GAO: Staff shortages, social factors barriers to treating high-cost Medicaid beneficiaries

Social determinants of health such as housing and transportation instability are complicating states' efforts to rein in high-cost Medicaid beneficiaries, a federal watchdog finds. (Getty/designer491)

Social determinants of health such as a lack of stable transportation or housing are making it difficult for states and managed care organizations to treat the most expensive Medicaid beneficiaries, a federal watchdog found.

A report released Monday from the Government Accountability Office (GAO) found that states are turning to managed care to contain costs for high-expenditure Medicaid beneficiaries but face roadblocks with social determinants of health. The report comes as managed care plans have called for the federal government to do more to help plans and states combat such factors.

GAO produced the report at Congress’ request to explore the best way to handle high-cost beneficiaries. A previous GAO report found that from 2009 to 2011, the most expensive 5% of Medicaid beneficiaries made up nearly half of the program’s overall spending.

“These high-expenditure beneficiaries are an extremely diverse population with varying needs,” GAO said in the Monday report (PDF).

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GAO reached out to seven states—Indiana, Nevada, Pennsylvania, South Carolina, South Dakota, Vermont and Washington—that were able to identify and predict high-cost beneficiaries through statistics and risk scores. The GAO also spoke with five managed care organizations.

Each of the states told GAO they used care management, which coordinates care across different providers, to rein in high-cost beneficiaries. More than two-thirds of all Medicaid beneficiaries get most or all of their care from a managed care organization, according to data from think tank Kaiser Family Foundation.

But the states reported major hurdles with implementing care management for some high-cost beneficiaries. These include a lack of valid contact information, including if a beneficiary is homeless or relies on a cellphone with limited minutes. Some ways states try to address this problem is to use email, which the states told GAO is “more consistent than physical addresses.”

Another problem was social determinants of health that range from a lack of transportation to doctor appointments to inconsistent access to food or housing. Many Medicaid managed care organizations include provisions on social determinants of health, but states and the Centers for Medicare & Medicaid Services can do more to clarify how to address them, according to a 2018 report from the Association of Community Affiliated Plans.

Care management can also be derailed by staff shortages in rural areas.

“Officials with one state Medicaid agency’s health home program said there was a shortage of individuals in rural areas willing to provide care management to high-expenditure beneficiaries,” the report said. “(Managed care organization) officials in another state said their ability to care for beneficiaries in rural areas was also affected by a shortage of care managers.”

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Some states have taken other strategies besides managed care to rein in pricey beneficiaries.

For instance, Nevada added payment incentives for its managed care organizations to rein in costs and if they performed well on certain measures such as immunization rates. But state officials had problems measuring these outcomes, making the incentive program hard to administer.

Indiana implemented a program to curb overuse of healthcare services by high-cost beneficiaries who may be engaged in doctor or pharmacy shopping. If other efforts to rein in the beneficiary’s overuse fail, then they are locked into a single pharmacy, doctor and hospital.

“Officials said that this program has helped to ensure that the provider is aware of the beneficiary’s history and has proven effective in getting beneficiaries to change their behavior,” the GAO report said.