With the economic upheaval and unemployment brought by the coronavirus disease 2019 (COVID-19) pandemic, observers anticipate a large influx of new members into Medicaid programs. We spoke with Russ Fendley, former Medicaid commissioner for Kentucky, and Patrick Sturdivant, president of the Amerigroup Texas Medicaid plan, to find out how states and plans are preparing for this challenge and its lasting effects.

Today on MJH Life Sciences™ News Network, The American Journal of Managed Care® (AJMC®) is diving into the role of Medicaid, the insurance program for low-income individuals, in the coronavirus disease 2019 (COVID-19) crisis. With unprecedented numbers of people losing their jobs and healthcare coverage, Medicaid plans are preparing for a massive influx of beneficiaries, which will require information technology (IT) readiness, social service coordination, and of course financial resources.

We spoke with Russ Fendley, former Medicaid commissioner for Kentucky, about the financial and technology strain of COVID-19 on state Medicaid programs. He mentions the importance of communication to keep new enrollees informed about their benefits and the resources available to them. He cautions that the still-unknown aftereffects of the virus will lead to additional demand for services that will remain even after new infections level off.

We also spoke with Patrick Sturdivant, president of the Amerigroup Texas Medicaid plan, about the solutions, both new initiatives and ones that are already in place, to welcome new members into Medicaid and help them navigate the healthcare system. Key efforts include telehealth platforms, online portals, and member service coordinators who stand ready to help with healthcare needs and social determinants of health.

Stay tuned for our full conversations with Russ and Patrick.

AJMC®: Welcome to the MJH Life Sciences™ News Network. Can you introduce yourself and tell us a bit about your work?

Russ Fendley: Sure. My name is Russ Fendley, I’ve been in the healthcare field for 30 plus years running MCOs [managed care organizations], running hospitals for HCA; I was Medicaid Commissioner for the Commonwealth of Kentucky and served as a fellow with the National Governors Association and the Center for Health Transformation on public health policy and Medicaid.

AJMC®: Great. So as we’re seeing these massive job losses from COVID-19, what will be the financial strain on state Medicaid programs?

Fendley: Really, you can’t calculate it yet. It’s going to be significant. The closest thing I can come to as an analogy was, I live in Kentucky, and our experience here was when we did the Medicaid expansion, that added about 425,000 lives at about $2 billion a year in total cost. Don’t have any idea though, with this new population, we don’t know what preexisting medical conditions they have. We don’t know, if they’re joining into a managed care program, which eligibility classification they would be in, so there  would be different premiums associated with that. And we don’t know what costs would be from any COVID-19 related. So it’s hard to calculate that right now. We’re estimating, I’ve seen several estimates, about anywhere from 10 to 20 million people nationally, rough estimate, will join Medicaid. Obviously, that varies from state to state based on their employment numbers. Here in Kentucky, I can tell you we’re looking at about 300,000, 350,000 people, so it’s gonna have a significant impact.

The bigger impact though, Christina, is not just on Medicaid, it’s going to be downstream. As the state tries to balance the budget, which is a requirement, and even though the federal government’s increasing the match by 6.25%, the FMAP [Federal Medical Assistance Percentage], you’re still gonna have that gap in the current budgets, and even next year’s budget, from this medical expenditure. And they’re going to have to take from other programs to fill that gap or increase taxes, which you really can’t do when there’s severe unemployment. So you would expect there to be impacts on transportation, hopefully not but potentially education, parks, pensions. Hard to say.

AJMC®: Right. We’ve recently learned that HHS will be reimbursing hospitals for the care of uninsured patients with COVID-19. How do you think this will affect Medicaid signups?

Fendley: I don’t think it will. If it does, at least not significantly. Most of the people who are going to have or have COVID, or have become Medicaid eligible, they may have other healthcare conditions that require home health, medical physician services, so even though it’s good that they’re gonna pay the hospital portion of this, which will alleviate a big part of the burden, you’re still going to have to, the people are still going to need that medical coverage for other services, pharmaceutical services, those types of things. I don’t think it’s going to impact it.

AJMC®: Okay. What differences do you expect to see in states that expanded Medicaid compared with states that didn’t?

