Transcript: Adapting to the changes in Medicaid policies: The role of automation and expert solutions

Good afternoon and welcome to today's program titled Adapting to the Changes in Medicaid Policies, The Role of Automation and Expert Solutions. My name is Brian Rhodes and I will serve as OMC for today's program. Today's program is sponsored by Optima. Thank you to our sponsor and to you and our audience for giving us your time and attention. Note that an on demand version of this program will be available approximately 1 day after the completion of the event and can be accessed using the same login link that you used for the live program. Before we get started, I have a few housekeeping details.

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Finally, should you experience any technical difficulties during today's program and need assistance, please click on the Help widget which has a question mark icon and covers common technical. Issues. At this time, it is my pleasure to turn things over to our moderator for today's program, Ray Woods. And Ray, with that, the audience is yours. Thank you, Brian. Welcome, everyone. My name is Ray Woods. I am Vice President and national spokesperson with Advisory Board. And for anyone who doesn't know who Advisory Board is or what we do, we are a healthcare Business Research firm.

All we do day in and day out is study what is happening in healthcare today, where our industry is going next, and most importantly, what health leaders like you should do to adapt to all of the changes around us. I also happen to be the host of our weekly podcast, Radio Advisory. So if you like conversations like the one we're about to have today, just search for Radio advisory wherever you get more podcasts to get conversations like this in your podcast feed every Tuesday. I think we can all agree that it's been a pretty big year in healthcare and frankly, an even bigger year in healthcare policy.

And my peers at Optum and I, we've all lived and worked through some pretty substantial in healthcare. And make no mistake, the changes resulting from the One Big Beautiful Bill Act may very well be the biggest change to healthcare in a generation. In today's conversation,

we're going to focus on the upcoming changes to Medicaid policies. Specifically, we're going to talk about work requirements, eligibility checks, Co payment increase, state financing rules. And again, these changes will significantly impact in particular hospital and health system margin, but the changes will also have ripple effects on the entire healthcare ecosystem. Now before I go down my pessimistic rabbit hole, there is some good news.

These changes aren't going to take effect until 2027. So in today's conversation, I want us to focus on what you do next, because as these policy changes get closer and as they do start to take effect, healthcare organizations must adapt. We have to adapt to maintain compliance, to ensure access for vulnerable populations, and to help keep provider margins in the black. So for our time together, we're going to talk about what the changes to Medicaid are, who will be most impacted and when, and the partnerships and tools that you can put in place today to better weather the storm to come.

Now, in a moment, I'm going to ask my panelists to introduce themselves, but I also want to invite you to participate. Send your questions throughout the discussion. I'm going to do my best to answer them or to direct them to the panelists in the moment. And I'll also save a few minutes at the end of our conversation for any additional questions that we might have. With that, let's get into the content by introducing our panelists. Let's start. Let's start with you, Sunye.

Hey, thanks so much, Ray. Hey everyone. My name is Sunesh Shah. Looking forward to the conversation here. I sit within our Optum Insight pillar and really for the past three years, I've been focused on our front revenue cycle management, product and go to market strategy. So what that really means is I spent a lot of time thinking about how we're going to craft our solutions and how we approach supporting patients and our provider customers in delivering a push button, seamless access and clearance experience when they're seeking care. And one of the big parts of that is building that invisible infrastructure that enables a truly patient centric, frictionless Omni channel experience for patients.

And yeah, I agree with you, Ray. I think Oba or HR 1 is probably one of the biggest policy changes maybe since the ACA, but it's it's still just another piece of this complex puzzle that we're trying to solve as we navigate this industry. And really, when I think about the opportunities we have with the emergence of AI and technology, honestly, I feel like we have more tools now to try to find the simplicity and the upcoming complexity that this bill is going to introduce. And one of the ways I think about it, if we're on the right to measure whether we're on the right track is if we can make access to healthcare as easy as ordering, let's say something like Uber Eats or DoorDash, then I think we're headed in the right direction.

So thanks, Ray. I think I'm going to hand it off to Mike now. Yeah, thanks. Today, Mike, my name is Michael Landon, Regional Vice President. Specifically working with providers in California, Hawaii, Nevada and Guam. And we provide support across a variety of functional areas from revenue cycle to clinical to operations for those providers. And the providers span from physician groups all the way to large health systems. And so my team is out engaging and talking to folks about the impacts of HR one and what the anticipated impacts are going to be on their operations and and ways to solve.

So excited to have a a broader conversation and specific to Medicaid today. So with that, I'll turn it over to Vikas. Thanks, Mike. Hey guys. Vikas Guard, I am VP in our our Optimum advisory practice and I lead a peer clinically clinical team within the Optimum Advisory. So Optimum advisory if you don't know is a consulting organization that sits with an Optimum and provides consulting services to the USC but also to other payers. So, so I'm part of the payer pillar within that and, and a lot of my clients are external payers and I do work with a lot of Medicaid MC OS as well.

