State Universities and Medicaid: Partners for a Healthier Rhode Island
Institutions of higher education are an important partner for the public and private sector. States ally with universities to coordinate education and workforce development activities that can make the labor force more economically competitive. Private companies shepherd medical discoveries and technological advances from universities to patients and consumers through technology transfer programs.
Universities also increasingly serve as a resource for government. Innovative partnerships harness their subject expertise, research and analysis capacity, and education and training capabilities to inform and improve government policies and programs.
Several states have begun leveraging university resources to advance healthcare by launching State University Medicaid Partnerships, which draw on the expertise of local research universities to improve the administration of state Medicaid programs
As one of the largest government health programs, Medicaid affects the health of a state’s residents as well as its budget. In Rhode Island, Medicaid and its assorted programs provide health coverage for over 280,000 residents – almost a third of the state’s population under age 65.(a) Rhode Island was expected to spend $893 million on Medicaid in FY 2016, with an additional $1.3 billion in funding coming from the federal government.2
(a) Medicaid enrollment in Rhode Island has grown nearly 50% since 2013, when the Affordable Care Act expanded eligibility and encouraged broader enrollment.1
(b) The information in this article was gathered from publicly available materials about existing partnerships, as well as email inquiries and follow-up phone conversations with several partnerships.
Given the number of affected individuals and the funding dollars at stake, many states are turning to universities to help their Medicaid programs achieve the “Triple Aim” of providing quality care and improving public health while controlling costs. This article explores how State University Medicaid Partnerships have been implemented around the country and how they might benefit Rhode Island.(b)
Fig. 1 Medicaid in Rhode Island
Source: RI EOHHS, 20161
Source: Wallack, 20163
Partners in Health
As states grapple with an increasingly complex healthcare system and rising Medicaid enrollment and costs, collaborations between public flagship research universities and state health agencies are on the rise.4 These partnerships now exist in various forms in approximately 15 states.
One of the most well-established partnerships is Massachusetts’ Commonwealth Medicine, a project of the University of Massachusetts Medical School. This collaboration was formalized in 1999 and has numerous arms serving many different needs related to the administration of the state’s Medicaid program. Another notable partnership is The Ohio Colleges of Medicine Government Resource Center. It links together seven medical schools and thirteen public universities in the state to serve as a resource for health policy research, technical assistance, and fiscal services.
Text Box 1. Commonwealth Medicine in Massachusetts – A Comprehensive, Multi-faceted Partnership
Each State University Medicaid Partnership may be structured differently or have unique features, but the goal is the same: to leverage university expertise to support the efficient management of state Medicaid programs. Universities bring their analytic and clinical knowledge, methodological expertise, and workforce development and training capabilities to bear on the important issues facing Medicaid administration.6
Through these partnerships, university faculty, researchers, staff, and students assist policymakers in addressing questions such as: Why are some populations and locations hotspots for high costs? How can Medicaid save money on the purchase of pharmaceuticals and medical supplies? Who might benefit from community- and home-based healthcare and how should these services be implemented?
Large public research universities are ideally suited for these types of partnerships because they have dedicated, knowledgeable faculty, staff, and students with the capability to deliver a variety of services and expertise. Land grant institutions in particular have a fundamental mission that lends itself well to such collaborations: to improve the lives of the citizens in a state through the generation and sharing of knowledge.
Fig. 2 Existing State University Medicaid Partnerships
The Benefits of Collaboration
There are a number of ways universities can support Medicaid program administration and policymaking.7
Scholars can serve as a resource for knowledge on health policy, health economics, clinical best practices, and other relevant topics. They can conduct targeted research projects and analyze state data to assess needs, evaluate programs, and inform policymaking and program design. The university can also provide workforce development training to healthcare providers and Medicaid staff to enhance their knowledge and skills.
Text Box 2. How Universities Can Support Medicaid Administration
While many examples exist of productive interactions between state government and local universities, formal partnerships offer the potential for a much fuller, lasting, mutually beneficial relationship.7 They ensure a consistent partner for the state across shifting agency priorities and administrations. They also allow for the long-term development of a sustained knowledge base at universities, including the hiring of support staff and faculty with relevant expertise.4
A formal, ongoing partnership can be more efficient than relying on independent contractors or hiring academics as part-time consultants. It can create efficiencies in program administration and potentially save on administrative costs, which currently account for an estimated 7% of Rhode Island’s total Medicaid spending (around $160 million).8 Importantly, work conducted by universities as part of a State University Medicaid Partnership is eligible for matching federal funds (Federal Financial Participation or FFP) in the same way as work conducted by the state’s Medicaid agency, something that is not allowable if a university is simply contracted as a vendor.
