NovuHealth CEO Tom Wicka discusses the future of CHIP and how the upcoming funding shortfalls are already impacting 2018 consumer engagement strategies.
As Congress continues to debate the future of the Children’s Health Insurance Program (CHIP) this week, health leaders are working to address consumer concerns and adapt to potential policy changes for the sake of their bottom lines.
CHIP, which supplies health insurance to an estimated 9 million low-income children, accounts for a significant portion of the overall Medicaid population. Congress failed to reauthorize federal funding to the program on October 1, but lawmakers did authorize $2.85 billion last month as part of a continuing resolution to keep the federal government operating through January 19.
A new deal still had not been reached, however, as of Wednesday afternoon to either extend the continuing resolution or provide CHIP with long-term funding, leaving nearly a dozen states at risk of exhausting federal funds by the end of next month and millions of children without health coverage.
Tom Wicka is CEO of NovuHealth, a customer engagement company based in Minneapolis, Minnesota, which deals primarily with Medicaid and Medicare population pools. The company assists companies in crafting health plans with engagement strategies for what Wicka calls “tough populations and tough conditions.”
The four-month stalemate over funding CHIP has affected NovuHealth’s operations, reducing the size of a population to which the company regularly caters. However, Wicka said the expenses incurred by CHIP enrollees are relatively low compared to the population’s size, constituting 50% of the Medicaid population while only consuming 20% of its overall costs.
Wicka said the CHIP funding impasse has cut into NovuHealth's operations in two key ways.
“We believe it shrinks our population and will have a negative impact, but we think the political and legislative discussion is missing the opportunity,” Wicka told HealthLeaders Media. “We’re spending a lot of energy on CHIP, but if you look at the overall expenditures towards Medicaid, it’s not where they should be spending their time. They should be thinking about how to more impactfully align performance pay, as well as performance between the health plans, providers, and these more high-consuming populations of Medicaid.”
Wicka said the company’s engagement designs for 2018 seek to address both Medicaid and Medicare populations, which frequently enter and exit health plans within a calendar year. That includes the challenge of engaging CHIP enrollees despite the potential exodus of nearly 2 million by the end of February and maybe more to follow throughout the spring.
NovuHealth has already reduced its projections and investment in engagement strategies for CHIP enrollees after extensive discussions with its Medicaid clients. Wicka said the company has shifted its funds to instead pursue high-cost populations, which comprise the primary base of NovuHealth’s engagement strategy.
Those high-cost consumers include disabled adults, dual eligibles, and the adult diabetic population. Wicka said while the CHIP stalemate has been bad for business, it would be worse if those high-cost consumers experienced a similar exclusion.
“It feels like to us, at least with our clients in the Medicaid space, that they’re essentially trying to put it in neutral and taking a wait-and-see [approach] a little longer before driving significant strategy shifts for the CHIP population,” Wicka said.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.