• Engage Consumers

Managed Medicaid: Savvy Providers Customize Member Incentives


Blog Header Image

As Managed Medicaid continues to grow, payers have been trying their hand at Medicaid member incentive programs as a lever to improve member health and thereby control medical costs. Several states have allowed managed care organizations to partner with Walmart to offer gift cards. Now, with ongoing provider interest in assumption of financial risk, pockets of risk-based payer-provider Medicaid contracts are emerging. Oliver Wyman’s Parie Garg, with Engagement Manager Sarah Eizenga, shares ideas for how providers can similarly incent healthy behavior change among their Medicaid population:

The often transitional nature of the Medicaid membership and thinner overall margins create a much higher bar for success in incentive programs than when working with commercial membership. Not only do at-risk Medicaid providers need to encourage behavior change to earn a return on their upfront investment, but they need to see near-term returns too, before the membership churns.

Savvy providers are testing the value of incentive programs of their own. One Florida-based primary care group with at-risk Medicaid membership offers members a gift card for visiting the office each quarter and completing preventative care services that are due. Not only does this enable better quality care but it also positions the practice to identify and address any rising concerns that could impact health and keep member enrollment up to date.

A few key strategies to keep in mind when designing Medicaid-focused incentive programs:

  • Keep it simple. Health is one of many topics on the minds of Medicaid members and to get their attention, program design must make it easy to earn rewards. Forget opt-in clauses, or earning points toward longer term rewards, programs must be simple and provide nearly instant gratification if they are to earn Medicaid member mindshare. A good starting point is shaping programs around preventative health or HEDIS-related screenings. Programs like these have the dual benefit of allowing members to immediately earn rewards and providers to earn additional reimbursement in any contracts tied to quality metrics.
  • Keep Medicaid in mind. The value and format of rewards themselves should be Medicaid-specific. Incentive programs for commercial members often use differential deductibles or co-pays to engage members but this doesn’t always work in Medicaid where enrollment or services are often at no cost to the member. Instead, providers can follow the creative lead of payer-sponsored Medicaid incentives and use gift cards that are typically $10-$100 per award – with the promise of more to come if the member continues to engage. Better yet, there may be local solutions – stores or organizations that are part of the member’s everyday life – that could be the anchor point for rewards.
  • Keep it in the community. Medicaid is a hyper-local business and the program should be designed to meet members in their communities. Successful grass-roots programs push messaging out into the local community center, or have boots-on-the-ground care managers and community workers dispersing program information when they meet with members in their homes. While incentives can be compelling enough to pull members back to the doctor’s office, lowering the barriers to care by meeting members in their community gains traction.

Of course, pushing to near-term returns is hard and market and member-specific preferences will be an important contributor to program success. Providers will do well to leverage best practice learnings, engage their local members for feedback and input, and embrace a “test-and-learn” approach to maximize success.


Join our community of innovators. Become a contributor to Oliver Wyman Health. Email your ideas to the Editor at OWHealth.Editor@oliverwyman.com.

About the Author

Parie Garg, PhD portrait
Parie Garg, PhD Partner, Health & Life Sciences, Oliver Wyman

Parie has experience building value-based care delivery programs for health plans and provider systems and has guided several companies in the design and development of innovative care delivery models, with expertise in physician compensation and government programs.