What Do Managed Care Consulting Firms Do?

State by state, Medicaid regulations vary. In places where it has been privatized, managed care consulting firms can help organizations serve their beneficiaries more efficiently, and more cost effectively.

What Do Managed Care Consulting Firms Do

Defining Managed Care

A managed care organization (or MCO) works with state Medicaid services to streamline processes with beneficiaries. MCOs are for-profit businesses that specialize in administering care and following state regulations. They are paid by the state, with the goal being to save government funds by not requiring as many full-time staff members.

The Role of Consulting Firms

Managed care consulting firms serve as a go-between from the MCOs to their vendors. These may include physicians, specialists, medical and pharmaceutical suppliers and more.

Analytic Tools

Managed care consulting firms use financial analytic tools to help MCOs determine how best to set their budgets and streamline their processes and staff. They also apply those tools to determine the fair market value of the products and services their vendors supply.


Perhaps the most crucial function of managed care consulting firms is their ability to negotiate on behalf of the MCO. Once they have applied their analytics to the client’s area, they can work with them on a plan to make money-saving deals with vendors and providers. The consulting firms employ expert negotiators and advisors who work on behalf of the MCO to get the best possible pricing.

In many cases, they may be able to leverage their relationships with other MCOs to get bulk or discount pricing. If they have a presence that covers several states, and work with national vendors, they may also be able to secure volume pricing in exchange for business they bring in.

While the concept of subcontracting Medicaid to MCOs may be a new one, the idea of employing consulting firms to help with that process just makes good financial sense.

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