Novu Health Engagement Blog

How to establish a successful Medicaid incentive program: 4 tips

Novu Health

It’s proven: Incentives have been shown to influence healthy behavior, improve health outcomes and reduce healthcare costs.


That’s why top Medicaid plans are increasingly using financial incentives to encourage members to engage in high-value healthcare activities—from smoking cessation to regular preventive screenings and disease management.

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So, what can we learn from these real-life incentive programs getting it right? Successful Medicaid incentive programs all have four characteristics in common. They:

  1. Heavily advertise the program and its benefits,
  2. Pay attention to beneficiary characteristics,
  3. Establish a simple benefit structure, and
  4. Incorporate a rigorous evaluation component. 

 Th Guide to Medicaid Member Engagement | Infographic


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Each of these four tactics should be grounded and guided by behavioral economics, a field exploring the psychology behind an individual’s economic decisions. After all, how can you drive a member to engage in high-value healthcare activities if you don’t know how to motivate them to take action? Health plans are increasingly using the concepts of behavioral economics to account for—or capitalize on—members’ biases to increase the likelihood of motivating healthy behavior and better outcomes.


For example, behavioral economic research suggests people have a “present bias,” meaning they have a stronger reaction and assign more value to immediate gratification than delayed feedback. Applying this concept to an incentive program, this means it’s important to offer members activities they can complete now—rather than in the future—and offer rewards quickly upon completion of the activity.


For more Medicaid insights and engagement best practices, download our e-book: The guide to Medicaid member engagement: Proven strategies and best practices from real-world programs.

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Looking for more? Check out how NovuHealth helped one Medicaid plan close gaps in care and reduce churn by leveraging incentives and employing a targeted member engagement program.


Reach out if you’d like to learn more about how we tailor rewards and engagement solutions to your member population using the latest in behavioral health science and healthcare data analytics.



About NovuHealth

NovuHealth is the leading healthcare consumer engagement company, offering reward and incentive programs that improve consumer health and plan performance. The company leverages its deep industry and regulatory expertise and applies proven loyalty and data science strategies to motivate high-value consumer behaviors. Headquartered in Minneapolis, NovuHealth works with more than 35 health plans serving more than 15 million consumers across all 50 states. To learn more, visit us at