States are inking big contracts with contractors promising to help remove masses of people from their Medicaid rolls for the first time in two-and-a-half years.
Outsourcing regulatory and administrative work is common and can reduce the burden on government agencies. For contractors such as Maximus, Public Consulting Group and Automated Health Systems, a Medicaid redeterminations process that the Health and Human Services Department projects will disenroll 15 million beneficiaries is good business.
“There's an opportunity for organizations to provide services for state Medicaid agencies that get them in the door,” said Paul Schuhmacher, managing director at Aarete, a consulting firm not under contract to work on Medicaid redeterminations. “It may lead to other work for them.”
States are confronting a massive endeavor on a scale unlike anything previously attempted. In response to the COVID-19 pandemic, Congress and then-President Donald Trump enacted a law in 2020 offering states extra Medicaid funding. In exchange, states had to agree not to undertake their normal eligibility reviews to remove enrollees who no longer qualified for Medicaid because, for instance, their incomes rose. This contributed to an approximately 30% increase in the Medicaid population, which the Kaiser Family Foundation estimates reached 95 million people last month.
But with President Joe Biden allowing the federal public health emergency declaration to end May 11, and with states free to resume Medicaid redeterminations as of April 1 under a law enacted this year, regulators and their private sector partners will be scrambling for months to trim the rolls.
Most state Medicaid agencies will rely on consulting, staffing and technology companies during redeterminations, said Kate McEvoy, executive director of the National Association of Medicaid Directors, which represents state officials.
“It really is about building out capacity,” she said. “In some cases, these functions can just be efficiently handled from a volume standpoint by a private vendor."
Ohio, for example, inked a $35 million contract with Public Consulting Group to identify potentially ineligible people. The Ohio Department of Medicaid and Public Consulting Group did not respond to interview requests. An estimated 534,000 Ohioans will lose Medicaid benefits once the state completes its eligibility checks, according to a Modern Healthcare analysis.
Tennessee signed a $96 million agreement with Automated Health Systems for call center and document processing, using $24 million in state money and $72 million in federal funds. Automated Health Systems did not respond to an interview request.
Additionally, the Volunteer State will tap an existing contract the Department of Finance and Administration holds with staffing firm Covendis, and aims to award a separate grant to an outside marketing vendor, a spokesperson for TennCare, the state's Medicaid program, said in an email. More than 240,000 residents are set to lose coverage during redeterminations, per data Modern Healthcare analyzed.