Medicaid Managed Care - U.S. Senate Special Committee on Aging

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gatekeeper, and we also wondered what were the incentives for this
case manager to really be an effective gatekeeper. Now that we
have created an incentive through capitation for the organization
to in some sense be the gatekeeper, and we are asking the organization
to hire a case manager to advocate for access to patients, the
question is who is that case manager going to be accountable tothe
organization or the patient. There is a tension there, and it is
not clear how the incentives work out.
Besides a case manager for individuals, there is also the issue of
ombudsmen and grievance appeal procedures that exist within
managed care organizations. Each of these needs to be emphasized,
and the awareness of the information about these procedures needs
to be widely disseminated so that individuals have the knowledge
to know how they can address concerns or complaints about their
services.
The fourth area that I think is important is the issue of stratified
oversight. What we are talking about with people with special
needs is a very, very small segment of the population. To look at
managed care organizations' performance in terms of medical reviews
and analyses of encounter data, satisfaction surveys, and
looking at that through a random sample is not going to capture
enough of the individuals with special needs to be able to know
whether those individuals are being well-served. We need to have
special samples of those kinds of individuals.
The last area that I think is important is that we need to be concerned
about how we pay our managed care organizations. Pure
capitation creates the strongest incentives to control the use of
services and to profit from not delivering services. Since we are not
certain about what is the appropriate level of services, it may be
much better to think about dampening the incentive for
underservice by establishing limits on the amount of profit that organizations
can make from serving persons with special needs as
well as protecting those organizations from the adverse selection
that may occur w en too many individuals with special needs join
their organization and the cost of serving them exceeds the capitation
payments.
We need to do all of these things, and it is important that we
learn from all of these things. It is an expensive thing to tailor a
program and to be attentive to how well it is working. What we are
hoping is that in the future, we will have a much better knowledge
base as to what works and what does not work, so that we can design
programs that have more structure to them than we can
today, but we can still have confidence that they are going to operate
effectively.
Thank you.
Ms. CHRISTENSEN. Thank you, Bill.
Welcome, Barbara.