September 21st, 2011

Pennsylvania may be about to try a new strategy for Medicaid recipients:  paying them (sometimes up to $200) to visit higher quality and lower cost doctors and hospitals.

The Kaiser Health News blog has the details:

Gary Alexander, the state’s Medicaid director, said his agency hopes to launch the plan by early next year in an effort to help control rising expenses in the $30 billion program.

“We are looking at a model to save hundreds of millions of dollars by steering Medicaid beneficiaries to the most cost effective settings,” Alexander told about 300 health insurance executives last week at a meeting in Washington. “To reward beneficiaries we would give them some incentive… so if the state saves $1,000 on a medical procedure we may give the beneficiary $100 or $200 as a reward.”

After his talk at a conference sponsored by the industry group America’s Health Insurance Plans, Alexander told KHN that his incentive plan would initially be targeted to the nearly 1 million Medicaid recipients still in the traditional fee-for-service Medicaid program. Later, he said, it could be expanded to the more than 1.2 million in private Medicaid managed care plans.

Alexander said he does not believe the state would need to get approval from the federal government for the incentive program, although other Medicaid officials disagree.