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

636
protocols will be enhanced through the consolidation of various areas of expertise in the
imminent HCFA reorganization, which will bring together the components responsible
for the review and approval of 1915(b) and 1115 waivers.
OIG Recommendation 3
HCFA, in its ongoing reviews of state <strong>Medicaid</strong> agencies, should scrutinize possible
adverse effects of managed care expansion on the performance of established fee-forservice
functions.
HCFA Response
We partially concur. HCFA is concerned about the impact of managed care on the health
systems within a state. Hopefully, the first two report recommendations would, however,
alleviate the need for heavy scrutinizing of those effects. Also, as the report points out,
HCFA and states are already doing a considerable amount of monitoring. HCFA and the
APWA have a technical advisory group addressing third-party liability. Ile Program
Integrity Group is monitoring Suveijance and Utilization Review Subsystems (SURS).
And, HCFA uses encounter data to review drug utilization. While RO forums should
address these concerns, it is the direction of this Administration to set guidelines, but not
heavily regulate state activities. However, past state performance in these areas in a
managed care setting could be factors in approving section 1115 waivers and other
programs.
Additional Comments
1. We suggest the States that are discussed in the report be given the opportunity to
comment on the draft report.
2. Rather than referencing danger signs concerning third party liability, SURS, and
drug utilization review, we suggest referring to these items as concerns.
2