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Engage Consumers March 26, 2020

For Medicaid Plans, COVID-19 is a Learning Opportunity

Partner, Health and Life Sciences, Oliver Wyman
Principal, Health and Life Sciences, Oliver Wyman
Principal, Health and Life Sciences, Organizational Effectiveness, Oliver Wyman
Key Takeaway
Because of new movements happening post-COVID-19, Medicaid is now helping more people get tested and receive treatment. #OWHealth

Editor’s Note: The following article is part of an ongoing series offering our strategic advice and expertise on what healthcare industry stakeholders should do immediately in response to the rapidly evolving novel coronavirus (COVID-19) pandemic. 

COVID-19 isn’t just a medical crisis. It’s an economic crisis. Consider, for example, the recent nationwide spike in job losses. A reported 281,000 Americans filed new claims for unemployment earlier this month – a historic surge of 30 percent.

Some experts are concerned the COVID-19 recession could become a global depression. Although the pandemic’s economic aftershocks are impacting all payers, Medicaid plans in particular can expect unprecedented enrollment surges, on top of all the other issues created by the pandemic.

We’ve written before about payers' unique COVID-19 situation. But, in general, there’s been less advice out there for Medicaid plans, which face several additional challenges in their crucial mission of coordinating care for the most vulnerable. 

What to Do Now

One in five Americans is on Medicaid. Medicaid populations – with high rates of poverty, illness, and homelessness – are challenged populations – even at the best of times. Existing and new Medicaid members will experience a life-altering experience – having lost their livelihoods as hours are reduced, companies close, and cities undergo lockdowns. The economic difficulties are compounded by the end of childcare and free meals as schools close, support networks are disrupted, and the virus takes more lives. Amidst the COVID-19 outbreak, Medicaid’s status quo is shifting. For instance, states now can seek approval for more flexibility regarding who’s covered and what for. This kind of thing is reserved for true emergency situations. In short, because of new movements happening post-COVID-19, Medicaid is now helping more people get tested and receive treatment.

Empathy must at the heart of your interactions with Medicaid members. At the same time, your members desperately need information from you about the disease, how to respond to it, and how to work with you. Be proactive in communicating with them. Consider using new tools – for example, 30-second videos that can be watched on a cell phone. Your community resources will be doubly important in helping your members find food, community daycare, transportation, telehealth, and other non-healthcare necessities. And there may be segments in your provider network – for instance federally qualified health centers (FQHCs) — well-positioned to assist.

Regulation and procedures will be in flux, as the Centers for Medicare & Medicaid Services (CMS) and state-level agencies work out the details of eligibility and COVID-19–related benefits. It’s reasonable, though, to expect confusion as changes are rolled out. Therefore, Medicaid plans must stay in regular touch with regulators. One key area for concern for both sides: What can plans do to speed up verification of eligibility so new members are not bogged down in the process – especially when time is of the essence for COVID-19 testing and treatment? And how do plans stay one step ahead so they can quickly enact other changes wrought by regulators attempting to ease the crisis?

Healthcare providers are likely to be overwhelmed by patients needing care. Many will be working shorthanded as staff succumb to the virus. Wherever possible, make processes easier for providers. Look closely at how you handle prior authorization, billing, and testing/treatment benefits. Are there areas where tight financial control needs to be balanced against speed of treatment?

Medicaid plans face particularly difficult choices in protecting staff, since much patient outreach to distressed populations needs to be face-to-face. Although there’s no dispensing with feet on the street, every Medicaid plan needs a strategy for balancing outreach against good civic sense and the need to preserve quarantines and home-sheltering.

Planning for the Long Run

COVID-19’s impact on employment and the economy is widely projected to last for 12 to 18 months. Medicaid plans must answer several key questions looking forward:

  1. What’s your capacity? Where do you need to scale up to support a potential membership surge? Start tracking which areas and regions are hardest hit. Understand the demographics and needs of local populations likely to be enrolling in Medicaid.
  2. What’s your financial status? Revisit risk-based capita and cash reserve estimates. Check your annual budget – see how projections for capital expenditures and operations expenses must be adjusted as more members come on.
  3. Which of your current commercial members are likely to shift to Medicaid? Analyze existing commercial products to understand which segments are most likely to see major losses of employer-sponsored coverage and how it will impact your Medicaid membership.
  4. How prepared are your partners? Check with your First-Tier, Downstream, and related Entitles (FDRs) and vendors. Ensure they are ready to support you and your new members.

Treat COVID-19 as a learning opportunity. The stresses your business undergo in coming months will offer insight on ways to permanently improve your operations and processes. Capture that insight: You’re going through the pain. Harvest the gain.

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