The Medicaid ecosystem has a vast array of stakeholders, including the federal government, state Medicaid agencies, patients, hospitals and delivery systems, and community based partners. Medicaid Managed Care Organizations (MCOs) are also a key player, with the vast majority of states using these entities to fund and support services to beneficiaries. As of 2022, more than 72% of Medicaid beneficiaries received their care through MCOs. As the field of health care tech has expanded, a variety of partnership models have emerged, including numerous examples of each of the stakeholders listed above directly contracting with technology companies. Through these experiences, it has become clear that MCOs are uniquely well-positioned to advance these types of partnerships for a variety of reasons. Not only do MCOs represent a way for technology companies to reach large numbers of users, but they also have financial resources and incentives to keep their members as healthy as possible. These, as well as continually evolving state and federal Medicaid requirements, mean that MCOs stand to significantly benefit from tools that help them achieve their goals.
These forces create an ideal opening for technology companies to partner with MCOs—an opening that both parties are increasingly exploring. However, as this brief explores, there are several competencies that technology companies must develop to successfully engage in these partnerships.
Recognizing the growing opportunity for tech-enabled tools to support Medicaid stakeholders, the Medicaid Innovation Collaborative (MIC), a program of Acumen America, was launched in 2021. It works with states, MCOs, consumers and technology companies to create a structured approach to identify and implement tech-enabled solutions to address Medicaid beneficiaries’ needs and improve health equity.
Our work has explored how states and MCOs think about tech-enabled solutions, what kinds of supports are needed to foster partnerships between these entities and technology companies, and what technology companies can do to successfully align with their needs. In our first showcase, launched in 2022, MIC worked with Arizona, Hawaii, and West Virginia state Medicaid agencies and MCOs to explore tech-enabled solutions in the behavioral health space. Our 2023 showcase consisted of Iowa, Kentucky, and New York state Medicaid agencies and MCOs, and focused on addressing health related social needs (HRSN) with tech-enabled solutions. Recently, with funding from the Leona M. and Harry B. Helmsley Charitable Trust and funding partners from Acumen America, MIC launched a series of pilots with this cohort designed to explore what is needed to support and scale technology company partnerships with MCOs.
One of the key observations that has emerged from supporting these states in the MIC process is that technology companies often have significant gaps in understanding how to successfully initiate and navigate partnerships with MCOs. Medicaid is a complex ecosystem with wide variations in policies, demographics, and beneficiary needs across (and even within) states. To successfully partner with MCOs and meet the needs of their members, technology companies must deeply invest in understanding the Medicaid landscape. This includes understanding MCO priorities and the forces shaping these; understanding how the program and its beneficiaries differ from commercial insurance and Medicare; being attuned to what outcomes MCOs are most interested in and what they are looking for in a collaborative relationship; and how to effectively navigate MCO contracting processes, to name only a few.
Drawing on lessons from MIC, this brief is designed to address these knowledge gaps and provide concrete guidance for how technology companies can more effectively navigate MCO partnerships.
Understand the policy landscape
A common saying in Medicaid is that “If you know one state’s Medicaid program, you know one state’s Medicaid program.” This sentiment succinctly conveys how complex and dynamic the Medicaid policy landscape is. Because the program is a federal-state partnership, states have significant latitude to tailor it in various ways to best meet their unique needs. Both federal and state policy priorities are continually evolving, and Medicaid programs reflect this. As such, it is essential that technology companies have a firm grasp of the policy contexts in which MCOs are operating, and the policy drivers that are influencing their priorities and approaches.
Here are five things to watch closely:
- Federal regulations. Issued by the Centers for Medicare and Medicaid Services (CMS), these guide what states can do through their Medicaid program, and how they can do it. For example, in 2023, CMS released regulatory guidance on how states can use Medicaid to address HRSN. These guidelines have spurred a flurry of Medicaid activity in this space, and have further elevated this topic as a high priority for many MCOs.
- Medicaid waivers. With CMS’ approval, these programs allow states to test out new approaches to care tailored to the unique needs of their populations. These new initiatives, which are often rolled out at large scale, in turn often require MCOs to provide new services, be accountable for new metrics, and serve new populations. For these reasons, waivers are one of the most significant policy mechanisms that influence MCO priorities, and therefore also the potential solutions they may be interested in exploring.)
- MCO reprocurement cycles. This is the process states use to periodically reissue their managed care contracts. States use reprocurement as an opportunity to develop new MCO requirements and to reevaluate which MCOs to contract with. MCOs may be particularly open to new innovations during reprocurement cycles, as they are natural opportunities to identify solutions that will help them meet new state contracting requirements.
