There are significant gaps in healthcare that affect the accessibility to the state’s most vulnerable groups and it is only getting worse. In the last half century, legislators have sought to cut costs by delegating the task of handling patient care to Medicaid managed care organizations (MCOs). These organizations shoulder the burden of cost for a fixed rate per individual, which relieves the government the headache of administrative duties and serves the role of lowering costs and improving the predictability of incurring future costs. This way,MCOs can ideally spend more time improving efficiency of care and lowering costs for the government. However, this system has significant drawbacks, often worsening the very problems MCOs were meant to address.
One of the primary complaints of patients is that MCOs limit provider choice. The main complaint is that these organizations have contracts with a limited network of doctors, hospitals and specialists. This results in MCOs steering patients to exclusively these providers, which can limit accessibility to specialists, for example. This effect is especially amplified in areas where there are limited specialists and availability to begin with, such as in certain rural areas. This restriction further decreases accessibility and can lead to poorer health outcomes overall.
From the MCOs perspective, this restriction on providers allows them to negotiate favorable contracts with practices at discounted reimbursement rates, which in turn allows them to make a profit. The practices also have a vested interest in contracting with MCOs because they provide a somewhat more predictable, steady flow of patients. The prioritization of costs over the accessibility of patient care is evident and contributes to the inefficiency that MCOs were designed to protect against.
In addition, from a physician perspective, there is much more administrative overhead when privatized MCOs are involved. Whereas Medicaid and Medicare generally do not require prior authorization for procedures, except with rare exceptions, MCOs generally do. By restricting coverage and denying certain procedures, they create a back and forth that often delays care, sometimes leading to further complications in situations when timely intervention is key.
In addition, non-privatized systems use simpler, more uniform rules that allow for less organizational strain and fewer treatment delays. Various MCOs also have distinct codes and different levels of coverage depending on insurance and plan type. Understanding coverage and demystifying what procedures will be covered and what is not is also a huge time sink. This is exemplified by the billing process, which usually takes about a month due to a multi-step process that requires coding and claim preparation, claim submission, prior authorization reviews, denials, rejections, appeals and finally payment processing. This long chain of documentation stretches this process, creating further inefficiencies.
But this bureaucracy does not only hurt patients — physicians also deal with burnout due to high rates of rejections of coverage, which they must appeal and essentially convince MCOs that a procedure is medically necessary for the patient. Although the physician should have the final decision as to what is vital for the patient, MCOs make it so healthcare providers are forced to deal with the fact that prior authorization could be denied.
MCOs value profits over people, and they provide incentives to their employees for adhering to denial guidelines and use metrics to evaluate this strict “adherence.” However, it has been proven that MCOs often overextend and inappropriately deny claims even when they were legitimate and did not meet the criteria for denial. In addition, MCOs use delay as a tactic, as patients abandon treatment plans because of the time between the claim being submitted and either receiving an approval or denial. These strategies to maximize profit come at the cost of a patient’s health and many are powerless to stop it.
As my grandmother orders her luxury bath mat and antioxidant tablets with her monthly thirty-dollar allowance from Humana, an MCO, I recognize the perks these MCOs are offering in order to entice those to join what they consider to be an expanded coverage plan. While this may include a monthly spending allowance and discounted gym memberships, one questions the quality and extent of coverage if an individual were to suffer serious complications.
MCOs such as Humana are on the rise, catalyzed by the COVID-19 pandemic. Although it seems to be harmless at surface level, it is important to re-evaluate the motives of those lining their pockets, and if that aligns with what is beneficial for Americans as a whole.