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

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The market participation might improve if Medicare funding streams are added to the
capitation since Medicare rates are higher than <strong>Medicaid</strong> rates. This would best be accomplished
by having <strong>Medicaid</strong> and Medicare contribute separately and jointly to the premium rather than
trying to merge the funding streams. Separate contributions to the premium would present less
risk to the Medicare trust funds. Specifically, Medicare remains liable for Medicare services to
the dually eligible population. If beneficiaries fail to get services from plans, Medicare may end
up paying twice for the same services - once in the capitation te the plan and again to pay for
those services in the fee-for-service sector if the plan fails to perform. This risk is minimized if
Medicare is-getting direct accountability from the plan and-is paying for care only in federally
qualified plans. In addition, this payment approach could be used as a mechanism to encourage
federally qualified managed care plans to participate in the state <strong>Medicaid</strong> markets, improving
the market for <strong>Medicaid</strong>-only programs.
In attempting to create better coordination of care and a continuum of care, it is
important to recognize that the market may not yet be ready to absorb some of the policy changes
considered desirable. Accordingly, substantial acceleration of the enrollment of the dually
eligible population into managed care cannot realistically occur until a greater consensus is
reached regarding the network and administrative capabilities required to provide and coordinate
adequate clinical care. Further work on methodologies for measuring performance and tracking
outcomes may also assure that patients benefit from the transition from fee-for -service care
from traditional providers to the managed care system. -While Medicare funding may be essential
to attracting plans to this market, assuring administrative and financial coordination to maintain
acccountability to the federal taxpayer remains problemmatical in most states. Given the tenative_
nature of this market, we believe that slow and careful expansion offers the best option for dually