- Quality measures. Both states and CMS require MCOs to report on a myriad of different measures, including process (e.g. screening for behavioral health needs), outcomes (e.g. substance use disorder treatment outcomes), utilization (e.g. emergency department visits) and clinical (e.g hypertension control rates) measures. Tech-enabled tools that help MCOs meet specific benchmarks tied to these measures may be especially appealing to MCOs.
- Payment structures. States use a variety of payment structures, such as quality withholds and shared savings, to incentivize MCOs to focus on specific aspects of their work. New Hampshire’s Medicaid program, for example, withholds 2% of MCOs’ payments and offers them an opportunity to earn this money back, along with additional bonus payments from an incentive pool if certain quality improvement, care management and behavioral health measures are reached. MCOs will see the value in companies that can demonstrate their ability to help them meet these requirements and support its bottom line.
Staying attuned to the different policy forces influencing MCO decision-making and goals will help technology companies understand how to best position themselves as effective partners to MCOs.
Understand state and MCO priorities and pain points
Above and beyond these policy levers, states and MCOs also have their own priorities, goals, and initiatives that reflect specific challenges they are encountering in their regions.
For example, all three states participating in MIC’s 2022 showcase focused on behavioral health, but had different priorities within this space. Arizona and West Virginia chose to focus on addressing adolescent behavioral health, while Hawaii chose to focus on maternal behavioral health. These different focus areas reflected the Medicaid agencies’ sense of high priority needs and gaps within their specific states, and subsequently guided the direction the respective MCOs went in with their exploration of tech-enabled solutions.
Iowa’s MIC experience is an instructive example of how MCO priorities can also drive partnerships. The state’s Medicaid agency was interested in having MCOs collectively pilot a solution, but left it up to the MCOs to decide which HRSN to focus on. After reviewing several solutions through the MIC Showcase, the MCOs ultimately coalesced around the shared pain point of non-emergency medical transportation and chose to enter into a pilot with Kaizen Health, a tech-enabled transportation solution.
MCOs are continually assessing what barriers they are facing to meeting their goals and supporting their members’ needs. Technology companies that make a point to understand what these are and how their products can help MCOs address them will stand out as having valuable partnership potential.
Understand the population
Technology companies must also have a strong understanding of the populations that MCOs serve, as this is another key driver of the types of solutions that MCOs are looking for. While each state’s Medicaid populations are distinct, there are a few truisms that apply nationally across the program. By its very nature as a health insurance program for individuals with lower incomes, a large number of Medicaid beneficiaries are impacted by HRSN, disabilities, behavioral health needs, and other complex health conditions. Medicaid populations also often experience deep health inequities due to the high number of enrollees who have lower incomes, are racial and ethnic minorities, and live in underserved communities.
Other forces that influence which populations MCOs focus on include states’ geographic makeup; their racial, ethnic, and cultural demographics; and the types and levels of health disparities beneficiaries experience. Even within a single state, there can be wide variation in who MCOs serve, as many often provide coverage only in certain regions of a state.
Understanding who MCOs serve and which subgroups within their membership are high-priority can help technology companies understand how to most effectively partner with MCOs. For example, an MCO that operates in a rural part of a state is serving a population whose needs differ in many respects from those of an MCO operating in a dense urban part of the same state. A solution aimed at this rural MCO, therefore, needs to demonstrate its ability to scale in this type of geographic setting. Similarly, MCOs that serve individuals from specific racial, ethnic, and/or cultural groups are likely to look for partners that demonstrate cultural competency and an understanding of how to effectively work with these populations. A key dimension of this is having products that can provide services in different languages. Companies that invest in translational capabilities, especially in languages that align with MCO populations, will be much more able to demonstrate their product’s relevance than those that don’t.
Policy environments can also influence the way that MCOs think about their populations, and thereby who they are looking to serve through partnerships. For example, New York’s recently approved 1115 waiver has a significant focus on improving outcomes for high-risk individuals, including those who are chronically homeless, individuals with serious mental illness, and/or substance use disorders. Knowing that they were going to be asked to focus on improving outcomes for these populations through the waiver, the New York MCOs participating in MIC used the initiative to specifically look for tech-enabled solutions designed for these types of members. This ultimately led to a piloting partnership with Samaritan, a technology company focused on supporting unstably housed individuals, and Staten Island Performing Provider System (SIPPS), Health First, and Ready Computing. The pilot is focused on addressing a variety of HRSN for underserved Health First members, including a subset with housing instability.
