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

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<strong>Medicaid</strong>: Spending Trends
and the Move to <strong>Managed</strong> <strong>Care</strong>
<strong>Medicaid</strong> is an entitlement program providing payment for
medical services to as many as 37 million low-income people
who are aged, blind, disabled, or members of families with
dependent children. It has three distinct features: joint federalstate
financing, state administration in accordance with broad
federal standards, and eligibility tied to standards for other cash
benefits. Thus, although general eligibility and coverage
standards are set at the federal level, each state designs and
administers its own <strong>Medicaid</strong> program. As a result, state
programs vary considerably in eligibility requirements, service
coverage, utilization limits, provider payment policies, and use
of managed care.
During the 104th Congress, both the Congress and the
Administration proposed changes to the <strong>Medicaid</strong> program to
limit growth in spending and permit more state innovation in
service delivery and payment. Their proposals represented two
general approaches to restructuring the <strong>Medicaid</strong> program:
block grants and limits on per capita expenditures. Although
both proposals provided more flexibility to states in running the
<strong>Medicaid</strong> program, there were major differences. The
congressional proposal would have made more substantial
changes and deeper cuts than the Administration's, which
retained more aspects of the current program. A later proposal
made by the National Governors' Association adopted
elements from both approaches. Although various versions of
<strong>Medicaid</strong> legislation were passed by one or both houses of the
Congress, no proposal became law. The enactment of welfare
reform, however, does affect the <strong>Medicaid</strong> program. Because
<strong>Medicaid</strong> eligibility historically has been linked to welfare
eligibility, federal and state changes in welfare law may affect
access to <strong>Medicaid</strong> benefits.
Chapter 20
This chapter includes:
* The financing and
structure of the
<strong>Medicaid</strong> program
* <strong>Medicaid</strong> spending
trends
* Analysis of <strong>Medicaid</strong>
managed-care
enrollment
* Lessons from
implementation of
managed-care programs
Physician Payment Review Commission