Managed Medicaid Plans Must Adopt Digital Telehealth Solutions to Secure Re-Procurement

Updated on April 22, 2019

By Michael Scarbrough

If it isn’t already clear, the headlines are signaling that the era of healthcare innovation is upon us and moving swiftly. Managed Medicaid plans could be losing out on millions of contracted lives (and $$) by lagging in the adoption of digital telehealth resources to improve access to care and patient outcomes. Leveraging an eConsult solution is a proven way to increase access to high-quality care while lowering system cost, and one that will ensure innovation scoring opportunities are not missed. 

Innovation is the new constant

Although the pace of innovation within the healthcare industry has traditionally been slow moving, its clear organizations are increasingly seeking new ways to innovate in order to support value-based care models. The recent partnerships formed between Amazon, Berkshire Hathaway and JPMorgan Chase, CVS and Aetna, Cigna and Express Scripts, etc, strongly indicate that innovations rooted in providing better care for lower costs are paramount to the success and growth of healthcare.  

In a speech at an Alliance for Connected Care telehealth policy forum in November, CMS Administrator Seema Verma spoke about how “relentless innovation is a crucial driver in creating value across all industries” and that “healthcare innovation is in fact serving as a catalyst to improving quality of care, enhancing access to care, increasing efficiency in the system, and lowering healthcare costs.”

It’s becoming progressively clearer that payers whose ongoing strategies are not placing precedence upon innovation will be left in the dust. Not only will this be costly for access and quality, it can jeopardize Managed Medicaid payers’ chance of re-procuring and expanding contracts.  

Managed Medicaid Plans Must Innovate to Reach Objectives

Managed Medicaid plans are especially in need of innovations to improve the value and efficiency of healthcare provided. States are spending roughly 30% of their global budgets on Medicaid. And as Medicaid enrollment remains relatively flat, spending will continue to increase through 2019. 

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To ensure they’re getting the best value, state Medicaid Programs re-procure contracts with managed care payer groups on a perpetual basis—sometimes as frequently as every 3 years. The re-procurement process drives existing plans to defend their network’s business, creates opportunity for new entrants and for existing players to enter a new market.

States use these procurement periods as an opportunity to seek updated solutions to long-standing or emerging challenges; often assigning points to questions that speak to innovations in care delivery for Medicaid recipients. The 2016 Managed Medicaid regulations require Managed Care Organizations (MCOs) to implement value-based purchasing or participate in delivery system reforms and many times states want to use MCOs to test leading edge solutions for viability before large scale rollouts.

Key Medicaid Challenges

Barriers to care and access within Medicaid programs are often some of the most important issues states and managed care plans are attempting to address. Provider supply is a challenge for all payers, especially Medicare. The Kaiser Family Foundation2017 surveyof Medicaid Managed Careplans reported high rates of difficulty in recruitment for some specialties and listed provider supply as a leading challenge. 

Timely access to care is key to healthcare goals as delays in accessing necessary care exacerbate health conditions, in turn leading to more costly treatment and poor outcomes. This lack of care access worsens a health crisis which could have been easily avoided with more proactive (and less expensive) care.

A key takeaway from 2018’s 11th Annual Medicaid Managed Care Summit was that “Reforming healthcare in the US is not about spending more money, but about moving around the dollars that we’re already spending.” As re-procurement approaches for Managed Plans, eConsult platform adoption provides an opportunity for health plans to solidify their value-based initiatives by directly increasing access to timely high-quality care. Adoption of eConsult platforms allows Medicaid payers to expand access to needed specialist services, bring new physician access points to urban and rural areas, and leverage the latest in technology and sophisticated referral protocols to help meet members care needs. 

Looking at North Carolina’s 2018 RFP

We can look at North Carolina’s August 2018 RFP as an example of how innovation is crucial to securing and expanding contracts. Within the RFP, only 30% weighted on experience and qualifications vs 70% weighted on scope of services offered by the plan. 