Having a strong grasp of factors such as differences in demographics, cultures, community resources and infrastructure, and policy forces driving focus on particular populations, will help ensure that tech-enabled solutions can effectively engage and serve the members that MCOs are focused on.
Have demonstrable outcomes in areas that matter most to MCOs
It is imperative that technology companies understand what outcomes are important to MCOs—and show results in these areas. Like any other customer, MCOs want to be confident that they are investing in a product that has a track record of success, particularly with comparable Medicaid populations and/or in partnerships with other MCOs. As previously mentioned, MCOs track and report on a variety of measures, including cost and utilization, condition-specific outcomes, access, and HEDIS measures, among others. And at least 75% of states use financial incentives tied to quality measures, including those related to behavioral health, chronic disease management, and perinatal/birth outcomes. Above and beyond these, states are also increasingly looking to MCOs to reduce health inequities and disparities, and address HRSN. Technology companies that can show demonstrable outcomes in areas that are high priority to MCOs, and especially those tied to MCOs’ financial bottom line, are well-positioned to capture MCOs’ attention.
Develop a clear pitch specifically designed for an MCO audience
Without a strong and tailored pitch, even the best products may be overlooked. MCOs do not want to feel “sold to” when learning about a product- rather, they want to clearly understand how a company can solve a key problem(s) for them. When initially meeting with MCOs, technology companies should focus on:
- Concisely and clearly explaining what the product does, and what distinguishes it from competitors. The health care tech space is a crowded one, and MCOs may have seen many other products designed to solve similar problems. Helping them understand what is unique about this particular product and what it does better than others will make for a more compelling case.
- Demonstrating impact on and alignment with MCO priorities. As described above, it is imperative that companies familiarize themselves with MCOs’ goals, priorities, and reporting requirements. Due to financial, regulatory, and mission-driven pressures, MCOs are often highly risk averse, so the more that companies can convey that they understand what matters to MCOs, and that they can generate value to MCOs and patients in terms that matter to them, the more appealing a partner they will seem.
- Focusing on outcomes, not profit. Pitching to an MCO requires a different framework than pitching to investors. MCOs are first and foremost interested in outcomes and impact, not how much revenue a company has generated. Companies that don’t make this narrative adjustment risk looking inexperienced and misaligned with MCO values.
- Conveying an understanding of Medicaid, including how working in it differs from Medicare and commercial markets. Recycling a pitch for a Medicare Advantage plan, for example, is not a recipe for success.
- Leaving out tech industry jargon to avoid coming off as out of touch with Medicaid populations and the ecosystem writ large. Instead, use language aligned with the health care industry and that can be easily understood even by people who are not technology experts.
- Being thoughtful about who to meet with. MCOs have different organizational structures, departments, and job titles. Companies should put up front time into researching contacts beyond contracting departments, and seek to understand who else might be a receptive and aligned audience for their product.
Be a partner, not just a vendor
Given the myriad of social and health challenges that many Medicaid members have, flexibility is key for MCOs. Technology companies who show they can provide this and meaningfully work alongside MCOs to optimize solutions have a greater likelihood for partnership success. This includes being committed to:
- Fostering collaborative relationships that prioritizes accessibility, communication, and joint problem-solving.
- Being willing to adapt strategies, timelines, and potentially even the product itself.
- Building in consistent opportunities for feedback from MCOs and patients.
It is also important that technology companies understand the cultural differences between their sector and the MCO space. The “move fast and break things” tech ethos is very different from that of MCOs. Oftentimes within MCOs (and the Medicaid space in general), timelines move more slowly, many people need to review and provide approval, and regulatory and compliance requirements are more stringent than in the technology sector. Similarly, as mentioned above, MCOs typically have low risk tolerances, so companies that understand these differences and are able to effectively navigate them improve their likelihood for long-term success in their MCO partnerships.
Have a demonstrated commitment to members
MCOs are mission-driven organizations committed to improving the lives of their members, and value the same in their partners. Technology companies that can show that they are in this work because it is meaningful to them, rather than just because they see it as an opportunity to make money, will resonate with MCOs. Examples of how tech companies can convey their commitment to patients include:
- Showing how their product generates value for members. While MCOs are interested in understanding how a product will help them achieve their own organizational goals, they will also take note of companies that can demonstrate the ways in which their product tangibly improves members’ lives in patient-centered ways. In the Kentucky MIC pilots, there are two examples of this with FarmboxRx, which is partnering with Passport by Molina Healthcare, and Attane Health, which is partnering with Anthem Blue Cross Blue Shield Kentucky. These pilots focus on providing nutritious food to members in culturally competent ways, demonstrating that they have prioritized the patient experience in their work.
