Is Medicaid Managed Care the New Value-Based Care Frontier?

Penetration of value-based care (VBC) initiatives in Medicaid, particularly those that are risk-based, has historically lagged the more significant growth in VBC within the Medicare Advantage (MA) population. However, as Medicaid Managed Care plans (MCOs) and states face cost pressures while aiming to improve outcomes and increase access, there has been an increasing shift away from fee-for-service reimbursement models tied to volume and towards alternative payment models (APMs) that more closely tie reimbursement to outcomes and align incentives by gradually encouraging providers to take on more risk.

As a result, there is growing interest among a diverse group of stakeholders including investors, providers, MCOs, and healthcare technology companies in pursuing new revenue opportunities within Medicaid VBC. Programs that effectively realign incentives to prioritize outcomes and value can generate savings for states and MCOs and lead to improvement in the overall quality of care for patients. Herein we address opportunities for VBC for the Medicaid population, identify major challenges facing stakeholders, and examine differences between states that may facilitate greater adoption and success. The PDF is only available in English.