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

Results in Brief
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<strong>Medicaid</strong> has traditionally been a fee-for-service program, meaning that
doctors, hospitals, and other providers are paid based on the number and
type of services they provide. States have relatively wide latitude in
structuring <strong>Medicaid</strong> programs, including making prepaid care available to
those who wish to enroll. But states must obtain federal approval to
require prepaid plan enrollment or to restrict individuals to specific plans.
This approval is designed to help ensure that everyone who is eligible has
access to care.
Serving disabled beneficiaries through <strong>Medicaid</strong> managed care poses
complex, new challenges to the states. To date, few states have significant
experience with prepaid care for disabled <strong>Medicaid</strong> beneficiaries, many of
whom have chronic conditions that require ongoing and costly specialty
care. Of the six states that require some or all of their disabled population
to enroll in prepaid care, only one program is more than 3 years old.
Eleven others have voluntary programs enrolling a small percentage of
disabled beneficiaries. However, because of continued concern about cost
containment, 13 more states have submitted proposals to enroll disabled
beneficiaries in prepaid care, with 12 of them intending to make
enrollment mandatory.
One of the challenges for states is developing both the service networks
and the necessary assurances that the health care needs of disabled
beneficiades are being met appropriately. However, about half of the
states tend to rely on mechanisms such as the freedom of disabled
individuals to disenroll from or switch prepaid plans or on their access to
the states' and plans' complaint and grievance systems to help ensure
quality of care. While analyses of patterns of disenrollment or complaints
can provide meaningful information, in the aggregate they may not be
sufficient to detect systemic deficiencies in care for disabled beneficiaries.
In contrast, states that either mandate enrollment or provide small,
voluntary programs focused exclusively on disabled beneficiaries tend to
be furthest along in developing asurances that appropriate, quality care is
available to them. Examples of such actions include requiring health plans
to designate advocates to help coordinate the services disabled
benefidaries receive and to provide access to specialists specifically
trained in care for disabled individuals.
A second challenge for states is developing and administering a managed
care system for disabled beneficiaries that is financially sound. However,
few states have ventured beyond current rate-setting approaches that base
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