And, and this has been on top of mind SMS that this is sort of the biggest change since since ACA maybe so and, and a lot of my clients are small bears in the market. So they're all trying to figure out kind of what, what it means to them. So I'm, I'm excited to share, share some of that here and also learn from my my fellow panelists here. So all four of us have teased that this is a big deal, that this is a significant change. Let's not hide the ball. What are the biggest changes and challenges in Medicaid and help help us quantify how big of a deal this actually is?

Yeah, I'm happy to, to start us off. I, I think the, the impact is, is absolutely going to be significant. If we look at, you know, states that have done something like similar to this in the past, we've seen a pretty significant reduction in enrollment based on this. Being adding work requirements, adding things like 6 month eligibility checks. This is something that's been documented at the state level. That's right. And so the the result of those requirements, if you look at Arkansas, which did this back in 2018, there was a 7 1/2% reduction in enrollees to Medicaid.

And that impacted the revenue for the facilities in that state, but also impacted uncompensated care, right? Those patients still needed care. It got, you know in their condition got worse because they delayed that care and so the the challenges for the facilities in those markets was significant. The administrative burden was significant. So sine or or. Just to put a finer point on that, what we found in the the literature is that when we add work requirements, when we add this administrative burden, it, it actually didn't necessarily do a better job at finding people who who are not eligible for insurance because they're not meeting their requirements.

Correct. Actually the opposite, that they were in theory meeting the work requirements, meeting the eligibility checks, but they were getting lost in the system due to this administrative burden. And that's when we see the increase in in, in this case, unfairly uncompensated care. Yeah. And if I, if I have the numbers right, I know Ray, you were asking, I think it's something along the lines of over $800 billion over the next 10 years of Medicaid cuts from like the system that are going to be extracted. And so, you know, when you look at this and the impact at a state level, of course it's going to vary, but on average you're looking at somewhere between 20 to 30% of funding cuts hitting each of the, you know, each, each of these states that are, you know, participating in federal funding from, from Medicaid.

If you have states like where I live in New Jersey where you know, we were an expansion state, the impact is going to be even greater because the percentage of funding cuts that are going to occur because our our high watermark is higher than many other states is going to be the more significant. And so, yeah, those are just some of the ways for you to like think about just how large of an in, excuse me, how large of an impact this bill is going to have from a financial perspective. And then also just looking at what the downstream implications will be, because now you're going to have less funding on hospitals and health systems that are already financially constrained, sort of adding fuel to that fire that they're already struggling with from a viability and a, you know, ongoing financial stability perspective.

And so you're going to have to make some really difficult decisions if you're not getting ahead of the implications of this. Through. Through. Through thoughtful sort of strategic ways in which you can address how you can support your Medicaid population. And I appreciate that you ran at the numbers there, right. The other number that I'll throw out is that the CBO has estimated that over the next 10 years, if we include the, the ending of the enhanced enhanced subsidies in the ACA, which are set to expire at the end of this month, that a little over 14 million people, I think it's 14.2 million people are set to lose their their insurance.

So what we are dealing with is both the direct funding cuts that you just referenced soon, yay and also the indirect funding cuts, right. Michael, you said that when folks lose access to coverage or even if they perceive that they are going to be more financially responsible for their care, this is very well documented, they delay care, they defer care. That includes preventative care. It includes screenings, it includes vaccinations, it includes all the things that keep them healthy and keep them less expensive for then risk entities to cover. Because what are you hearing from the payers? We're going to mostly focus on the impact to provider here because it's significant.

But what are you hearing in terms of how big of a deal this will be from the health plan side? Yeah, no, it, it, I'm getting the same things. It's a big impact. I you mentioned. So the, the 10 year impact that the CBO estimated, I think it's, it's basically estimated it's like $1 trillion of spending cut that the, the, the federal government is trying to do here, right? Like through, through, through these cuts. So I guess that means lower membership for my, my clients.

I think that they're, they're afraid of, of losing some of the members to the work requirements because the work requirements are to be cumbersome. Are, are the members going to keep up with the, the eligibility determination? So, so I guess there are two folds 1 is they are worried about folks kind of leaving or due to the work requirements. So as we know there are sort of more work requirements between the ages of 19 and 64 for, for for the AC expansion population that that's coming. So that that could mean lower members for for my clients and then even those who are eligible may not be doing the redetermination.

So because it's complex to sort of walk through. So, so I think that's the biggest risk for for payers that I'm working with is, is are they going to see a huge decline in the membership in for, for, for the payers. The other pieces around sort of the mandatory cost sharing. So I know there is the provision of of $35 per service for the expansion. It does that the now the member is going to pay. So, so that that actually should be a welcome news for for for my payer clients. But on the other hand, they are actually creates more administrative burden because now they are supposed to get that that the claims administration, the claims all have to be kind of reprogrammed to to this new cost sharing requirements.

So, so I would say between the work requirements, the eligibility determination requirements and the mandatory cost shiftings, those are the three big things that that my peers are really focused on. Let's before we talk about when we do want to get to what to actually do about this problem, but I want to make sure everyone on the line has a sense of of what's actually coming down the pipe here. I want to talk about the providers for a moment. We've all said this is a big deal and it's a big deal for anyone who takes Medicaid. The bigger proportion of Medicaid that you see, the bigger of a deal it's going to be for your particular organization.

