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

Objectives, Scope,
and Methodology
.
c..
Bud.
336
'perverse incentives' inherent in a prepaid managed care approach.' 8
While incentives in a fee-for-service system may encourage a provider to
deliver too many services, prepaid programs may encourage health plans
to deliver fewer, or less expensive, services than enrollees need, such as
using a physical therapist skilled in sports medicine rather than in specific
disabilities such as spinal abnormalities.
The Chairman and Ranking Minority Member of the Subcommittee on
<strong>Medicaid</strong> and Health <strong>Care</strong> for Low-Income Families of the <strong>Senate</strong>
<strong>Committee</strong> on Finance asked us to exanine (1) the extent to which states
are implementing prepaid <strong>Medicaid</strong> managed care for disabled
beneficiaries and (2) what steps states have taken to safeguard the
interests of the three major stakeholder groups-disabled beneficiaries,
prepaid health care plans, and the government-with a focus on quality
assurance and rate-setting mechanisms. On the basis of discussions with
subcommittee staff, we focused our review on the delivery of primary and
acute medical services. We also focused our work on prepaid managed
care programs-thus excluding those types of managed care that are not
risk based-because prepayment has the potential to result in
underservice to enrolled members.
To identify states with <strong>Medicaid</strong> managed care programs for disabled
beneficiaries, we reviewed HCFA documentation and interviewed national
<strong>Medicaid</strong> experts, including officials at organizations such as the National
Academy for State Health Policy and the <strong>Medicaid</strong> Working Group. From
the 17 states identified as having <strong>Medicaid</strong> prepaid managed care
programs for their disabled population,' 9 we obtained information on a
wide range of topics, including quality-monitoring activities and
rate-setting methodologies. We interviewed officials in these states to
obtain their views on problems they had encountered serving disabled
individuals in prepaid managed care plans and ways they had gone about
solving them.
On the basis of what we learned about the states as a whole, we selected
three states-Arizona, Oregon, and Massachusetts-for additional study.
Arizona and Oregon have relatively long-standing programs that provide a
eUndr pep.t -agd
p-tdia.eot-e. to .e,,
me., plte- are gfnne
eao the
lbk--ht , deifcoveI
- hn c .jttit sd f- CO
U.0 -atr
1ey, they ya
keep the e if the ot f proldeg -eec is les tht the U.0 teed in -pa
bhe 17 ,.e - Axin Caiffota, Cotondo, Del-t. th DIot Or Cotlki%, Ftrottd
Ma. M.. h-, dchlga New Jetey, Ohio, tieto, Petnnyttl, Te , MA,
Voigia, .td V. tts-in.
P.Se 20
e AHERS--IXS Rediid Wed cow roe tle DiMled