Building a Partnership
The success of State University Medicaid Partnerships requires careful consideration be given to their formation, structure, and financial plan
How will the partnership be governed and financed? How will priorities and programs be developed? How will conflicts of interest be managed and independence maintained? Addressing these questions early on will ensure a partnership that is sustainable over time, enduring changes in administration and policy priorities.
Laying the Groundwork with Stakeholders
Prior to establishing a State University Medicaid Partnership, there need to be champions within both the university and relevant state agencies who realize the potential mutual benefits of collaboration. A formal partnership represents a new level of cooperation that requires an understanding of the needs and structures of two very different institutions. The demands and workflow of each agency can be quite different and there need to be candid discussions related to the scope of work and potential models for structuring and financing the partnership.9
Typically a single institution for higher education takes on primary responsibility for the management of a State University Medicaid Partnership. However, as in the case of Ohio, other institutes of higher education may be brought in to contribute their expertise. The lead institution can serve as a conduit to engage and manage broad-based collaborations.
Text Box 3. Ohio Government Resource Center – A Focus on Workforce Development
The state legislature can also play an important role in the formation of these partnerships. In many states, legislation is needed to direct the flow of matching federal funds (FFP) from the state’s general fund back to the appropriate agencies. However, the general consensus is that such legislation would not be necessary in Rhode Island because its Medicaid funding arrangements already allow for the transfer of FFP. It is also valuable for legislators, as well as state employees and citizens, to be aware of the nature and goals of the partnership and how it can benefit the state’s Medicaid program. This will help ensure the sustainability of the partnership across changes in leadership.9
Developing Governance Structures
In Rhode Island and many other states, there is a designated state agency that is ultimately responsible for Medicaid, but a number of other agencies are also involved in administering the program. A clear set of federal regulations governs the participation of other agencies, including universities, in this process.
These regulations allow the costs of another agency’s work on Medicaid administration to be claimed for federal reimbursement by the lead state Medicaid agency through the use of an interagency service agreement (ISA). The ISA details what type of work the agency will be conducting on behalf of the Medicaid program and allows for the claiming of federal funding (FFP) for this work.
There are already ISAs in place for numerous state agencies within Rhode Island, but there is no broad arrangement with any of the universities. Any activities in which the universities have aided in Medicaid administration have been conducted through individual contracts not developed to take advantage of all of the efficiencies available via a formal partnership.
The creation of an ISA or other overarching master agreement is central to the formalization of a State University Medicaid Partnership.6 The agreement defines the purpose of the partnership, outlines the breadth of services that the university may provide, and offers guidelines on issues such as data access, publication of findings, and agenda setting.
The structure of an agreement will depend on the needs of the partnership. Annual agreements allow participants to review and revise the terms each year, but may not incentivize long-term project investments by the university. An overarching multiyear agreement, on the other hand, affords the opportunity for the university to build capacity tailored to the project’s needs. There is a risk with long-term agreements, however, that over time university resources may become arms of the state Medicaid program, rather than independent, unbiased academic assets. This risk can be mitigated by putting in place guidelines to protect the project’s academic independence (see more on this below).
As state leadership and policy agendas change, the agreement can be amended to adjust to shifting priorities.6 Most existing State University Medicaid Partnerships engage in a process of agenda setting at least once a year, if not more frequently. Priorities are typically driven by the state Medicaid agency and its administrative needs. In cases where the financial model for the partnership incorporates third party, non-federal funds, the university often plays a more significant role in determining the objectives of the project.(c)
(c) It is at the discretion of the primary state Medicaid agency to determine whether or not particular projects are essential to the Medicaid program and should be included in the state’s cost allocation plan for FFP.
Fig. 3 Structure & Funding of a State University Medicaid Partnership
Establishing Funding Mechanisms
State University Medicaid Partnerships are typically financed by capitalizing on the ability of the university involved in such a partnership to receive funds from the federal funding match (FFP) provided to state Medicaid programs. This maximizes financial benefits to both the university and the state.6,7
The most common funding mechanism for leveraging FFP is illustrated in Figure 3. Either the state agency directly pays the university as it would a contractor and then the state receives reimbursement via FFP, or the university bears the costs of the work until the FFP comes through and can be passed along from the state. The university is fully reimbursed for its efforts on behalf of Medicaid and uses the indirect rate to recoup its operating expenses and build sustainability by investing in staff to execute future agreements.