With that in mind, Sunya and Michael, what kinds of organizations are you seeing that are likely to be the most impacted and how at risk are their finances as a result of these changes? Yeah. I mean, look, safety net hospitals, those that like you said have a very large percentage of patients that participate in Medicaid, those organizations are going to feel a very meaningful impact both in terms of uncompensated care, but as well as administrative burden. And so it's a it's a double edged sword. And then you're going to

have even, let's say a sort of another spiraling or snowballing effect that you could potentially result in folks delaying care.

And then you've got folks showing up at your review. So now you've got operational workflow challenges that you're trying to solve for. So it's definitely a multi faceted problem with different sort of cascades of impact that if you're not getting ahead of may may result in even sort of more pain or more complexity or more financial strain than than than trying to get ahead of this. So, yeah, when I look at, you know, some of the, the customers that we that we speak with, the ones that are, I think you know, more than, let's say twenty, 3040% of your population is either on Medicaid or Medicaid.

And sorry, on Medicaid. They're paying attention, you know, they're doing things, they're thinking through. How is this going to impact us? I think folks in rural and academic medical centers, they're also in very difficult situations here when the complexity is being added. And let's say you have limited staff to help support some of this added complexity. You know, even being able to move somebody from one particular role and responsibility to now have to manage the outreach, the patient or sort of almost, you know, be intelligent or find ways in which you can get alerted that, hey, this particular patient needs to get their work requirement documentation.

And that's non trivial. And that's already going to, you know, pack a very busy work, work, work staff already. So I think those are some of the areas that I see being hit the hardest when it comes to the impact of the bill. And there's a question in the chat, I want to be clear, this includes FQH CS, right? So any organization that's going to see a more substantive portion that currently has a more substantive portion of their pair mix dedicated to Medicaid is going to be hit harder. And Sunia, you mentioned a stakeholder that I'm actually not hearing enough folks talk about, which is the academic Medical Center, right?

It used to be that we thought of the AMC as this kind of like shiny night on a hill, this pillar of innovation. And they are, they are meant to be for healthcare. But AM CS actually see a disproportionate share of Medicaid patients. The urban hospital sees a disproportionate, they're about the severe Advisory Board. And if we look at margin in 2027, margin in 2028, we start to see really scary numbers -12 -, 20 my, I, I saw a -, 30 margin. There's a question in the chat just to want to be really, really clear about what the Medicaid changes are.

So let's kind of go back and reground and in what we're we're talking out there are changes in in how folks get access to their Medicaid coverage. And maybe actually I can talk about when folks are going to start feeling the impacts to these. I'm happy to do this or or Michael Sunnier if you want to jump in and kind of say when some of the line item changes in

Medicaid are going to start taking place. Yeah, I can. I can go. I would say a couple of key ones that are going to you know that we're aware of that, that that the documents stipulate which is beginning in 27.

Those that are able bodied like you said age 19 to 64 are going to be required to work 80 plus hours a month and and provide documentation that they are working those hours every every six months essentially. So that's the second point is that their redetermination for continued coverage once you're enrolled in Medicaid is going to shift from annual to biannual or semiannual, which means every six months documentation is going to have to be submitted to a given state agency that this individual that's on Medicaid is meeting the work requirements. We're going to talk a little bit later I think about what do we mean by work requirements. So we can we can dig a little bit deeper there.

The Third Point is that, and I think this one is one that is, is very is is very complex, which is the retroactive period for Medicaid coverage. Is, is going to be one month for expansion States and two months for traditional enrollees. So that's also another complexity that means that the speed with which you submit the application and get approval for Medicaid through your given state agencies, yeah, that window is now constrained. And so you have to be very thoughtful and deliberate and focused on making sure that you're submitting those documentation as well as applications and, and overcoming any sort of denials or reasons that a particular application may not get approved as quickly and as efficiently as possible.

Otherwise, you're going to have some more uncompensated care for that patient if if the application process takes too long. So those are a few off the top of my head, you know, off the top of my head, right, and. I just want to repeat that this has been well that these changes have been tested at the state level before, right? Michael shared that at the top of the call for anyone who missed that. When it is tested at the state level, we see that the folks who lose access to coverage should be eligible for coverage because they are meeting these work requirements, but they are being lost in the system because of the administrative burden.

It actually takes a lot of work to prove your your Medicaid eligibility. We're now asking folks to do that twice a year instead of annually. And it's complicated, right? There are supposed to be exceptions for parents, for people taking care of their aging parents, taking care of a child with a disability. You own a farm. It's hard to prove, you know, the amount of time that you've been working on that farm and so on and so forth. And before we get to what we do about it, there's one of our stakeholder that we haven't mentioned yet.

We talked about some of the providers that are going to be hit hardest because talked about what he's hearing from his health plan contacts. I actually want to gut check on the people for a moment, in particular vulnerable populations, what will be the the human impact here as we also talk about how these changes are going to really erode hospital health system and health plan finances? Yeah. I, I think it creates a lot of new challenges for the, the patient population in terms of trying to ensure that now they're meeting the work requirements and that they're reapplying for coverage with, with all the other issues going on in their lives.

