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

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mary care physicians as gatekeepers to ensure that services are
both appropriate and necessary and to avoid the use of unnecessary
specialty care, as well as the component of the managed care
system where we pay managed care organizations with a capitated
payment which provides an incentive to both limit services and creates
concerns about under-service.
We need to understand what kinds of implications these two
principal features of managed care have for populations with special
needs. One of the things that came out of the panel 2 weeks
ago was that the primary care model may not be the best model
for persons with special needs, and it suggested that there are at
least four areas that we need to address as we think about moving
individuals with special needs into managed care arrangements.
First of all, we need to ensure that there is an appropriate provider
network established for such individuals. Second, we need to
ensure that the rates being paid to plans are set accurately, to both
fairly compensate the plan and reduce the undesirable incentives
to inappropriately service individuals. Third, we need to come to an
agreement on what should be the scope of coverage, given that the
services needed by such individuals may extend beyond what the
managed care organization is going to provide. Finally, we need to
know how we can hold plans accountable for ensuring that the individuals
that have been assigned to them are receiving appropriate
and adequate care.
I'd like to comment mostly on the first three today. I think that
on the subsequent panels on quality and outcomes as well as State
activities, we will also be addressing the fourth in more detail, although
I think my colleagues will also be addressing the fourth. So,
that with some overlap, I am going to limit myself to the first
three.
As I said, the last panel indicated very strongly that we need to
have for individuals with special needs very good access to specialty
care and even subspecialty care, and that that may be
counter to the normal model of managed care, where one sees a
primary care physician as the access point for all other services.
This does not seem like an insurmountable problem. These are individuals
who have conditions that are chronic; they are going to
be conditions that they have for their full lives. One could imagine
that a managed care organization could screen an individual, identify
their needs, and assign them to a specialist as their primary
care physician.
However, there are a couple of drawbacks to that from the plan's
perspective. One is that plans' ability to control cost not only comes
from effective utilization review, but it comes from an ability to negotiate
with physicians and other providers to get discounts in exchange
for providing a significant volume of patients. Also, it involves
a much broader array of specialists. <strong>Special</strong>ists who are
going to serve very few patients really takes away a lot of the leverage
that plans may have in negotiating with physicians.
The other disadvantage from the perspective of a plan is that
having a specialist who is very good at dealing with a particular
type of special need can often be a magnet for people with those
special needs to be attracted to that plan. That raises the issue of
whether the plan is going to be fairly compensated if it actually has