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

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states win need to seek approval from HCFA to waive one or more
provisions of <strong>Medicaid</strong> law.
States have three options for using capitated managed care plans in their
<strong>Medicaid</strong> programs-one that requires no waiver of <strong>Medicaid</strong> statute and
two that do. Since the late 1960s, states have had the option-with no need
for a waiver-to contract with prepaid managed care plans to deliver
health care services to <strong>Medicaid</strong> beneficiaries, provided certain conditions
are met. One is voluntary enrullment Beneficiaries must ordinarily be
permitted to disenroll at any time and return to the <strong>Medicaid</strong>
fee-for-service programn. Other conditions relate to such matters as the
kinds of plans that can participate: They must be federally qualified or
state-certified RMos," have a mix of enrollment that is no more than
75 percent <strong>Medicaid</strong>/Medicare enrollees, and engage in a range of quality
assurance activities.
The other options for using managed care exist under waiver authorities
granted to the Secretary of HHso These authorities allow the Secretary to
waive certain statutory requirements-including the beneficiaries'
freedom to choose from among participating providers-so that a state
can develop alternative methods of service delivery or reimbursement
These waivers are of two general types-programs 1 and demonstration 16
Table 1.2 compares various characteristics of the two types of waivers.
Although managed care approaches and mandated enrollment (that is, a
program that requires <strong>Medicaid</strong> participants to select among managed care
approaches) can be authorized under either type of waiver, waiving the
federal regulations concerning the types and enrollment mix of prepaid
organizations can only be done under a demonstration waiver.
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