Jan, 28, 2022

Stratifying Data and Implementing Financial Incentives: How States Are Leveraging Medicaid Managed Care to Further Health Equity

Rachel Isaacson, Mary Beth Dyer and Erin Taylor, Bailit Health

To support state efforts, State Health and Value Strategies continues to update the resource Medicaid Managed Care Contract Language: Health Disparities and Health Equity. This compendium provides Medicaid agencies with examples of how different states are leveraging their managed care programs, inclusive of contracts, quality initiatives, and procurement processes, to promote health equity and address health disparities. Medicaid plays a central role in providing health care coverage to groups that have been economically and socially marginalized. Many states are turning their attention to their managed care programs to address persistent health disparities and the conditions that create health inequities for Medicaid enrollees.

This latest version incorporates updated information from Medicaid managed care procurements and model contracts in Michigan, North Carolina, Ohio, Oregon, Virginia, and Washington, as well as new excerpts of relevant language from Pennsylvania and Rhode Island. Many states are directing their Medicaid managed care organizations to:

  1. Stratify data to identify health disparities. In Washington, managed care organizations (MCOs) are required participate in a Health Care Disparities Workgroup aimed at reducing racial/ethnic health disparities on a specified quality measure. MCOs collect data on race, ethnicity, and language, work with the Department of Health to analyze measure performance, and implement and evaluate interventions to reduce disparities.
  2. Implement financial incentives to promote health equity. Pennsylvania’s maternity care bundled payment offers participating network providers financial incentives for meeting established quality performance targets for Black members. Incentives are earned based on providers’ quality performance on specific Healthcare Effectiveness Data and Information Set (HEDIS) measures.
  3. Report on health disparities and strategies to promote health equity. Oregon’s Coordinated Care Organizations (CCOs) are required to develop a Health Equity Plan to address cultural, socioeconomic, racial, and geographic health disparities. In the Health Equity Plan, CCOs must describe their strategy to address health disparities, engage the community in a meaningful way, and implement organizational and provider training on cultural responsiveness and implicit bias, among additional requirements.

The compendium also contains examples of recent Medicaid managed care procurement questions related to health equity and disparities reduction from Rhode Island. In the procurement, Medicaid managed care respondents were asked to describe their approach to:  

  1. Promoting diversity, equity, and inclusion within their organization
  2. Identifying and mitigating racial/ethnic disparities within their Medicaid membership
  3. Collecting data on race, ethnicity, language, and disability, and using this data to inform their provision of culturally and linguistically appropriate care.

SHVS will continue to monitor Medicaid managed care programs for innovative approaches related to improving equity and addressing health disparities.