Medicaid network challenges and provider shortages

How hard is it to build an adequate network?

As a Medicaid health plan, one of the foundational components of your success is the strength of your network.  In addition to the impact on member care that a weak provider network can have, there are federal requirements you must comply with. Without getting into too much regulatory detail, one of the more basic requirements in federal Medicaid law is that you have at least 1 pcp for every 3,500 members. There are other requirements around specialists, time and distance and in some states, languages spoken at provider practices.

There are 2 major factors working against your goal of a robust network:

  • Overall healthcare provider shortages
  • A large portion of doctors refuse to accept Medicaid patients

Let’s talk about the overall healthcare provider shortage.

There has been a shortage of many types of doctors (and nurses) for a long time. Take for example this quote from “America is running out of OB-GYNs”

“According to the Association of American Medical Colleges (AAMC), unless something changes rapidly, there will be a shortage of 45,000 primary care doctors in the United States (as well as a shortfall of 46,000 specialists) by 2020.”

The same study shows that 20% of Americans live in a place that doesn’t have enough primary care doctors (let alone specialists).

What are contributing factors in not being able to recruit and maintain Medicaid providers?   

MCOs generally report challenges in getting providers to contract for their Medicaid members.

Even if a general provider shortage was the only challenge in signing up doctors for your Medicaid plan, there are various other reasons providers choose to not join a Medicaid network.


Most Medicaid plans report difficulties in provider availability as they are becoming increasingly more difficult to recruit and a larger number are refusing to accept Medicaid patients.

There are many reasons its harder to get a provider in your network. Here are just a few:

  • Many face rising costs. Taking on Medicaid beneficiaries could add further financial strain for them. Physicians have begun to reduce their Medicaid patient load as their overhead costs climb in all areas.
  • Medicaid has lower reimbursement rates – depending upon the procedure, the rate may only cover a small percentage of the cost of the procedure.
  • Medicaid often has extensive prior authorization requirements and other administrative burdens, like getting certified to provide care to Medicaid beneficiaries.

What are states and CMS doing about MCO network quality?

Issues related to provider network quality have been known for a long time. Recently, there are efforts to tackles the problem from a data perspective.

This is all part of a larger push by CMS to improve all Medicare and Medicaid data. On the Medicare side, audits of provider directory accuracy have led to planned reviews of Medicare Advantage (MA) plans. According to one study, CMS plans to review a third of MA plans for provider directory accuracy moving forward.[1]

Some states like NY and MO tie payments to the strength of your network as part of an overall quality incentive program. The example below is performance data from the NY MCO quality system. It rates plans on clinical measures like well-child visits, but also on measures related to their provider network:

Source: NY 2018 QARR reporting for Medicaid plans,

What can MCOs and states do to improve network strength?

MCOs and states have several options. Lessons learned from other MCOs include:

  • Entice providers to participate using a loan forgiveness provision for doctors who agree to practice in rural and underserved areas
  • Require Medicaid participation to operate commercial business in the state. In the past, Minnesota linked participation in their Medicaid program to participation in their commercial business. The state also implemented a policy that required physicians and other providers to have an active caseload of Medicaid patients if they wanted other state business, such as the ability to treat public employees.
  • Reduce the overwhelming administrative burden on physicians. In 2016 the American Medical Association (AMA) released a report naming administrative burden, stress and lack of time as the top-three challenges facing physicians’ burnout and dissatisfaction.  Working toward solutions to lessen administrative burdens would positively impact providers.

Get help with your network today

There are many opportunities to streamline the technology used to operate Medicaid provider networks. Surveys of physicians and plans consistently show outdated processes and technology for keeping provider directory information accurate and current. For example, 38% of practices still use fax machines to send updates to plans. And most (67%) physicians want a single interface to send updates to all the different plans they work with. Most Medicaid plans view an updated, real-time provider directory for members as a top strategy for improving member access. 52% of MCOs use (or plan to use) secret shopper calls to make sure their systems show actual provider availability.

Here at Paragon, we make the technology part easy. Reach out today to find out how our provider data management solutions can improve the performance of your network.

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