Using the Lessons of Medicaid Managed Care to Inform Exchange Qualified Health Plan Standards

Guest blogger Shannon McMahon is the Director of Coverage and Access at the Center for Health Care Strategies, Inc.

If you’re a state starting to build your health insurance exchange, chances are you’re feeling that you could use some guidance right about now on any number of issues. One particularly helpful place to start may be right in your own backyard: your history with Medicaid managed care.

Health insurance exchanges are an unprecedented opportunity for states to build a continuum of coverage with Medicaid. States developing their exchanges not only stand to learn from their prior experience with managed care, but can combine those lessons with tools from private procurement to create a stable structure of coverage for low-income people.

A key responsibility of exchanges is certification of Qualified Health Plans (QHPs), based on criteria including network adequacy, marketing requirements, clinical quality measures, and consumer information. As state exchanges embark on the task of certifying QHPs, their Medicaid managed care requirements can be instructive on multiple levels.

In the past 20 years, states have learned an enormous amount from both their mistakes and their successes in purchasing managed care services for Medicaid beneficiaries. Today, states vary in their managed care purchasing approaches, which range from highly regulated arrangements to free market models intended to drive value though competition. State exchanges are likely to have a similar range of strategies, and can learn from and – perhaps in some cases – adopt the purchasing levers and requirements used in managed care programs at both ends of the spectrum.

In a November policy brief from the Center for Health Care Strategies, authors from Manatt Health Solutions examined Medicaid managed care contracts in six states. The brief notes opportunities for exchanges to “borrow” from and align QHP standards with managed care requirements, as well as areas where managed care requirements may need to be modified for adoption in exchanges.

Not all Medicaid managed care requirements can or should be operationalized in state exchanges. Federal rules — and, in some cases, state rules as well — were adopted in the 1990s, when there was far less experience with managed care models. Medicaid managed care has evolved considerably since then; some of the initial rules were prescient and assured successful managed care programs for consumers and states alike, while others proved unnecessary, adding costs or imposing barriers to effective managed care programs.

However, whether the focus is on network adequacy and marketing strategies or quality initiatives, whether implementation failed or succeeded, the experience of state managed care programs offers a foundation for exchanges as they determine QHP certification and selection protocols. In addition, by aligning standards across Medicaid and QHPs, exchanges can maximize their influence on health care delivery models and facilitate continuity of coverage for individuals and families.

Again, for states committed to creating a continuum of coverage, this is truly an unprecedented opportunity. Coordination between exchange staff and Medicaid purchasing experts is key. Through the experience of Medicaid managed care, you have access to a full box of tools at the state level to support your newest endeavors. Don’t be afraid to open the box and use them well.

Is your state considering its experience with Medicaid managed care as it works on building an exchange and developing standards for QHPs? Tell us on State Refor(u)m in your state’s milestone discussion or through the blog comments below.