ABSTRACT
Health care providers have shown a growing concern over trends and transitions in the Medicaid programs nationally as capitation has proven to be the reimbursement methodology of choice, thereby transferring risk to the providers. Imagine, if you want to win the proposal in a competitive bid process, you need to be competitive as to price. One way to do this would be to lowball the proposal and then deal with the aftermath of low provider reimbursement on a fee-for-service basis and pay strict attention to utilization, if possible. The other way to bring in the deal within budget is to capitate the reimbursement to providers and transfer the risk of the cost of care to the providers after carving out whatever you need as a company to operate the plan and carve your profit off the top. (I have never been accused of being a politician!) It is the latter than I have more frequently witnessed as a consultant to many provider groups entertaining participation agreements for the provision of managed Medicaid services in different states.