- Focusing on addressing health inequities and disparities. Addressing health inequities and disparities is an increasingly high priority for MCOs, both for mission-driven reasons and for quality measurement ones. Companies whose products are meaningfully focused on these issues show that they are invested in member and community well-being, are conscious of designing solutions to address inequities, and also can help MCOs meet reporting requirements in this area.
- Including people from the community and with lived experience in the work. There are various ways that companies can accomplish this, including having patients serve as advisors, or even hiring individuals who represent the audience they are trying to reach with their product. There is growing recognition of the importance of this type of meaningful inclusion, and MCOs will appreciate these types of commitments from a health equity perspective.
Support community partnerships
MCOs are part of a robust health care and social service ecosystem focused on improving the health of both individuals and their communities. Because of this, MCOs often collaborate with community based organizations (CBOs) and other community partners. These partnerships are particularly important for MCOs’ efforts to address HRSN, and in many states, are even explicitly required. For example, New York has required MCOs to contract with CBOs for several years, including through its new 1115 waiver. Tech-enabled solutions that have the potential to support these types of community partnerships may especially stand out as promising partners. Examples of ways to do this include being able to:
- Strengthen existing collaborations between MCOs and CBOs. Companies that acknowledge the value of CBO partnerships and seek to enhance them, rather than replace them, are much more likely to garner trust, community support, and uptake. Strategies for strengthening these collaborations include focusing on facilitating clearer communication, data sharing and/or reporting.
- Create new opportunities to engage CBOs. For example, Kentucky’s FarmboxRx MIC pilot also involves two CBOs who will be supporting education sessions and providing childcare for participating members.
- Help MCOs scale their partnerships by building CBO capacity and capabilities. For example, New York’s SIPPS partnership leverages tools from Ready Computing and Samaritan which are used by CHWs and staff within CBOs to screen, support, and refer high needs patients to the resources they need.
Being able to add value to MCO efforts in this space would add another important dimension to a partnership with a technology company.
Understand MCO budgeting and contracting processes and timelines
Lastly, in order for technology companies to successfully navigate and cement effective partnerships, it is important that they understand the nuances of MCO budgeting and contract processes. As previously touched on, MCOs typically move at a slower pace than the tech world’s, and budgeting cycles and contracting processes are no exception. Oftentimes, MCO budgets are developed a year in advance. This means that even if MCOs are interested in partnering with a technology company, a collaboration may not get approved until the beginning of a new budgeting cycle. Contracting cycles can also take significant amounts of time to complete, for reasons including the numerous layers of review and approval that are needed to green light them.
Even once contracts are signed, depending on the nature of the collaboration, there may be several additional rounds of review and approvals needed to get things like data sharing agreements, Business Associates Agreements, security sign-offs and other types of agreements in place. Companies must be prepared to navigate these timelines effectively. To help ease this aspect of contracting, technology companies should also have a firm understanding of key regulations such as HIPAA , as well as guidelines around relevant sensitive services (e.g. mental health and psychiatric services, reproductive health, etc.), and privacy and security compliance, among others.
Technology companies should also build their savvy around the different types of contracting arrangements MCOs may be interested in. Value-based contracts, for example, which tie payment to outcomes rather than volume, are becoming increasingly common given the overall push towards this approach in health care writ large. Similarly, although being approved as a contracted provider may offer technology companies more long-term financial stability, this process can take significantly longer than getting approved as a vendor. Because of this, getting a foot in the door as an approved vendor may be a good strategic first step that can eventually pave the way for companies to explore becoming contracted providers.
Understanding these cycles and anticipating the potential challenges that can emerge during this phase of the work will help ensure that technology companies can effectively navigate this “last mile” of finalizing a partnership, and pave the way for smoothly kicking off the work.
As MIC has demonstrated, there is growing interest among Medicaid stakeholders in adding tech-enabled tools to their suite of approaches to improving members’ health. The recently-launched MIC pilots are a prime example of the appetite among states and MCOs to explore this space further. While Medicaid is a complex universe to navigate, technology companies who invest in understanding the ins and outs of it will be positioned to navigate partnership conversations and collaborations more skillfully. The strategies listed here can provide companies with guidance on what skills and competencies to build in order to maximize successful partnerships, and highlight key areas that they should focus on to ensure smooth collaboration.
Veenu Aulakh also contributed to this report.
