States, MCOs May Be Poised to Tangle Over Medicaid Rates

Despite growing, bipartisan calls for more federal Medicaid funding to stem states’ budget shortfalls, such a provision is absent from Senate Republicans’ latest COVID-19 relief bill. And while that omission hints at the next big health care battle in Congress, experts tell AIS Health that another, quieter Medicaid funding conflict is bubbling up at the state level — over how much to pay managed care plans.

Already, there are troubling signs for Medicaid managed care organizations, which cover more than three-quarters of Medicaid beneficiaries. Nevada’s legislature recently passed a fiscal year (FY) 2021 budget — effective starting July 1, 2020 — that cuts Medicaid provider rates by 6%, a move expected to save the state $52.9 million. The cuts will have a small impact on the earnings of Nevada’s three managed care plans, which are owned by Anthem Inc., UnitedHealth Group and Centene Corp., Credit Suisse analyst A.J. Rice pointed out in a July 27 research note.

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