And I think that's going to create a real challenge for folks who should be qualified to retain the the coverage. So our ability to help them through that process is going to be critical to maintaining coverage. I agree. And and I mean, that's some of the things at least my clients are looking to. So people who lose, lose coverage, how do they at least guide them to continue to use maybe social services or other support networks? Because with with Medicaid, there's a lot of kind of social determinants of health.

There are issues that are that population. So payers do focus on sort of providing that holistic kind of set of services. So as I think they are worried as as members who were no longer going to be eligible, how do they maybe ensure that that at least they they know and other, other places where they could get get continue to get some of these services as they lose some of the requirements. But but there's definitely, if there's you're going to I guess the humans, the the members are going to be the biggest losers, right, As we see in in this in this whole change.

Absolutely. And I, I referred to healthcare as an ecosystem when I kicked things off. And I actually think that's a really helpful word to Orient on because just like in a natural ecosystem, right, a natural ecosystem depends on the health of the small animals and the large animals and the bugs and the plants and everything around it. And that is true in healthcare as well. So while the the sector that is going to be most kind of significantly hit in the near term are those hospitals and health systems, those providers who are predominantly taking Medicaid because you're doing a good job of talking about the health plan lens, there are also other ripple effects.

So somebody asked in the chat, and this is a really astute observation that health systems are also at risk of losing their DISH status as a result of these changes and therefore might lose their 340B eligibility. I have CFOCFOS at hospitals. Tell me, Ray, I wouldn't have a margin without 340B. So that's an example of the indirect ripple effect that can continue to erode already very fragile finances. But I don't want to spend more time interrogating the problem. I want to actually move us to what we do next, what you all do next. And I think

this is a big enough challenge that the four of us have actually described it as an all hands on deck moment, right?

A moment where we need health leaders to reach across the aisle and to work with each other. My question is, which is perhaps a very simple question, is if it if it is an all hands on deck moment, who are all the hands? Who are all of the people or the organizations that the folks listening to this conversation should be looking to as they deal with the practical ramifications of changing Medicaid policy? Yeah. I mean, look, it's, it is, it really is everyone. I mean, you know, I think you've got vendors within the within the ecosystem that are ready to help.

I think you've got state and and local agencies realizing that the implications are going to be very significant. So I think they're also ready and willing to help. We need legislators and policy makers also thinking through and understanding what the implications are of this so that the next time we have an opportunity to think through really good policies that are going to help our health system, that folks get involved and understand that, yes, there is complexity that this is introducing, but that overall, you know, we are. There's going to be good things that are going to come out of this because I think constraints also Dr. innovation, but there's also going to be a lot of pain that's going to come through this.

And so if we're all kind of making sure that as we're navigating the complexities, we're also looking for what is working well and making sure we're surfacing those to the right stakeholders so that we're all kind of sharing collaborative knowledge to how do we address this and driving our whole health system forward. That's another really important part of all the work that we're going to be doing as a team sport to to navigate this so that the flywheel is focused on solutions and and surfacing what's working to get to the next iteration in a in a better health system that works better for everyone, but more tactically. Ready to get back to the back to the question?

Yeah, I mean, I'll give you an example of some of the things that I'm seeing even within New Jersey. We have a new governor, a new administration that's going to be coming in. And like Cheryl, she listed out a list of her top 10 priorities and she created task forces. And one of the task forces was specifically on addressing the complexities of healthcare, Medicaid enrollment. And so if there's a government, you know, a sort of statewide task force on this, that's going to include leaders across health systems within the state that are going to be working together, sharing knowledge and finding best practices that are going to help them navigate this.

So those are a couple of examples of what I, you know, what I think it means to have all hands on deck and leverage all the resources you have around you to try to navigate this.

Yeah. I would layer into that, you know, community organizations that are out there today supporting hospitals, health systems, providers in a variety of different ways. I think reaching out to those community organizations, helping them understand the problem and ways in which they can help. Volunteer hours do count toward work requirements. So if you can get your patients engaged with providing or doing volunteer work for the community organizations that could ultimately then support patients with coverage validation, work requirement confirmation.

And there, there are opportunities to really engage the broader community to help solve this problem. So all the, all the points that Sunay covered, but I'd say, you know, be creative in terms of, of who else can help you solve this problem and, and rally your community around solving it. Yeah. So, so let's let's name them because they're coming up. Providers and plans are the two obvious ones, right? That's why we are representing the voice of the provider and the health plan on this conversation. But I also heard state governments, state Medicaid programs, community organizations, MC OS.

Is there anyone that I have missed in that list? Feels pretty comprehensive. Yeah. I maybe add tech, sorry, maybe tech vendors and there's a question there, right? Yeah, tech, tech vendors, right. Like so can AI help with identifying who's about to lose the coverage, right. Like can tech help in in getting the member eligibility sort of requirements maybe more easier to. So maybe, yeah, I'll just add maybe there's probably tech solutions that that the tech companies can probably help with. So said differently, the, the, the kinds of partners that you would reach out to for any strategic or operational goal, be it vendor, consultant, third party, right there, they are also able to help with some of these things, including eligibility checks.

