time,” he said. 

Many of the health care providers and hospital representatives who spoke argued that Idaho’s current system needed more time to mature and would likely provide similar outcomes without having to go through an out-of-state third party to administer it.

Brian Whitlock, president and CEO of the Idaho Hospital Association, said the full data on the first performance year of Idaho’s current system hasn’t come in yet, but preliminary numbers indicate it has already had some successes.

“The one thing that we do know for sure is that the department decreased the per-member per-month target costs for VCOs in those contracts,” Whitlock said, “so I think that speaks volumes for the opportunity that VCOs have to not only save money, but also to improve health outcomes because those are all spelled out in the VCO contracts.”

Whitlock said that more than 97% of Idaho’s Medicaid recipients are enrolled in the state’s VCOs, all of which are led by health care providers.

“In my opinion, turning this over to an insurance company to run would just shrink the provider network around the state,” he said.

Idaho’s Medicaid program already uses managed care organizations for its behavioral health and dental programs as well as for those who are dually eligible for Medicaid and Medicare. 

Dr. Kim Keller, president of the Idaho State Dental Association, said that Medicaid dental benefits have been run through a managed care contract for over a decade.

“I can say that from the health care providers' point of view, specifically dentists, it doesn’t look much like managed care to us in any way,” Keller said. “For us, it simply presents itself as another insurance company with complicated rules and more hoops to jump through.”

He said the dentists are left out of major decisions related to the contracts and oversight of the programs.

Jenny Robertson, director of government programs at Blue Cross of Idaho, said she’s also worked in other states on managed care programs and has seen the successes the system can bring. She’s also been involved in the managed care system in Idaho for those in the dual eligibility program. 

“We work in partnership with the Department of Health and Welfare, and that’s how it happens in every state, so they are actuarially sound. It’s a predictable model and we bear the risk of our cost of care for the members,” Robertson said.

She said that some of the increased administrative burden is because the contracts are heavily regulated but that this improves accountability and helps protect the vulnerable populations served by these health care plans.

Just one of the speakers was a user of Medicaid programs; Ivy Smith uses Medicaid for her dental care and shared her concerns with widening the managed care model to other services in the program.

Smith said she has struggled to find dental providers who are accepting Medicaid patients. She also ran into issues with the number of services that would be covered under the system and found the grievance process through the managed care organization for filing a complaint inadequate — she received a letter acknowledging her complaint had been verified but that no further information would be provided about the actions taken to address it.

“I understand that this task force is interested in finding ways to contain costs, but I have significant concerns about what moving the rest of Idaho’s health care system into managed care would do to my ability to access health care and mental health services,” Smith said. “... Right now, under our current health system, I am able to receive high-quality health care and mental health services in a timely manner.”

Like Smith and the health care providers, the representative from the Idaho Freedom Foundation also had concerns about moving to managed care. Niklas Kleinworthy, a policy analyst with the IFF, suggested that managed care wasn’t an effective method for containing costs.

Unlike the other stakeholders, he recommended repealing Medicaid expansion. Medicaid expansion was approved by voters in 2018 and widened eligibility to those who had earned too much to qualify for traditional Medicaid but not enough for subsidies on the state’s health care exchange.

Kleinworthy also suggested re-evaluating the state's prescription coverage program.

Dr. Ted Epperly, president and CEO of Full Circle Health, urged lawmakers to keep the current value-based system in place.

“Do not make a decision, as the Idaho Legislature, to contract this uniquely Idaho program out to an external Medicaid managed care contractor,” Epperly said. “The reason for this recommendation is that we have an ongoing Medicaid managed care program known as healthy connections (the VCO program) that has been very successful.”

The legislative task force is scheduled to meet again on Aug. 31.