The impact of Medicaid expansion, diversity and the ACA primary care fee bump on the performance of Medicaid managed care

In response to the policy changes to Medicaid, this research examines the impact of Medicaid expansion, diversity, and the Medicaid fee bump on Medicaid managed care. It aims to provide insights to health insurers, consumers, regulators and policymakers regarding profitability, better services, reducing expenses and improving efficiency. The results indicate that Medicaid expansion increases the profit efficiency of Medicaid managed care, but it has no significant impact on medical service efficiency or composite efficiency. The diversity of business lines, product types or payment methods does not create economies of scope for Medicaid profitability, medical service efficiency or composite efficiency. However, the diversity of product types is associated with more ambulatory encounters, while the diversity of payment methods reduces medical and administrative expenses. The Medicaid fee bump does not increase medical expenses or the utilization of medical services, and it has no significant impact on profitability or composite efficiency. "Medicaid lower reimbursement" should not be a big concern for Medicaid managed care in terms of profitability, medical services, expenses or overall efficiency. Another finding was that offering more preferred provider organization (PPO) plans improves the performance in profits, services and expenses; and managed care organizations (MCOs) also serving Medicare beneficiaries perform better in Medicaid managed care. In addition, capitation and contractual fee payments both enhance composite efficiency. The value-based payments do not have a significant impact on expenses or efficiency, but they are associated with more ambulatory encounters.