This gets me into where I want to go next, which is not just who we can partner with, who we can lean on, but also how we actually want folks to work together. And I want to acknowledge the fact that this is not the first time in recent memory that we've done a big shift in Medicaid. I'm actually thinking about the Medicaid redeterminations that happened at the end when the, when the public health emergency was declared over at the quote UN quote, end of COVID. What are the similarities and the differences to what we just went through a couple of years ago? And are is there any muscle memory that we can kind of bring back into this new moment of changes in Medicaid that should be fresh from the last big changes and redeterminations that we saw?

Yeah, for sure, Ray, what a great, what a great question to remind us that, you know, this is complexity that we, we got a flavor for, you know, not too long ago. I'll, I'll maybe say two or three points. I think 1 is the level of patient education was critical, making sure patients were aware, educating them, being proactive, letting them know of the upcoming changes

and the and the necessity for them to partner with and have a sense of urgency to respond to questions and requests that the health system may have to help them in the application process. So and we actually.

Just had two comments in the chat about that. To not forget the important role that patients play themselves in helping keep and maintain eligibility. Facilitated enrollers, right? When we talk about all hands on deck, we absolutely can't ignore the kind of boots on the ground humans. Yeah, 100%. And that and that cascades into the early, you know, the earlier stakeholder of like community organizations like your local municipal senior centers or your local municipal food banks, Oregon, wherever else. You think that Medicaid patients that could benefit from Medicaid are frequenting and are visiting create some conversations, create some discussions about this is a this is an important program that is something that the patients need to invest time to make sure that they stay, stay covered through and, and, and even take advantage of if they would qualify.

So I think those are all sort of, you know, really important parts. The, the second point that I'll make is one thing that from a, from a, from a ecosystem vendor partner perspective was being very thoughtful about proactive communication to patients from a provider or health system perspective as well. You know, we don't necessarily have, let's say a patient CRM yet. But one of the things that we were able to do within our customer base was we ran lists of patients that we thought would be impacted by the redetermination. And we shared those with our partners and our customers and we said, hey, these are the ones that we need to contact.

We need to engage with them and let them know that if they're not, you know, we enrolling or providing details for the for the redetermination, then they're going to stand to lose their coverage and making sure that we're partnering, getting that information out proactively. So those are two things that I say that we certainly leveraged and deployed during the end of the public health emergency that I think are still good practices for us to get reintroduced in the coming year one. Of the sorry, Ray, one of the things that I'd add is I just I do think we're in a better situation a little bit than we were back in COVID.

I mean the capability related to AI is fundamentally different from where it was when COVID happened. And today I'm going to turn this back over to you to comment on because I know this is your wheelhouse. But I do think the technology and the capability that we have today is, is very different and stronger in terms of of our ability to use technology to identify those patients and coordinate the outreach, whether that's through voice interaction through emails or or via my chart or their, their HR platform. So there, there are a lot of different ways to engage these patients with technological capabilities.

So I'll turn it over to you because you certainly can add more content to that. Yeah, 100%. Like you're, you're spot on. We have more advancements in technology now than in the past. And I also think as, as an industry, we, we, we've also understood the importance of focusing on engaging with patients before they show up for their clinical interaction more proactively as well as you referenced, like, you know, tools like digital scheduling, they've been around for a while, but I think they've stalled out because of the importance of needing that, that sort of human in the loop.

And so when you've got tools like conversational AI, digital engagement, digital self scheduling, packaging all that together into a solution that's going to help identify patients and let them know about these resources being available is going to be critical. The other area is as you develop, let's say, capabilities specific to Medicaid enrollment, like patient portal, like whether it's my chart, I know we're building something proprietary within our portfolio where it's focused exclusively on Medicaid patient management, a patient portal specifically for Medicaid management. And so as patients are engaged in tools that give them visibility, give them proactive alerts, send them outbound phone calls, send them SMS messages, like as that level of intimacy between the provider organizations and the patients continue to grow.

Now I think we are better equipped to handle some of this complexity. And and I think we have to, I think we have to continue to stay on top of what capabilities exist, but then thoughtfully and you know with an air towards high quality patient experience roll them out. And doing that now, bringing that muscle memory back now is something that's important. There's a question asking to confirm in the chat about when these changes are going to take place. The earliest change to Medicaid specifically is going to take place the last day of the year in 2026 or so.

For practical purposes, that really means 2027 with some of the additional changes on the taxes that Sunyi was talking about in 2028. So I want us to keep pushing on where you all were kind of naturally going, which is to share some examples of what you are actually hearing in the field. I think our opportunity here is to tell our audience what you are hearing from providers, what you are hearing from payers on what they are doing now to help with the challenge that's to come in 27 and 28. When it comes to Medicaid. You already shared some examples like Michael, you talked about helping with volunteer opportunities, even helping with job opportunities to actually meet the work requirements.

