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Mercer has been partnering with states and other stakeholder organizations for over 34 years to support health care programs for the low-income and most vulnerable populations in this country. We continue to face an unprecedented environment of uncertainty and change in the Medicaid and CHIP programs, and yet, there is a need to keep moving forward. Please take a minute to read these five insightful articles as we help you with what comes next.
Article 1

Reactions to CMS' Proposed Regulatory Changes

The year ended with proposed changes to the Medicaid and CHIP managed care regulations that were last updated in 2016. CMS, learning from its previous implementation and taking feedback from their state partners...

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Article 2

What’s Trending: The PBM Spread

As the cost of the pharmacy benefit continues to climb, a curious counter-narrative is appearing among advocacy groups, pharmacy associations and state houses.

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Article 3

Key Elements of a Successful Project

Project managers must plan for and manage project implementations with clear objectives, an effective management strategy, and a process for clear and timely...

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Article 4

Incident Prevention, Identification and Management Opportunities

Last year’s Joint Report from OIG, OCR and ACL on Incident Management highlighted the findings of two different OIG reviews if state operated programs where ...

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Article 5

MHPAEA: How to Decrease the Cost and Burden of Parity Analysis

Substantial state and managed care resources are expended to analyze parity compliance for Non-Quantitative Treatment Limits. Fortunately, the NQTL Information...

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Actuarial Case Study

As state-managed care programs have become reliant on managed care financial and encounter data as sources for rate-setting calculations, questions have been raised as to how the resulting rates reflect the concept of value-based purchasing, which is a key tenet of many states’ purchasing strategies. To address these concerns, Mercer has performed medical efficiency analyses, using program encounter data, when developing Medicaid managed care capitation rates. MCO historical data are used as a base. If the historical MCO program experience contains evidence of inefficient medical management, efficiency adjustments are used to set appropriate rates. This approach ensures that using MCO historical experience does not result in cost-plus rate-setting. State Medicaid programs can demand optimal and achievable value from their contracted MCOs.
The Challenge

The Challenge

As one of the largest groups of health care purchasers, states play an important role in identifying opportunities for implementing successful cost-containment strategies and enhancing efficiencies in the delivery of care.

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Actuarial Case Study

Mercer Action Taken

Based on industry best practices and supporting literature, Mercer developed a data-analytic procedure to identify low to moderate acuity diagnosis codes that could potentially be avoided. Mercer’s PPA analysis identifies inpatient admissions.

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The Result


As a result of these clinically informed, data-driven analyses, Mercer actuaries have incorporated medical efficiency adjustments into the development of actuarially sound capitation rate ranges. These adjustments, based on sound clinical input...

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Final Rule

Mercer's First Look

CMS has released the first major update to Medicaid managed care regulations since 2002. Mercer shared our initial reaction to the rule and addressed state feedback and questions.

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Full Review

Quality, Access, MLTSS

We shared our conceptual framework weaving together the various dependencies between the requirements that focus on quality, external quality review, access and network adequacy and the implications.

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Substance Use

Medicaid and SUDs

Mercer discussed the relationship between Medicaid and Substance Use Disorders, the key partnerships and strategies for success.

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Medicaid's Final Rule

Mercer presented information to help state officials prepare for the final Medicaid MHPAEA rule by sharing lessons learned from our experience on the commercial side.

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Substance Use Disorders

Mercer understands states must consider cost containment and program sustainability, network development and capacity needs and how to incentivize high-quality performance through effective procurement and contracting. States must consider how they will finance these services and understand the regulatory requirements of funding streams. Requirements related to the Mental Health Parity and Addiction Equity Act (MHPAEA) final rule, the Home and Community-Based Services (HCBS) final rule and the Medicaid Managed Care final rule all impact the design and implementation of a state’s SUD service system.

Mercer assists states in SUD program design, development of federal state plan amendments and CMS waivers, procurement activities, actuarial rate setting and analysis, managed care contracting, value-based purchasing, staff training and development, and conversion from fee-for-service to a managed care delivery system.


Case Study


Prior to 2011, the state’s Medicaid program did not include SUD treatment services as a covered benefit. State general funds and/or federal block grant dollars were the primary source of funding to pay for SUD services to Medicaid-eligible members. In an effort to contain costs while also expanding access to SUD services for Medicaid-eligible members, the state decided to add SUD benefits to its Medicaid state plan and incorporate these benefits into its managed care structure.


The state wanted to expand coverage and capacity for an array of ASAM levels of care and support adoption of medication-assisted treatment. The state wanted to support providers and managed care organizations in this transition by helping them fully understand service definitions, provider qualifications and billing expectations. The state also recognized the need to gather current SUD program and staffing information from providers in order to assist in provider reimbursement and capitation rate development.

Read about the ACTION taken and the result