States Must Support Safety-Net Providers, Hard-hit by COVID-19

As has been widely reported, the COVID-19 pandemic has caused a significant decline in the utilization of health care services and corresponding provider revenues. These revenue declines have hit safety-net providers particularly hard, as these providers typically have smaller operating margins. While also affected, provider entities that receive a larger share of revenues from Medicare and commercial payers, who generally pay higher-than-Medicaid rates, have more significant reserves to fall back on.It is critical that states take action to keep their safety-net providers afloat during the pandemic. These providers need to continue to offer in-person services where appropriate and telehealth services whenever possible so that they are available to continue serving Medicaid enrollees when the pandemic subsides.For states with Medicaid managed care systems, it is the managed care organizations (MCOs), not the states, that have incurred the savings from declining utilization during the pandemic. Although states with managed care programs do not have direct access to these savings, there are policy mechanisms available to states to support the use of these savings to support safety-net providers. For states with fee-for-service delivery systems, the decline in utilization coincides with a decline in claims for payment, theoretically freeing up dollars to support safety-net providers.I discuss these policy mechanisms and the imperative to support safety-net providers during this time in a recent piece in Health Affairs, which I co-authored with Professors Jacob Wallace and Timothy J. Layton, of the Yale School of Public Health and Harvard Medical School, respectively.Paying Their Fair Share: States Should Require Increased Medicaid Health Plan Payments To Support Safety-Net Providers In The Age Of COVID-19