Then there's also the opportunities to help partner to deal with the administrative burden of proving that you're meeting the requirements. What other examples have you seen in the market and how folks are working together today? Yeah. Maybe I'll share. By the way. Go ahead is around. I think one of the things at least all of our payer clients are doing, I think

the actuarial folks are predicting as to the folks who remain or I guess who cannot not, not going to lose the, I guess coverage without the with this provision are going to be probably out of higher equity in the, in the.

So which means they're going to put lower lot more pressure on the financials for for the bears. That's something what we're hitting from our actuarial folks based on kind of their, we had analysis of who they think is going to lose the membership, who, who they're potentially going to lose from a membership perspective. So I think there's also this focus on maybe sort of increased focused on like clinical interventions and, and sort of social support for them. So I think there's, there's renewed focus on, hey, the, the, the patient population or the member population that's going to stay is going to be sicker there. So we need to get prepared to, to maybe help them sort of more like with more social services support.

So that that's one, one thing I know we didn't cover yet, but that's also I'm hearing from from my clients. Yeah. And for me, I think we've we've hit on a number of things that we can do to help the patients and to ensure that folks have coverage. But I think there are plenty of other no regrets moves in terms of ensuring that you're operating as efficiently as and as effectively as possible across the entire health system. And so I really think based on the the scale of impact here, so organizations really have to look at every facet of what they do from revenue cycle to housekeeping to discharge planning.

You really have to think about everything that the organization is doing and you know whether you're being as efficient and as effective as possible. I know that there's been a lot of pressure on that over the last 10 years of like, how do we, how do we get more and more efficient? But that pressure is, is going to ramp. And so it comes a question of, you know, are there ways to automate tasks that are currently being performed manually? Can you eliminate some of the work that's currently being done? And you know, can we find other partners that can help with that?

So the the pressure is unfortunately just going to continue to to ramp on providers. I really appreciate you bringing that up because what you just named is a kind of ripple effect action that folks can take. This conversation is about Medicaid. So it makes sense that we have been talking about how to deal specifically with the changes to Medicaid policy. But what you're talking about is the fact that the changes will hurt the overall margin of the business. So you also have to thinking of think about supporting the overall margin of the business, which is it includes how you support Medicaid eligibility and enrollment and it also includes all the other things you're talking about.

Yeah, yeah, that's right. I mean, I was talking with the health system earlier this week and they're estimating a 40 to $50 million impact to their bottom line on an annual basis. And that's that's not solved with one solution, right. You really got to do a lot of different things in order to to solve that problem. I want to talk specifically about looking to technology and other support services. Everybody wants to hear about what AI can do here. We've gone in and out of this a little bit already. How specifically can AI and automation help with the documentation, help with improving compliance?

Do you have any examples for doing already? I can touch on it a little bit, Ray, on, on some of what we're doing within our eligibility enrollment solution suite. There's a couple dimensions to it. Let's go through the workflow and say, the first is how can we efficiently and effectively identify those patients that we think will qualify for Medicaid, trying to increase the awareness as well as the funnel of of patients and that can be reactive and then of course, proactive. So can we use elements like social determinants of health? Can we partner with healthcare organizations to then say, OK, you know, you know, we do see a large influx of patients that are potentially qualified for Medicaid coming in through the Ed, but really is the Ed the best place to engage in that conversation?

No, they haven't a few, they haven't a few issues. So, you know, there's, I know this isn't an AI issue, but it goes back to Mike's point of like, are we thinking about all the operational areas that we can engage in a thoughtful way to increase the funnel of engagement to bring the patients into this program? So that's new Step 1 and that's analog. The digital part comes in to say, how quickly can we screen the patient and, and, and see whether they would qualify for this program? And if not, then what's the next step in the decision tree to how do we financially, how do we make, how we provide support services to help in the financial support, the care that they're about to receive?

That's another step. Now let's say you qualify for Medicaid. This is now where you have to go in through the entire state application process. And unfortunately maybe everybody on this call, if you have never seen or or worked through a given state Medicaid application, yeah, go, go for it. Bring your aspirin, bring your drug of choice. It is immensely complicated, immensely difficult and requires a lot of help. And that's what we do. I mean, we provide that help, we provide that service, but it's very manual, it's very human centric, which drives Costa.

There are low hanging, there is low hanging fruit where AI, like I mentioned earlier, outbound phone calls, conversational AI can help with this where you can do a outbound phone call to say, hey, Sunay, we need your family size in order for us to complete this application or you know, we need your pay stub from last month in order for us to complete this application. Can you please go into the portal and upload it? So and then maybe the

next piece is that intelligence layer to get proactive about knowing when information is needed. And we have some AI enabled tools within the workflow that we use. And we use some of that in an early stage, very not really AI during more like a deterministic sort of pattern identification level during the redetermination to reach out to patients that we knew were coming in based off of a date of enrollment.

