Article archive / March 1, 2016
Originally published: . Volume 7, No. 3. Source pages: 5.
Medicaid Audit Says Bayou Health Program is Saving $$
In a February 18 report of the state Medicaid program, reviewing data from February 2015 to January 2016, the Wakely Consulting Group estimated that rates paid to the new Bayou Health Managed Care Organizations were 6.7 percent to 11.2 percent lower than if the Department of Health and Hospitals had served the same people in a fee- for-service program, such as the previous program. The amounts of savings were estimated to be from $250 million to $437 million, said Wakely.
Estimated savings were calculated by comparing capitation payments from DHH for the Bayou Health prepaid population to estimated costs for that same population if they had been enrolled in the fee-for- service program.
Using various assumptions and formulas, the economists at Wakely estimated that the managed care organizations used $3,453,271,000 for the 2015 period and compared this figure to the estimated fee-for-service costs of $3,702,886,000. This indicated a savings of at least $249,615,000.
In the Executive Summary, authors noted, “This report compares MCO capitation rates to estimated costs for those same members if they had been covered by traditional FFS Medicaid. Managed care organizations achieve programmatic savings by promoting efficient use of the health care system and eliminating wasteful or inefficient spending by placing an emphasis on preventative care, managing chronic patients, and detecting and treating serious illnesses early. To develop comparable FFS costs for 2015, we used rate setting information underlying the 20131 and 2015 capitation rates.”
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