States embracing Medicaid managed care

Washington -- A nationwide survey of Medicaid managed care programs found that access to care under the plans is a perceived problem but that many states use managed care as a vehicle to coordinate care.

Managed care includes Medicaid primary care case management programs and comprehensive and single-benefit Medicaid health plans, both nonprofit and for-profit. Of Medicaid's 54 million beneficiaries in 2010, half were enrolled in a managed care plan. An additonal 16% were in a primary care case management program, and the remaining 34% were in Medicaid fee-for-service, according to the survey, released Sept. 13 by the Kaiser Family Foundation and Health Management Associates, a research and consulting firm. The report is based on information valid as of October 2010.

Medicaid directors said managed care is an attractive option because it enables states to improve accountability and restructure the delivery system to ensure access and measure quality better, said Vernon Smith, PhD, managing principal of Health Management Associates.

In 2010, all but three states -- Alaska, New Hampshire and Wyoming -- had managed care programs. Thirty-six states had contracts with private Medicaid managed care plans, and 31 operated primary care case management programs.

But access to care remains an issue in many states. Of states with Medicaid managed care plans, 25 reported that Medicaid beneficiaries sometimes experience access problems, said Julia Paradise, MPH, associate director with the Kaiser Commission on Medicaid and the Uninsured and a report co-author.

"In particular they cited dental care, mental health providers, and pediatric and other specialists as areas where some encounter difficulties," she said.

Still, most state officials said risk-based managed care improved access compared with traditional fee-for-service, Paradise said. The survey did not ask states directly about access to care in Medicaid fee-for-service.

Less clear is whether the 36 states that contract with managed care plans will have the capacity to handle the additional 16 million people who will gain Medicaid coverage beginning in 2014, Smith said. Of the 21 states that answered a question about their ability to do so, 20 said they have the capacity.

Many states also are seeking to control Medicaid spending through care coordination. Forty-three reported having initiatives to reduce inappropriate use of emergency departments by Medicaid enrollees, such as 24-hour nursing hotlines, enrollee education, and case management for frequent visitors. Also, 39 states have a formal or informal medical home program through a private Medicaid plan or the state's primary care case management program.

A minority of states limit administrative spending by Medicaid managed care plans, according to the survey. Eleven states require managed care plans to spend between 80% to 93% of funding on subscribers' health care. Three other states planned to institute such medical-loss ratios.

An additional 19 states pay managed care plans based on performance, such as withholding a portion of the capitated rate to be earned back by meeting performance standards.

The report is available online (link).