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

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

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Therefore, states are faced with the challenge of first trying to define what services and structures are needed and then trying to translate these definitions into a contract. The limited experience of plans in caring for these types of populations - in contrast with the traditional 77 medical system who has cared for them almost exclusively - would indicate that these standards should not simply be left to plan discretion. The early stage of evolution for this process is clearly reflected in the contracts themselves. For example, even where diabled beneficiaries are technically eligible, we can see in the attached table that language on inclusion of specialists in the provider networks is provided in only a minority of state contracts. Indeed, network requirements tend to focus on primary care providers, pediatricians, and maternity care providers - providers appropriate for the AFDC population. Similarly, provisions dealing with transition arrangements for people in on-going treatment, access to specialists, or special communication services for diabled people are relatively rare. Virtually all contracts specifically exclude long-term nursing home care from plan services. It is important to note that these problems do not affect only dual eligibles but affect all people with complex health care needs. A disabled child enrolled in a ong>Medicaidong> managed care plan who is not eligible for Medicare needs the same network sophistication as-a-dually eligible adult. Our initial review of 1996 contracts indicates that some states are moving more aggressively to enroll disabled populations. Florida, for example, now specifically incorporates a frail elderly program in its managed care system. Massachusetts and Minnesota are also engaged in a targeted effort to include the chronically ill into their managed care programs. However, these states are the exception, not the rule.

78 Plans have not shown a willingness to enter this high-risk market for relatively low capitation rates. Setting an appropriate risk-adjusted premium remains a major challenge and it seems unlikely that the integration of the dual eligible population could be accomplished purely on the basis of capitation. Some blending of capitation with stop/ loss provisions and fee-for- service payment would likely have to occur. Other financing problems are likely to have a chilling effect on the evolution of managed care for this population as well as for the AFDC population. Specifically, the de-linking of welfare and ong>Medicaidong> will probably cause an actuarial worsening of the ong>Medicaidong> risk pool. This will occur because instead of relatively healthy families automatically becoming enrolled in ong>Medicaidong>, people will tend to be enrolled only as they become ill or. seek services. As the risk pool worsens while the capitation payment remains stable, the ability to attract plans will decline. A per capita cap on ong>Medicaidong> payments would merely intensify this effecL This would occur for two reasons. First, the cap would not reflect the actuarial needs of the worsening risk pool since the cap is based on the existing composition of the risk pool. Secondly, the cap's baseline as proposed is drawn from a period of unusually low ong>Medicaidong> spending, unlike the welfare cap which is basedn a period of high welfare spending, giving states a much more comfortable margin with which to implement new programs during a period of strong economic growth. The combined effect of worsening risk pools and the implementation of a ong>Medicaidong> per capita cap is the most effective way to bring any further evolution of the ong>Medicaidong> managed care market to a screeching halt. Efforts to coordinate care for dual eligibles even in the traditional health care sector will become much more difficult under these financial constraints.

Therefore, states are faced with the challenge of first trying to define what services and<br />

structures are needed and then trying to translate these definiti<strong>on</strong>s into a c<strong>on</strong>tract. The limited<br />

experience of plans in caring for these types of populati<strong>on</strong>s - in c<strong>on</strong>trast with the traditi<strong>on</strong>al<br />

77<br />

medical system who has cared for them almost exclusively - would indicate that these standards<br />

should not simply be left to plan discreti<strong>on</strong>.<br />

The early stage of evoluti<strong>on</strong> for this process is clearly reflected in the c<strong>on</strong>tracts<br />

themselves. For example, even where diabled beneficiaries are technically eligible, we can see in<br />

the attached table that language <strong>on</strong> inclusi<strong>on</strong> of specialists in the provider networks is provided in<br />

<strong>on</strong>ly a minority of state c<strong>on</strong>tracts. Indeed, network requirements tend to focus <strong>on</strong> primary care<br />

providers, pediatricians, and maternity care providers - providers appropriate for the AFDC<br />

populati<strong>on</strong>. Similarly, provisi<strong>on</strong>s dealing with transiti<strong>on</strong> arrangements for people in <strong>on</strong>-going<br />

treatment, access to specialists, or special communicati<strong>on</strong> services for diabled people are<br />

relatively rare. Virtually all c<strong>on</strong>tracts specifically exclude l<strong>on</strong>g-term nursing home care from<br />

plan services.<br />

It is important to note that these problems do not affect <strong>on</strong>ly dual eligibles but affect all<br />

people with complex health care needs. A disabled child enrolled in a <str<strong>on</strong>g>Medicaid</str<strong>on</strong>g> managed care<br />

plan who is not eligible for Medicare needs the same network sophisticati<strong>on</strong> as-a-dually eligible<br />

adult.<br />

Our initial review of 1996 c<strong>on</strong>tracts indicates that some states are moving more<br />

aggressively to enroll disabled populati<strong>on</strong>s. Florida, for example, now specifically incorporates<br />

a frail elderly program in its managed care system. Massachusetts and Minnesota are also<br />

engaged in a targeted effort to include the chr<strong>on</strong>ically ill into their managed care programs.<br />

However, these states are the excepti<strong>on</strong>, not the rule.

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