It could get easier to integrate new tech with notoriously hard-to-penetrate Medicaid programs

The news: California-based Medicaid-provider enablement company Waymark emerged from stealth mode with a $45 million Series A funding round. It plans to scale its startup that provides primary care practices with trained community health workers and workflow management software—both of which should move the needle on value-based care for Medicaid patients, per Forbes.

Why it’s worth watching: There aren’t many health tech startups tackling the Medicaid population since it’s a difficult business model to work with—namely due to poor patient engagement and reimbursement barriers.

• For example, it’s difficult to maintain a long-term primary care engagement with Medicaid alone. Many patients are always coming on and off Medicaid, since eligibility is determined by income rather than age (like Medicare).
• Plus, Medicaid reimburses at a far lower rate than a program like Medicare Advantage (MA), which has brought in high revenues for MA-focused startups like Oscar Health and Clover Health.

A key differentiator: Unlike other tech-focused Medicaid providers like Cityblock Health, Waymark doesn’t plan on building its own clinics. It’s instead focused on partnering with existing Medicaid programs to provide the tech backbone, which means it won’t directly deal with usual Medicaid barriers like reimbursement.

What’s next? The Medicaid population is massive—which means the few startups touting Medicaid patient engagement solutions could be attractive to insurers seeking improved health outcomes.

• Over 80 million individuals are currently enrolled in Medicaid programs, a figure which climbed dramatically during the pandemic.
• Nearly 10 million people enrolled in Medicaid coverage between February 2020 and January 2021 alone, marking a 13.9% increase, per CMS data.

Insurers with Medicaid Managed Care programs like Centene and Medicaid insurers like Molina Healthcare are likely on the hunt to boost member engagement among their heftier member populations.

• This makes entrants like Waymark and CityBlock Health attractive partner targets, since they could use their community network to help Medicaid beneficiaries better manage their costly chronic conditions like heart disease and diabetes, for instance.
• Over 67% of diabetes care is funded by government programs like Medicaid and Medicare, per the American Diabetes Association.
• A startup like Waymark could partner with a Medicaid Managed Care program in California to connect its patients to community workers that will provide insulin education to better manage a patient’s diabetes, for instance.