Proposal evaluation criteria included the following measures:

a) Develop coordinated programs and services that deliver health through whole-person care, comprehensive care management, improve population health, and provide programs and services addressing healthy opportunities.

b) Develop and maintain a robust provider network that maintains strong provider and community participation and demonstrates an understanding of the health needs of the North Carolina population to ensure available, accessible, high quality care and services are delivered to all Members.

c) Promote and monitor North Carolina’s Medicaid Managed Care sustainability by developing the processes, standards, and data protocols needed to demonstrate good financial stewardship of limited resources and adherence to financial management objectives.

From Section 1 – Scope of Services document:


  1. The PHP shall provide services via telemedicine to Medicaid and NC Health Choice Members as an alternative service delivery model in compliance with all state and federal laws, including the Health Insurance Portability and Accountability Act (HIPAA) and record retention requirements. The services provided via telemedicine shall be provided in an amount, duration and scope no less than the amount, duration, and scope for the same services furnished to beneficiaries under the Medicaid Fee-for-Service program. 42 C.F.R. § 438.210(a)(2).
  2. The PHP may use telemedicine as a tool for facilitating access to needed services in a clinically appropriate manner that are not available within the PHP’s network.
  3. The PHP shall not require a Member to seek the services through telemedicine and must allow the Member to access a face-to-face service through an out-of-network provider, if the Member requests.
  4. As part of the UM Program Policy, the PHP shall develop and submit a Telemedicine Coverage Policy to the Department.
    1. The Telemedicine Coverage Policy shall include:
      1. 1.Eligible providers who may perform telemedicine;
      2. 2.Telemedicine modalities covered by the PHP;
      3. 3.Telemedicine modalities not covered by the PHP;
      4. 4.Requirements for and limitations on coverage;
      5. 5.Description of each covered modality, including:
        1. Evidence base;
        2. Compliance with local, state, and federal laws, including HIPAA; and
        3. Process to ensure security of protected health information.
    2. Reimbursement mechanism (ie, flow of funds from PHP to all relevant providers and facilities) for each covered modality; and
    3. Billing guidance for providers. PHP shall submit a revised Telemedicine Policy to the Department whenever there is a material change to the Policy.
  1. The PHP shall pay at least the in-person rate for the same service delivered via telemedicine (ie, payment parity).
  2. For all consultations that include two-way, real-time interactive audio and video communication, the PHP shall reimburse for a facility fee at the originating site when the originating site is a Medicaid-enrolled provider.
  3. The PHP shall pilot new approaches to telemedicine and value-based payment and shall support providers in optimizing the use of telemedicine in their practices.
  4. [For purposes of any telemedicine pilot, the PHP may propose, for the Department’s review and approval, a waiver of telemedicine payment parity requirements.]

Telemedicine Services:

  1. The PHP may use telemedicine as a tool for facilitating access to needed services in a clinically appropriate manner that are not available within the PHP’s network and in accordance with the PHP Telemedicine Coverage Policy.
  2. [PHPs shall be permitted to leverage telemedicine in their Request for Exception to the Department’s network adequacy standards, as appropriate.]
  3. PHP shall not require a Member to seek the services through telemedicine and must allow the Member to access a face-to-face service through an out-of-network provider, if the Member requests.
  4. Access to telemedicine providers does not count toward meeting network adequacy standards, unless approved as part of an exception to Network requirements.

MCOs must solidify programs to distinguish themselves as re-procurement approaches. 

As many contracts are lost over matters of 1 to 2 points, innovation is a key category and can mean the difference between winning and losing a contract worth hundreds of millions of dollars. North Carolina’s RFP shows us the emphasis in which innovative solutions are expected. 

Access is a top issue where states are seeking resources to improve and an eConsult solution can immediately transform access as well as quality and cost metrics. The adoption of an eConsult platform is the commitment to stewarding resources in order to achieve value-based goals that state Medicaid plans are looking for to best serve their patient populations. The time to innovate is now — and failing to stay ahead of the curve could cost plans millions. 

Michael Scarbrough is a board member of AristaMD.

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.