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

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<strong>Managed</strong> care systems/plans must provide enrollees with a choice of plans or offer an affordable
point of service option. However, the availability of a point of service option must not mean that
managed care plans do not have the responsibility to provide appropriate care or pay for an
out-of-network referral if the managed care plan cannot provide a service.
Appropriate Definition of Medical Necessity
For individuals with disabilities, the term "medical necessity" must be defined in the broadest
manner possible to ensure access to all appropriate services and supports that can enable a person
with a disability to function in the community as independently as possible.
Equitable Financing Mechanisms
Any financing mechanism that may directly or indirectly constrain access to appropriate services
must be prohibited.
<strong>Managed</strong> care systems/plans must not include financial incentive procedures that directly or
indirectly restrict access or deny adequate and appropriate services. Systems/plans that contain
incentives for individual providers regarding utilization of services must not link financial
rewards/penalties with individual treatment decisions.
<strong>Managed</strong> care systems/plans must have "stop-loss" provisions or limits to risk that are mutually
agreed upon by providers and plan sponsors when provider groups (particularly small groups)
assume financial risk for the cost of specialty care, ancillary services, and/or hospital care.
Additional amounts of provider time or effort required by people with disabilities or chronic
illness must be compensated commensurate with the additional effort required, either as a
component in the capitation agreement or through some mutually agreeable financial arrangement.
<strong>Managed</strong> care systems/plans must collect utilization data over periods of time sufficient to identify
patterns of risk. Risk sharing arrangements across a group of providers must also be based on the
perfoanance of the provider group over periods of time.
Consumers Benefit from Cost Savings
<strong>Managed</strong> care systems/plans must be designed to ensure that cost savings realized through the
more efficient administration of services are invested primarily in providing services and supports
and reducing waiting lists for eligible beneficiaries.
Appropriate Services and Benefits Available
<strong>Managed</strong> care systems/plans must offer a comprehensive benefits package that meets the needs of
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