Despite the expansion of Medicaid coverage under the Affordable Care Act, accelerating demographic shifts and increasing reimbursement pressures continue to put pressure on the health care safety net. And some hospitals’ current strategies to manage payer mix have contributed to safety-net hospital closures, exacerbating market-wide access challenges.

As financial pressures across all payer segments intensify, hospital and health system leaders need a more intentional Medicaid strategy. Providers must protect both margins and access in order to preserve the safety net.

This study teaches the necessary steps for stabilizing the community safety net under current Medicaid economics, explains how to evaluate and navigate the transition to Medicaid risk, and outlines the fundamentals of succeeding under Medicaid risk.

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12 imperatives to establish a sustainable Medicaid strategy

Addressing avoidable low-margin utilization flashpoints

Preventable Medicaid ED and inpatient volumes are exacerbating both margin and access challenges. Organizations must dedicate resources to helping patients effectively navigate the health system and fill gaps in the delivery network to prevent avoidable and costly utilization.

1. Stratify super-utilizers to customize level of intervention (p. 22)
2. Minimize high-acuity mental health needs through crisis management (p. 26)
3. Establish bidirectional community clinic partnerships (p. 33)
4. Address most preventable non-clinical drivers of inappropriate utilization (p. 39)

Extending risk strategy into Medicaid

In a world of vulnerable margins, risk contracting is becoming an increasingly attractive option for ensuring financial sustainability. To develop an intentional Medicaid risk strategy, organizations must expand their care management capabilities beyond the baseline investments that are common for Medicare and commercial risk contracts.

5. Predicate transition to Medicaid risk on care management capabilities (p. 47)
6. Target manageable entry point to establish baseline experience (p. 51)
7. Align Medicaid contract terms with existing risk agreements (p. 59)
8. Capitalize on emerging opportunities to rapidly expand risk strategy (p. 63)

Succeeding under Medicaid risk

After entering into risk arrangements, providers must expand their care management capabilities to meet the unique needs of the Medicaid population.

9. Augment staffing model to include non-clinical roles (p. 72)
10. Hone risk stratification methodology with social determinants of health (p. 75)
11. Recruit patients to care management system (p. 80)
12. Deploy specialized clinical models for select high-cost segments (p. 86)

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