But now we're getting even more sophisticated to make sure that we're not letting any of our applications that are pending to be submitted fall through the cracks. So are our agents and our resources, our healthcare representatives, making sure that we're engaging with patients at the right cadence and the right channel to get the application submitted. And then the last piece, right, is how are we ensuring that when a application goes to the state agency that we're staying on top of timely responses back from the state agency? If there's a denial or something that we missed in the application that causes a denial or delay, how are we putting back that into our workflow and our quality checks to make sure no other application has that same error?

And that's also using some AI and automation to make sure we're doing that intelligently and proactively sort of reaching out to state agencies in a more automated way as well. So those are some tactical examples. I think it's a whole other conversation to talk about what it means to leverage AI. And you know, we can we can certainly go there a time for meth, but I don't really want to stay focused on on Medicaid and full on. Yeah. What I would add on to that, right. I mean, I think you talked a lot about the coverage and ensuring that folks have coverage and met the requirements.

I think all important things to to ensure that you're going to get paid. But I mean there the tech that is out there now that I would also add that's improved pretty substantially is around patient self scheduling. The insurance verification, prior authorization process has all largely been automated. I mean there's obviously some variability in that, but there's been a high degree of automation. Computer assisted coding has has really transformed the industry over the last 10 years and continues to do so. More and more of that is automated where coders are are more reviewing in confirming charge capture as well clinical documentation where you have natural language processing.

Reviewing the the notes that are out there has really changed the, the level of effort as well as the the listening devices that can capture information as physicians are are documenting, which eliminates the need for transcription. So there's, there's been a lot on that. And then if you move to the back end, their revenue cycle focused at this stage, but the claims editing has been improved pretty substantially. You're seeing more identification of issues prior to claims going out, which reduces the timeline to getting paid. So there's

there's a lot that's being done in that space just within revenue cycle and we don't have enough time to go through that level of depth.

But you know, if you look at patient outreach to draw new patients into your facility, whether you look at your clinical performance, whether you look at workforce optimization, there are capabilities in each of those sectors that are are as robust as the revenue cycle capabilities that I just prefer. I love those examples. And there's a really astute observation in the chat right now, which is that AI will be used by many stakeholders. For example, it will also be used by governments to determine eligibility. Can you talk about the effects, positive, negative or neutral about the fact that all of those different stakeholders that we already said all need to be involved in this all hands on deck moment are going to be using AI to determine eligibility to work on the efficiency on their own end.

Is this something that is going to help all of us, or is there a potential conflict here? Yeah, it's we're not far away from bots talking about for sure that that is that isn't our near future. There's no question whoever the astute individual in the chat was with that. I'll say a couple things, Ray, on that. One is, I think, you know, one of the other, maybe this goes back to an earlier point that you raised about who are the stakeholders involved. But as we even think about the implications of, OK, you know, trying to find coverage options for patients and if Medicaid is adding more complexity there, there's going to be a higher level of focus to ensure that if a patient can qualify for a federal program, let's say things like, you know, Social Security or disability insurance or SSRI, that there may be a shift in looking at federal programs first, which may drive a higher rate of enrollment in federal programs because of, again, this, let's call it the safety net of Medicaid now becoming a bit more complicated or more friction hospitals, health systems, patients.

We're going to look for the simplest path to get coverage for patients. And so that may be another development of, OK, yes, federal government can also deploy bots and look for eligibility. I have a feeling that they're going to focus on some more of their programs to ensure that, hey, that as more, let's say demand is going to be shifted towards federal programs, making sure that the right patient profiles and the right type of patients are able to participate in federal programs too. What's going to happen on the state level? I think that's going to still like we're still going to see the level of adoption there.

When I look at the way and how applications are submitted at a state level, like call me skeptical of states rolling out AI solutions for this, but perhaps I'll be, perhaps I'll be proven wrong. I think we've got more fundamental issues to sort of simplify the process than we do about rolling out AI at a state level. But I certainly think it's possible at a federal level, and it will be. You know, I think there's a concern going to be around the bias in the AI as well. I

think there will be high level of scrutiny around as As for example, my clients payers use this to, to help either with eligibility or or retention support.

Like are they targeting the right members? Are they, I guess even on the issue of kind of helping the members find the, I guess, small entry opportunities or or connecting them with the some of the employment opportunities, I think there's going to be scrutiny specifically from like a like who are you kind of steering? Where are you steering the members? Is it all? So I think and then also, I guess just just documentation of, of requirements from from this eligibility. I think AI is going to help but but I think. While.

I mean, this technology is new, right? So there's, there's, there's going to be a lot of questions just across, across the board on the just the, is it unbiased and, and, and, or does it give fair, I guess more advantage to maybe kind of the, the bigger plans versus kind of the smaller health plans that are out there? They can't use it. So I think there are all these questions around bias and, and, and just ability to use AI by, by different stakeholders. I think that's going to be at least key for for for my clients.

You're doing a good job of reminding us that there's no such thing as a silver bullet, right? Even though there are these solutions that we do need to get in the hands of the people that we serve, the people who are listening to this conversation, we also have to deal with the intended and unintended consequences of some of those those efforts. You all represent Optum, which means that you represent many of the services and the solutions that can help organizations that are staring down the barrel of this problem and want some additional help. Whether it's help in the form of technology, as we've shared, help in the form of boots on the ground consulting, as we've given some examples of.

