HIT Managed Care White Paper 1
Leveraging Health Information Technology to Improve Managed Care Contracting Outcomes

Medicaid Disproportionate Share Hospital (DSH)

January 2019

Over the last decade there has been a proliferation of the use of managed care in the Medicaid environment, driven primarily by the need for states to have more predictable costs, as well as a need to improve health outcomes through more effective case management and appropriate utilization.

At the same time technological advances, health IT, data, and advanced analytics have opened up new possibilities for better coordination of care, medical decision-making, quality improvement, care management, program management, and in some cases, reductions in cost.

So, how can we leverage  health IT, VBP strategies, and social determinants of health data to drive positive population health outcomes in managed care environments?

Value-based Purchasing for Managed Care


The traditional Medicaid health system is based on volume driven reimbursement where providers have a financial incentive to provide more services.  This environment contributes to increased Medicaid costs, but not necessarily improved beneficiary health outcomes. In recent years, the Centers for Medicare & Medicaid Services (CMS) and numerous state Medicaid programs have advanced reimbursement models that emphasize value over volume by introducing accountability that links payment to improved health care quality or outcomes. In fact, CMS’ goal is to move Medicare, Medicaid, and even commercial markets to a system where payment is predominantly tied to quality and value.

States have implemented VBP models either directly with providers or by requiring managed care entities (MCE) to implement them within their provider networks based on contractual quality and cost requirements.   States use a variety of approaches that range significantly in terms of the extent of risk placed on the MCE and/or providers.

In the right situation, the implementation of a VBP initiative can be an effective way to further promote the delivery of better care, improved beneficiary health outcomes, and a reduced trend in program costs for a managed care plan.

The Role of Health Information Technology

Reliance on health IT is ever-changing but one thing is clear, it is a necessity. Health IT is required to deliver timely access to reliable data at the point of care for appropriate medical decision-making.  Program managers need health IT to deliver reliable data to make informed-decisions regarding utilization, access, quality improvement, and financial management.  Finally, program executives and other stakeholders need health IT to deliver reliable data to establish overall objectives and inform policy decisions on population health, enrollment, coverage options, program development, budgets and forecasts, and other key decisions.

Things to Consider

If you are considering a VBP program, it is important to evaluate your ability to effectively manage, monitor, and evaluate the initiative.  Health IT systems that access and aggregate data from multiple sources, some of which may be outside of the typical domain, is a prerequisite for any program.

Here are a few considerations and suggestions to keep in mind:

  • Start with an updated and visionary State Medicaid Health Information Technology Plan (SMHP).
  • Require MCEs to contract with the HIE to share health data. Include data from subcontractors who are providing access to covered services.
  • Require MCEs to receive and act upon event notification (e.g. Admit, Discharge and Transfers [ADTs]) in a specific way or timeframe. Examples may include number of days to initiate a utilization management (UM) case.
  • Sustainability and financing.
    • Consider requiring MCE connection fees to support long term HIE sustainability.
    • Leverage 90/10 funding for provider onboarding.
  • Leverage the HIE to create patient empowerment tools that are adaptive to the current and future needs and/or conditions of the MCE enrollee.
  • Leverage the HIE to validate population health outcomes and conduct program integrity activities without the need for chart abstraction.
  • Advance MITA 3.0 for care management by establishing interoperable connections to replace highly manual paper-driven processes with standardized and automated business rules to improve access to case and population health management.

For more information and recommendations, please read our white paper. 

This invaluable resource offers realistic strategies to leverage the meaningful use of health IT, VBP strategies, and social determinants of health data to drive positive population health outcomes in your managed care environment.