Another financing option capitalizes on existing work being done at the university that can then be claimed by the state Medicaid agency for FFP. This financial arrangement leverages existing, non-federal investments at the university and uses FFP to offset some of the university’s initial expenditures. It is useful only when Medicaid-related projects are already being engaged in or could be financed by a non-federal source.
Ensuring Academic Independence
The experience of existing State University Medicaid Partnerships suggests that it is important that the university’s resources remain objective and independent. If the university center that is engaged in the partnership has a portfolio of funding that is distinct from Medicaid, this helps maintain independence and avoid any appearance of bias. Potential conflicts of interest can be countered by having the center clearly disclose any work conducted for other state agencies, the legislature, or private organizations.
Academic independence is another important consideration. Universities and scholars typically want to retain the freedom to disseminate the research being conducted as part of the partnership. Explicit agreements regarding publication often embargo the data for a limited time to ensure confidentiality as well as allow for joint review of any publications. It is important to balance the needs of the university faculty to share their work with the political realities facing the Medicaid program.6
Text Box 4. University of Maryland’s Hilltop Institute – Excellence in Analytics
Paths to Partnership in Rhode Island
The experience of other states suggests that building a State University Medicaid Partnership takes time and careful consideration, but when done well can produce both high-quality work and financial savings.4 Medicaid gains a valuable research and analytic partner that can help conduct relevant, timely work to advance its mission. The university has an opportunity to engage its faculty and student expertise on areas of vital importance to the state’s health and well being.
Key contributors to the success of existing partnerships include appropriate contractual arrangements, mechanisms for sharing federal money, and opportunities to leverage non-federal funds. The creation of sustainable financial arrangements is critical to developing lasting partnerships capable of building real expertise and maximizing the use of university resources. Issues of data security, academic independence, and bias can be handled through the creation of careful interagency service agreements that define the governance and structure of the partnership.
Rhode Island is at an interesting point to consider leveraging non-governmental resources to improve its Medicaid program. The state launched a Reinventing Medicaid initiative in 2015.3 It recently announced a Health Care Workforce Transformation Project that will allow the use of federal funds to reimburse colleges and universities for existing investments in training healthcare workers.10
These initiatives could serve as the starting point for building new, impactful collaborations with institutions of higher education. Lasting partnerships that fully capitalize on the strengths of the universities and mirror what has been successful in other states would require the development of a more fully articulated partnership model with an expanded agenda and suite of services.
1. Rhode Island Executive Office of Health and Human Services (2016) Rhode Island Annual Medicaid Expenditure Report – SFY 2015, Providence, RI.
2. Patrick Anderson (2016) “R.I. Medicaid spending trends low; ‘Reinventing’ program hitting targets, state says,” Providence Journal, April 25th.
3. Anya Rader Wallack (2016). “Reinventing Medicaid – Expanding Access, Improving Care, Controlling Costs [press release],” Office of Rhode Island’s Medicaid Director, February 26th.
4. D.J. Heller, C. Hoffman, and A.B. Bindman (2014) “Supporting the needs of state health policy makers through university partnerships,” Journal of Health Politics, Policy, and Law, 39 (3): 667-677.
5. The partnership case studies draw on material from the partnerships’ websites and published reports, as well as: R. Preston, M.A. Thibodeau, D. Polakoff, J. Friedman, and M. Nolin (2012) “The dynamics of state university participation in state Medicaid administration,” Worcester, MA: University of Massachusetts Medical School.
6. Andrew F. Coburn, Paul Saucier, Vernon K. Smith, Eileen Ellis, and Charles Milligan (2007) “Improving Medicaid policy through state/university research partnerships,” Sacramento, CA: California Healthcare Foundation.
7. Preston, et al., 2012.
8. Barbara Addison, Rhode Island Executive Office of Health and Human Services (2017) Personal communication, January 12th.
9. J. Friedman and M.A. Thibodeau (2015) “Building and sustaining university-Medicaid partnerships when state governments change,” Worcester, MA: University of Massachusetts Medical School.
10. Rhode Island Office of the Governor (2016) “Better Care, Healthier People, Smarter Spending [press release],” November 28th.
Type of Research