Fendley: What’s really going to be interesting is those that didn’t have it. There’s been such a contraction in the companies that are selling through the exchange, I don’t know what’s available. I haven’t kept up with what’s available in the exchanges now or what the cost would be. It depends on who’s going to be eligible for the income assistance through the exchange. So for those states that have expanded their Medicaid, a big chunk of those people are going to fall within that 138% of federal poverty level, it’s not going to be everybody, so you’re still going to have some that don’t meet that income criteria because your unemployment insurance counts towards your income. So we don’t know yet, but I think it’s gonna be far easier for those states that expanded Medicaid than those that did not.

AJMC®: How will an influx into Medicaid impact the programs’ IT systems and workflow?

Fendley: Way back when I was Medicaid commissioner, everything was based on these old COBOL hardwired systems. I shudder to think what it would have been like to make the changes that are being made right now to accommodate this new crisis in that old system. Most of the new systems that are that are out there now, you know, are all SAS and modular and they’re just configuration; there’s not a lot of coding that has to be done. But there’s still going to be a significant amount of change that has to be made. You can’t just implement the change, you’ve got to implement it and then test it and make sure it works right. So I know the eligibility systems are going through a major reconfiguration change for the eligibility rules that are being loosened. You know, claims payment systems are being modified. And so there’s a heavy lift there for the IT department, but it’s a much easier—and this is easy for me to say because I’m not an IT person—but it’s a much easier lift now than it would have been 15 years ago.

AJMC®What do states need to do to make sure that they can accommodate all the new Medicaid beneficiaries?

Fendley: Yeah, there’s a number of things, and most of the states I’ve talked to so far, they’ve all got access points up for their potential new enrollees, numbers to call, but it’s going to be a matter of, you’re going to have to have almost a constant line of communication with your MCOs. The providers are going to be a huge key, because a lot of eligibility comes from the hospital admission process. That’s where a lot of Medicaid enrollees wind up in the system. And then some communication back and forth, or you’ve got to have a lot of external vendors who are placed here, people who supply things to the Medicaid program. You know, call centers are going to have to be set up or running and maybe additional staff put on, so there’s going to be a lot of a lot of points of contact that are going to have to be made with these new enrollees, not only to identify, let them know what their coverage is, what their benefits are, who the providers are, what the rules and regulations are, what they should and shouldn’t do with COVID-19—there’s a lot of that kind of communication. So that’s going to be the key, just entry. Just the communication with a variety of sources, from the MCOs to the members to the providers.

AJMC®Right. Well, that’s the end of my questions. Was there anything else that you wanted to add about the situation?

Fendley: Well, you know, the one of the things that’s going to be a key going forward, we’re almost to a point in the curve now where, you know, identification of new cases is still important as if you think of COVID-19 as an accordion. I did a war game exercise with the CDC about 15 years ago on a viral pandemic like this in the United States, and it is like an accordion starting with either coast and working inward. So we’re not over by any stretch of the imagination, but people need to realize this does not end when we see the infection leveling out, because you’re going to have a lot of people with the lingering effects of this disease, far beyond their initial sickness. If they’re on a ventilator or in serious medical condition, they’re going to have lung damage, potentially heart damage, other organ issues; they’re going to have to be followed for years. So there’s going to be a lot of that, and there’s so much we don’t know about the disease yet, and what the recurrence rate is and the reinfection rate, those things we don’t know. So what people need to know is we’re only in phase 1; phase 2 will be kind of looking at how you treat the people going forward and in preparation for what we’re being told will be the next phase of the pandemic, which will be this fall, if everything’s correct in the modeling so far. So, this is not over by any stretch of the imagination. This is just, for lack of a better way of saying, this is just the end of the first beginning, and we’ve got a long way to go until we get to the point where there’s a vaccine and other ways to prevent a recurrence.

AJMC®All right. Well, thanks for taking the time to speak with us.

Fendley: Oh, you’re welcome. Thank you.

AJMC®: Stay healthy!

Fendley: Alright, thanks!


AJMC®Can you introduce yourself and tell us a bit about your work?

Patrick Sturdivant: Sure. I’m Patrick Sturdivant. I’m president and CEO of Amerigroup Texas, one of the many Anthem affiliated health plans across the country. We have the privilege to serve more than 760,000 Texans in our health plan. We started in 1996, and now we serve 230 of the 254 counties in Texas, which covers 236,000 square miles of this beautiful state.

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States, Health Plans Prepare for Influx of New Medicaid Beneficiaries Due to COVID-19 – AJMC.com Managed Markets Network