Three takeaways from United’s MCO proposal

At the beginning of the month, DHSS posted its Notice of Intent to award the Managed Care Organization (MCO) contract to UnitedHealthcare as part of the Medicaid Coordinated Care Demonstration Project. Like all health policy wonks, I read through all 93 pages of United’s proposal and found three key takeaways.

 

United was the only MCO in the nation to bid.

United already provides Medicaid managed care services to more than 5.9 million people in 24 states. With a state population of less than 750,000, the scope in Alaska is small – and this is not a statewide model. United is going to coordinate care in the boroughs of Anchorage and Mat-Su, Fairbanks and Juneau. There is opportunity to scale the MCO model to all of Alaska but there isn’t a set plan or timeline to do so yet.

It’s possible that the RFP wasn’t attractive to other MCOs, because of the small scope or the unique challenges of health care in Alaska, or rumors that United was responding was enough to discourage other MCOs from bidding given United’s experience in other markets.

 

United committed to all nine project elements

The RFP outlined nine project elements and bidders only had to pick three for the scope of work. United picked all nine.

  1. Comprehensive primary-care-based management for medical assistance services, including behavioral health services and coordination of long-term services and support;
  2. Care coordination, including the assignment of a primary care provider located in the local geographic area of the recipient, to the extent practical;
  3. Health promotion;
  4. Comprehensive transitional care and follow-up care after inpatient treatment;
  5. Referral to community and social support services, including career and education training services available through the Department of Labor and Workforce Development under AS 23.15, the University of Alaska, or other sources;
  6. Sustainability and the ability to achieve similar results in other regions of the state;
  7. Integration and coordination of benefits, services, and utilization management;
  8. Local accountability for health and resource allocation; and/or
  9. An innovative payment process, including bundled payments or global payments.

United’s strategy for Alaska includes remote monitoring and telehealth, integrating behavioral health and substance use disorder services, improving coordination of care and non-emergency medical transportation, services, and implementing in-home and community support services.

United also expressed interest in expanding the scope of the project to address social determinants:

“We believe we can, through expansion of this project, provide the State with additional savings, should the Department be interested in braiding other funding streams around housing and employment, thus streamlining health care and social determinants costs.”

 

United projects savings of $47.9m

United believes the program will be budget neutral to the State in the first year, and will achieve savings in the following year.

Over the project’s initial three years, United projects $17.5 million in medical savings and $30.4 million in administrative savings through managed care activities and a reduction in state administrative expenses. This totals $47.9 million in savings just from the first three years.

These savings could help the State avoid a future shortfall in Medicaid funding. The State is currently delaying some Medicaid payments to providers until the start of the fiscal year on July 1 due to a funding shortfall of roughly $20 million.