Exploring Managed Medicaid Challenges In Home-Based Care

Home-based care providers working with Medicaid managed care plans have to navigate an operating environment that is more administratively complex.

That’s one of the key takeaways from a recent webinar hosted by the National Association for Home Care & Hospice (NAHC).

Since 2020, states like North Carolina, Oklahoma and Idaho have implemented managed care programs.


Broadly, Medicaid managed care can be placed into two buckets. One of these buckets is comprehensive managed care, according to Damon Terzaghi, director of Medicaid advocacy at NAHC.

“This is really where you have a health plan — a managed care organization — that is responsible for the delivery of the services to the individual,” he said during the webinar presentation. “That’s where you have someone like a Centene, a Cigna, United Healthcare, Molina, whomever else, as a contractor to the state that becomes really that primary locus of Medicaid service delivery.”

In this comprehensive managed care model, the state makes a per member, per month payment to the managed care organization. These payments are called capitation payments. The managed care organization then becomes at-risk for the delivery of services.


“Essentially, if the individual utilizes more care than that per member, per month rate, the managed care company potentially loses money, or if they utilize less care than the rate, the managed care company turns a profit,” Terzaghi said. “This really is the predominant way of delivering services in Medicaid today.”

The second bucket includes other types of managed care, such as primary care case management (PCCM), limited benefit health plans and health homes.

With PCCM, payment for services remains fee for service, paid directly to the provider.

“There is some sort of a primary care provider, usually a physician but not always, that receives a per member, per month payment, not for the entire service package, but just to cover coordination, management of services, supports connection to other sorts of services necessary to support the individual,” Terzaghi said. “That’s where that case management function comes in.”

Limited benefit health plans refer to plans that aren’t comprehensive, such as a state that has a managed care plan that’s only responsible for delivering dental services or behavioral health services.

The Oregon dental care organizations (DCOs) are an example of a limited health plan. Florida also has limited benefit plans.

Health homes are “beefed up” primary care case management, according to Terzaghi.

“Health homes remain in a fee-for-service delivery system primarily, but are a team-based approach to coordinating and managing care for individuals,” he said.

As of fiscal year 2020, over 70% of all Medicaid beneficiaries were enrolled in a comprehensive managed care plan. Terzaghi noted that this number is likely higher now.

In terms of geography, it’s typically states that are less populated with sparse density that don’t have managed care.

“When you have these sparsely populated states, like Montana or Alaska, it is a little bit harder to generate those adequate risk pools to have a functional managed care program,” Terzaghi said.

For providers, operating under managed care means going from a single point of contracting to multiple plans.

“CMS requires that, unless there is a rural exception, there must be at least two plans available in every region where individuals are required to participate in managed care,” Terzaghi said. “You as a provider have at least two plans that you need to deal with, in terms of enrollment, credentialing, contracting and everything in between.”

It also means that providers go from having a state fee schedule to negotiated rates with multiple plans.

“It can be a pretty significant administrative lift and a pretty stark burden,” Terzaghi said. “In fact, we’ve seen the federal government do what we call business acumen training, where they have built out resources to help entities do that type of negotiation and training.”

Providers operating in managed care states tend to have higher administrative costs and mixed results on reimbursements.

“Some of them tend to be at the state fee-for-service schedule, some below and some a little bit above, really depending upon the results of the negotiated rates,” Terzaghi said. “You can’t really say definitively that managed care means you’re going to get a rate cut, or managed care means you’ll get a flat rate.”

Ultimately, smaller providers tend to struggle a little bit more in a managed care environment. But some home care providers have formed meaningful, constructive relationships with health plans that have lasted years.

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