Multi-state Government Programs Focused Health Plan

Driving Results through Financial Performance Management in Managed Medicaid

A health plan’s Managed Medicaid business was financially underperforming, thus limiting their ability to invest in new capabilities for members.

Nolan Objective

We applied the Nolan Financial Performance Management approach and rapidly identified several areas that improved financial performance, resulting in additional services for the Plan’s members. Key drivers we analyzed:

  1. “Rate Shaping vs. Rate Taking”: The plan was unaware of the significant number of encounters that had not been submitted to the State – which kept their rates artificially low. We helped clear the backlog of encounters that were not accepted and processed by the State, and we corrected the underlying issues that were prohibiting the encounters from being accepted. We implemented new and effective management capabilities so they could actively manage the encounter submission process moving forward. This resulted in millions of dollars in previously not-accepted encounters being submitted and accepted by the State on an annual basis.
  2. Waiver Programs: The plan had members eligible for SSI benefits who were not receiving them. We helped build and implement the capability to actively review members to identify SSI eligibles and help those members through the application process. This resulted in several millions in new revenue as well as providing much needed benefits to their members.
  3. Unit Costs: The plan was overpaying for certain DME (durable medical equipment) and other ancillary benefits. We helped them analyze unit costs, identify contracting changes that could bring costs in alignment with industry norms, and develop the capability to monitor unit costs on an ongoing basis. This identified approximately $30M in annual savings while improving benefits to members.


Our work created an immediate impact to the Plan’s top and bottom lines, enabling them to achieve their goal of providing more services to their members.

The overall results addressed and improved the three Key Drivers in the health plan, including:

  • Program Payments: Members started receiving benefits (e.g. waivers)
  • Medical Expense: Reduced medical expense through unit cost improvement
  • Administrative Expense: Improved administrative capability/capacity to support other programs (e.g. waivers) by reducing the cost to perform these activities

The benefits continue as the plan now has the capability to manage key financial performance drivers on an ongoing basis.