View all blogs

New Jersey Health Care Quality Institute Issues “Medicaid 2.0 Blueprint for the Future”

This week’s review comes to us from HMA Principal Karen Brodsky and Research Assistant Anh Pham, both of our New York City office. Anh and Karen provide a review of the “Medicaid 2.0 Blueprint for the Future” issued by the New Jersey Health Care Quality Institute (Quality Institute). Funded by The Nicholson Foundation, the Quality Institute embarked on a year-long project convening a wide variety of stakeholders in New Jersey with the goal of redesigning and modernizing the State’s Medicaid program. The report is a culmination of 24 recommendations to promote the efficient delivery of quality healthcare services to New Jersey’s most vulnerable populations.


New Jersey’s Medicaid program covers 1.7 million residents and 46 percent of the children in the state. It operates with a budget of approximately $15 billion or close to 20 percent of the state’s budget. In the last few years the state implemented Medicaid Expansion, which added over 500,000 additional lives to Medicaid enrollment. As a Medicaid managed care application state, meaning contracts are not competitively bid, 95 percent of its Medicaid enrollees receive their benefits from one of five managed care organizations. The Division of Medical Assistance and Health Services (DMAHS) oversees the Medicaid program and has made improvements under the 1115 waiver, such as implementing managed long term services and supports (MLTSS) for 32,500 older beneficiaries and individuals with physical disabilities. It has also managed the implementation of a Medicaid Accountable Care Organization (ACO) demonstration, integrated care and aligned financing for dual eligible beneficiaries, and a new Medicaid Management Information System.

While the report recognizes the strides the Medicaid program has made in recent years under the comprehensive 1115 Waiver, it also seeks to address program limitations concerning outdated technology, misaligned incentives, and lack of access to timely and accurate data, which can affect the delivery of quality care.


This project assigned healthcare experts to one of five Transformation Teams: 1) Access and Quality, 2) Behavioral Health Integration, 3) Eligibility and Enrollment, 4) Purchasing Authority, and 5) Value Based Purchasing. Over ten weeks, each of the teams met to assess the problems of each area and make consensus recommendations.

Modern Foundation

Given the outdated governing structure of New Jersey’s Medicaid program, the report provides recommendations to update the infrastructure of the program in a way that promotes higher quality, efficiency, and effectiveness. These recommendations include:

  1. establishing a New Jersey Office of Health Transformation;
  2. increasing transparency of Medicaid data;
  3. improving eligibility processing;
  4. expanding use of telehealth services;
  5. establishing a unified single license system for integrated health;
  6. upgrading Medicaid regulations and the managed care contract;
  7. and reducing fraud, waste, and abuse.

Foundational Medicaid Reforms

Additionally, the report stresses the importance of implementing pending State reform initiatives to enhance administrative function of the system. These recommendations include:

  1. implementing a statewide universal provider credentialing system;
  2. improving the accuracy of provider network directories; and
  3. standardizing Medicaid quality measures.

Upgrades to the Medicaid Model

Due to New Jersey’s fragmented healthcare system, the report makes recommendations to advance the integration of care. These recommendations include:

  1. integrating physical, mental health and substance use disorder service delivery;
  2. establishing Medicaid coverage for long-term residential services for substance use disorders; and
  3. reconvening the Behavioral Health Integration Advisory Council.

Financing Reform

Taking into consideration the State’s current fiscal situation and the potential loss of federal funding, the report makes two sets of recommendations: one set of recommendations leveraging the purchasers’ powers and another leveraging value-based purchasing and alternative payment models. These recommendations include:

Purchaser Power:

  1. maximizing pharmaceutical cost savings; and
  2. enhancing MCO performance incentives.

Value Based Purchasing and Alternative Payment Models:

  1. initiating Episode of Care demonstration;
  2. expanding Patient Centered Medical Home statewide;
  3. developing clinically integrated networks of care for children;
  4. developing Patient Centered Medical Home for medically complex children; and
  5. establishing a Value-Based Purchasing Advisory Council.

Path to Population Health

The last set of recommendations seek to address the long-term health of the Medicaid population. These recommendations include:

  1. improving maternal and family health;
  2. evolving the Medicaid ACO demonstration;
  3. advancing a Next Generation Delivery System Reform Incentive Payment (DSRIP) program; and
  4. improving end of life care.


The Quality Institute anticipates that implementing these recommendations could save New Jersey’s Medicaid program between $100-300 million of New Jersey’s projected annual direct spending of $11 billion. With the support of The Nicholson Foundation, the Quality Institute will continue to engage stakeholders to transform New Jersey’s Medicaid program.

Link to Report, More Information

[text-blocks id=”2075″ slug=”full-width-cta-hma-weekly-roundup”]