Managed care models generated $7B in Medicaid savings in 2016, study finds

Capitation spending reflected 48.9 percent of national Medicaid expenditures in 2016 and is projected to become the dominant Medicaid expenditure in the future, according to a recent Association for Community Affiliated Plans report.

On behalf of ACAP, Arlington, Va.-based healthcare consulting firm The Menges Group estimated Medicaid savings under a capitated coordinated care model. The firm predicts Medicaid managed care organizations fueled $7.1 billion in national Medicaid savings in 2016. This assumes Medicaid MCO provider unit prices are on par in the aggregate to Medicaid fee-for-service levels, the report states.

The estimated savings accounts for a 2.6 percent of savings on all funds paid through capitation. The Menges Group estimates the national savings from MCOs will total $94.4 billion throughout 2017 to 2026.

If all fee-for-service expenditures transitioned to capitated spending in 2017, an additional $63.2 billion in savings would be added during the 10-year period, the study states.

For the full report, click here

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