The Changing Landscape of Medicaid Managed Care Trends

By Danélia Botes

December 4, 2023

The Rising Influence of Medicaid Managed Care Trends

Medicaid Managed Care (MMC) has seen a significant surge in recent years. As of 2020, MMC insured a whopping 70% of Medicaid beneficiaries, equating to 57 million individuals. This system relies on a private insurer to cover a beneficiary’s medical care in return for fixed payments from state Medicaid agencies. A critical function of MMC insurers is to negotiate prices with hospitals, a process that directly impacts government health expenditures and the access to care for Medicaid beneficiaries.

Unveiling the Mystery of MMC Prices

Despite the importance of MMC prices, little information is available on the subject. To shed light on this, a comprehensive study was conducted using hospitals’ self-disclosed pricing information. The data was obtained from Turquoise Health as of July 3, 2023, which compiles prices reported by hospitals in compliance with the Hospital Price Transparency rule.

The Variation in MMC Prices

This study included Medicaid Managed Care trend prices reported by 1487 general acute care hospitals. Findings showed that MMC prices varied across outpatient service types and states. For instance, the median MMC prices for surgery and medicine were highest in North Dakota and lowest in West Virginia. Similarly, MMC prices for imaging were highest in Utah and lowest in Wisconsin. Furthermore, MMC prices for Emergency Department visits were highest in Washington, DC, and lowest in Wisconsin.

Implications and Future Directions

Contrary to popular belief, Medicaid prices are not always lower than Medicare prices. This study revealed that MMC outpatient hospital prices can sometimes exceed Medicare rates, particularly for imaging services. These findings suggest that MMC hospital prices could significantly affect government health expenditures and the access to care for Medicaid beneficiaries. Further research is needed to explore the causes of variation in MMC hospital prices, including potential market and policy factors.

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