I want to give each of you an opportunity to speak directly to the folks who are listening. How urgently should folks act, and what's one step that you want our listeners to take next? Yeah. I would highlight one thing. We talked a lot about the impacts of Medicaid, but that doesn't mean that impacts of HR one don't start until 2027. They actually start next year. Also, with ACA subsidies going away later this month, that's going to have a pretty substantial impact on folks that are currently receiving coverage.

So I would say don't delay. The impact associated with HR 1 is coming and it's coming very soon. There are a lot of no regrets moves that organizations can do today really to drive operational efficiency to to outreach to patients to draw new members into their service area that I think will help improve margin in the near term as you prepare for bigger and bigger impacts as HR one changes continue to grow over the coming years. So we've covered a lot of those things through this conversation, but for folks who are interested in

talking about it in more detail, ping me more than happy to to get you connected with the right folks internal.

Yeah, I can, I can go and and maybe this will sound convenient and easy, but I I would say urgency for sure. I couldn't agree more. But obsess over the patient, obsess over the patient experience, obsess over how this complexity can be navigated. And as you make difficult decisions and you think through how do you solve this complexity? Just make sure the North Star is the patient. And if, if the focus is on the patient experience and how are we aligning our operational processes, our policies, our work flows, our incentive structures, it should always be making sure that the patient is at the center of it.

I know that's a lot of what we do and it's non trivial. It's easy to say and maybe it sounds almost like, you know, pie in the sky. But I feel like it's important as we deal with like very difficult times to make sure that our North star is aligned. And and for, for me it's, it's always at the, it's always putting the patient at the center and then the rest of the decision sort of cascade for me, right? Yeah, I guess patients are members to my clients, but but I guess this one from a member perspective, it's it's the and then and payers always struggle with member engagement and and retention, right.

I think continue to focus there. I think create a more robust capabilities. Health plans have always struggled with sort of just engaging the members, right. So because they they're more engaged with the health system. So I think payers just also, and this is a problem that payers and providers need to solve together, sort of just just work with your network partners. Just just as somebody said, put, put, put the arms around, it's like it's, it's going to be here sooner, as we say end of 2026, but planning and execution needs to start now. So I think that's the piece, what we're telling our clients is to to create a more robust member engagement and retention policies, engage with your network, engage with your members to the canal.

We have a few minutes to take questions from the audience before we close things out today. I'll start with a question that we got a little bit earlier in our conversation, but it does a good job of expanding back, taking a step back, as you all just kind of encouraged us to do, from just thinking about medic, from health policy, from additional changes in regulation from these cuts. How will providers change their approach to growth in 2027 and 2028? Or will they at all? I mean that that's a, that's an easy one for me, Ray.

It's just going to go back to the soapbox that I that I just went down, which is if you're delivering a positive patient experience, word of mouth is going to get out and that's going to help your system differentiate itself from your competitors. If you're in a competitive landscape, if you're looking at, at growth in terms of, you know, like pure, pure revenue and

pure profits, I think, Mike, that's going to touch a lot on what you were talking about regarding are you operationally efficient? Are you finding those inefficiencies and, and, and modifying your workflow? And maybe the maybe the third piece, Ray, is if how, how you're, you know, leveraging technology.

I think AI, of course, has a lot of potential, but there's also a lot of risk. I think we have to be, you know, thoughtful. Like that's the best word that I could think of and how we use this technology. And I think I saw the question in the chat of like, but, you know, humans have bias. Humans make errors, but it's the same sort of dimension of autonomous driving. And why has an autonomous driving made its way out to the masses? Because we hold technology to a higher burden than we hold our humans.

We allow for error within human and we accept errors within humans. We don't have that same level of expectations when it comes to the technology we use. So therefore it is an open conversation about how much error within AI are we willing to tolerate, How much of the benefit that we gain for that level of error are we willing to sacrifice? And we haven't had those conversations yet, hence the point of how early we are in this. And what I mean, that's an example of what I mean by the thoughtful use of AI is until we have some of those more difficult conversations as an ecosystem, as an industry, it's going to be take some time for us to extract the value and realize the value of technology in our industry.

Absolutely. Well, I want to remind everyone on the line that your connections to US, conversations with us are not over. I hope you get in touch with my panelists. If you want additional support, if you're looking for more answers in terms of the technology, in terms of the boots on the ground support, if you're looking for more conversations like this about what's changing in health care, subscribe to Radio advisory wherever you get your podcasts. We'll send you some more information about how to do that. And for any question that we didn't get to in the in the chat, we'll get to those in follow up with that.

Ben, I will pass things back over to me. Brian, I'll pass things back over to you. Thank you very much. Right. And unfortunately, that is all the time we have for today. Again, as Ray noted, any questions will be passed along to the speakers for offline follow up as needed. And I want to thank our speakers once again for an excellent discussion and our sponsor Optum for making today's program possible. And finally, thank you to you and our audience for participating today.

We hope you'll join us in the future for another Health Leaders webinar. And this concludes today's program.