Medicaid Managed Care – States Should Look Before They Leap (Again!) – Say Ahhh! A Children’s Health Policy Blog

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By Joel Ferber, Legal Services of Eastern Missouri and nationally recognized expert on Medicaid 

A recent article in USA Today
focused on Medicaid managed care and its implications for health reform.  Health insurance companies are clamoring
for the substantial new business that will become available when Medicaid
coverage is expanded to an estimated 16 million new individuals under the
Affordable Care Act.  Medicaid
managed care is already well-established in state Medicaid programs although a
few states (like Oklahoma and North Carolina) have moved away from capitated
managed care for alternatives such as primary care case management and medical
homes.  At the same time that they
gear up for the Affordable Care Act’s Medicaid expansion and the new health
insurance exchanges, states are also grappling with budget shortfalls and
looking increasingly to managed care to help control the costs of their
Medicaid programs. 

For example, Missouri is considering
a statewide geographic expansion of managed care for the remaining children,
families and pregnant women that still receive care on a fee-for-service
basis.   At a forum this
summer, several provider groups including the Missouri Hospital Association and
a coalition of community mental health centers, spoke out against such an
expansion.  Legal Services’
Advocates for Family Health programs reported on their uneven experience with
Missouri’s existing managed care program, including inadequate provider
networks, extreme travel distances to providers, inconsistent prior
authorization processes, and burdensome administrative practices.  They indicated that these problems
should be addressed if a geographic expansion is to go forward.  Moreover, recent reports
from state consultants Alicia Smith and Associates and the National Health Law
Program indicate less than stellar performance by Missouri’s Medicaid HMOs
while other state consultants, The Lewin Group, found insufficient State
oversight to support an expansion of Medicaid managed care. 
Finally, the State’s own Medicaid Director acknowledges that the State
has not done as well as it could have “in holding [managed care] health plans
fully accountable to provide services for people.” 

Even more troubling than a
geographic expansion of managed care is the potential expansion of managed care
to additional populations including people with disabilities to achieve
budgetary savings.  Another recent
report released by two Missouri disability advocacy coalitions documents the
many problems and pitfalls with expanding managed care to people with
disabilities as a cost-saving measure, including the challenge of developing
sufficient provider networks to meet the more intensive needs of these
beneficiaries and the significant likelihood of underservice to people with
serious health needs.  These are
significant concerns in light of states’ continuing interest in extending
managed care to these populations.

This discussion
raises concerns for both health reform and the interim period between now and
2014 when the Affordable Care Act’s Medicaid expansion kicks in.  Managed care’s inconsistent
performance certainly raises questions about the dramatic expansions of
Medicaid managed care that are anticipated under the ACA.  Of particular concern is the fact that
the new group of Medicaid eligibles (particularly childless adults) is likely
to have serious and complex health needs as the research and state experience
(in states that already cover childless adults) suggests.  Therefore, states need to carefully
consider other models such as primary care case management and “health homes”
as alternatives to expanding managed care when they expand Medicaid.  If they do turn to managed care for the
new Medicaid expansion group, then states must implement strong oversight
mechanisms (including secret shopper surveys) to ensure adequate provider
networks, and prevent improper denials of care.  In the meantime, states should be very careful about
expanding Medicaid managed care to people with disabilities to achieve
cost-savings, which could lead to rampant underservice for especially needy
individuals.  Missouri advocates
have argued for alternative models such as patient-centered medical homes
(provided for in the Affordable Care Act) and reducing long-term care costs
through more home and community based options (which are also expanded in the
ACA).  These may well be more
effective ways of dealing with State budget shortfalls than expanding managed
care to highly vulnerable populations.

The views expressed by Guest Bloggers do not necessarily reflect the views of the Center for Children and Families. If you experience trouble viewing the links to PDF files included in this blog, try hitting return after clicking on the link.

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