The NCSL Blog


By Lisa Waugh

We can rest assured that states will always be looking for ways to reduce Medicaid spending.

Stethescope on stack of $50 billsAs states track potential cost saving innovations, success stories emerge!  Others can learn from specific programs that are beginning to show savings based on analysis of spending data.

Here are five programs with cost savings estimates, and links to source material:

5. Montana’s Third Party Administrator

  • Montana’s Health and Economic Livelihood Partnership (HELP) Program uses a third-party administrator (TPA)—Montana is the first state in the country to expand Medicaid using a private TPA arrangement.  Read Montana’s description of HELP Plan coverage and payments and reports on the HELP program.
  • Further analysis will show whether savings were associated with the transition to the TPA program.

4. Vermont’s Hub and Spoke Initiative for Opioid Addiction

The Hub and Spoke statewide initiative started in 2012 to expand Medication Assisted Treatment (MAT) capacity – through the following mechanisms: Hubs, which refer to regional specialty addiction treatment clinics and Spokes, which refer to primary care providers trained in MAT.

  • Medicaid access to MAT has increased more than 150 percent since 2012, from 2,300 served to just fewer than 6,000 served.
  • Savings to the Medicaid program are estimated at $3,100 per person/per year; with additional savings when costs in child welfare and criminal justice programs are avoided.

3. Minnesota’s Workforce Innovation

  • Minnesota has focused on addressing workforce shortages through midlevel providers:
  • The state has expanded the number of training programs for nurse practitioners, physician assistants and dental therapists.
  • Through midlevel providers, the state has created opportunities for expanding a culturally diverse workforce in ethnically diverse settings.
  • The state has expanded Medicaid payment for community health workers and community paramedics.
  • There is a documented reduction in costs (associated with reduced ER use and other services) estimated at close to $10 million, for six healthcare systems in Minnesota.

2). New Hampshire’s All Payer Claims Data System

  • The All-Payer Claims Database (APCD) combines the medical claims data from public and commercial payers.
  • The system has the ability to aggregate service information across Medicaid and commercial payers, in order to provide comparative data. This is seen as crucial in improving the management of state Medicaid programs.
  • APCDs make it possible to compare cost and quality:
    • Compare Medicaid reimbursement rates with private sector rates.
    • Evaluate the impact of innovations such as patient cost sharing on use of services.
    • APCDs are authorized in 16 states; outlined by NCSL in Collecting Health Data: All-Payer Claims Databases.
  • Potential exists for significant cost savings and cost containment strategies, the exact figures depend on the analysis that is made possible by the APCD system.

1. Oklahoma’s Care Coordination and Transitional Care Program

  • SoonerHealth+ is a care coordination program to improve health outcomes for the aged, blind and disabled Medicaid population.
  • This is a statewide partnership that links Medicaid recipients to primary care patient-centered medical homes, including health centers and rural health clinics. The program works with people with special health care needs. Read Oklahoma’s state program description.
  • Evaluations found cost savings and improvement in utilization and quality measures – the exact cost savings are yet to be confirmed.

Lisa Waugh is a program principal in NCSL's health program.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.