A comparison of capitated and fee-for-service Medicaid reimbursement methods on pregnancy outcomes.

OBJECTIVE: To determine if the payment method influenced the likelihood of selected obstetrical process measures and pregnancy outcome indicators among Medicaid women. DATA SOURCE/STUDY SETTING: Data from the live birth certificates computer file for 1993 from the State of California. The computer files contain information about the demographic characteristics of the mother, her medical conditions prior to delivery, medical problems during labor and delivery, delivery method, newborn and maternal outcomes, and expected principal source of payment for prenatal care and for hospital delivery. STUDY DESIGN: The study sample consisted of singleton live births to women in the California Medi-Cal program residing in one of two counties in which a mixed-model managed care plan was the method of reimbursement or in one of three counties in which fee-for-service was the payment method. The study and control counties were matched in terms of geographic proximity and sociodemographics. PRINCIPAL FINDINGS: Among Medi-Cal women, the likelihood of low birth weight (LBW) was lower in the capitated payment group than in the fee-for-service payment group even when controlling for maternal and newborn characteristics and adequacy of prenatal care. There was no difference in either the adequacy of prenatal care, the cesarean birth rate, or the likelihood of adverse pregnancy outcomes other than LBW between the two payer groups. CONCLUSIONS: Results of this "natural experiment" suggest that enrollment of pregnant Medi-Cal beneficiaries in capitated healthcare services through a primary care case management system in a county-organized health system/health insuring organization can have a beneficial effect on low birth weight and provide care comparable to a fee-for-service system.     

A comparison of Medicaid and non-Medicaid obstetrical care in California

The use of prenatal care and rates of low birth weight were examined among four groups of women who delivered in California in October 1983. Medicaid paid for the deliveries of two groups, and two groups were not so covered. The analyses suggest that longer Medicaid enrollment improved the use of prenatal care. The association between prenatal care and birth weight was less clear. For women under Medicaid, measures of infant and maternal morbidity, hospital characteristics, and Medicaid eligibility were all statistically related to charges, payments, and length of stay for the delivery hospitalization.     

Medicaid managed care in Chicago: changes in utilization

In 1993, Illinois implemented Healthy Moms/Healthy Kids (HM/HK) in Chicago, a Medicaid managed care program for pregnant women and children. This study examines changes in immunizations for children (n = 134,072), prenatal care use for pregnant women (n = 5,151), and inpatient stays for mothers (n = 5,151) and newborns (n = 2,699) under the HM/HK program as compared with fee-for-service Medicaid in 1992 and 1993. HM/HK children were 10 percent more likely to receive any immunizations, and HM/HK pregnant women were 13 percent more likely to receive some prenatal care. Mothers' inpatient stays at delivery did not change under HM/HK. The length of newborn stays fell between 1992 and 1993, with both the HM/HK and the Medicaid 1993 comparison group deliveries associated with statistically shorter stays. During the early months of the program, improvements in the quantity of expected preventive care received were evident among children and women.     

Low-income Californians' experiences with health insurance and managed care.

California is rapidly implementing mandatory managed care for most of its Medicaid (Medi-Cal) beneficiaries. To assess the impact of this delivery system change, the authors analyzed a 1996 statewide population-based random-sample telephone survey of 3,563 adults between the ages of 18 and 64. Respondents with Medi-Cal managed care and Medi-Cal fee-for-service rated access to care and quality of care significantly higher than uninsured respondents yet lower than low-income privately insured individuals. While the authors did not find a difference in health care access and quality among Medi-Cal managed care enrollees compared with Medi-Cal fee-for-service enrollees, they also did not find that managed care provided any observed advantages to Medi-Cal recipients.     

Incentives in a Medicaid carve-out: impact on children with special health care needs

Objective. To evaluate whether a specialty care payment "carve-out" from Medicaid managed care affects caseloads and expenditures for children with chronic conditions.
Data Source. Paid Medicaid claims in California with service dates between 1994 and 1997 that were authorized by the Title V Children with Special Health Needs program for children under age 21.
Study Design. A natural experiment design evaluated the impact of California's Medicaid managed care expansion during the 1990s, which preserved fee-for-service payment for certain complex medical diagnoses. Outcomes in time series regression include Title V program participation and expenditures. Multiple comparison groups include children in managed care counties who were not mandated to enroll, and children in nonmanaged care counties.
Data Collection/Extraction Methods. Data on the study population were obtained from the state health department claims files and from administrative files on enrollment and managed care participation.
Principal Findings. The carve-out policy increased the number of children receiving Title V-authorized services. Recipients and expenditures for some ambulatory services increased, although overall expenditures (driven by inpatient services) did not increase significantly. Cost intensity per Title V recipient generally declined.
Conclusions. The carve-out policy increased identification of children with special health care needs. The policy may have improved children's access to prevailing standards of care by motivating health plans and providers to identify and refer children to an important national program.     

The impact of Medicaid managed care on hospitalizations for ambulatory care sensitive conditions

OBJECTIVE: To determine whether Medicaid managed care is associated with lower hospitalization rates for ambulatory care sensitive conditions than Medicaid fee-for-service. We also explored whether there was a differential effect of Medicaid managed care by patient's race or ethnicity on the hospitalization rates for ambulatory care sensitive conditions. DATA SOURCES/STUDY SETTING: Electronic hospital discharge abstracts for all California temporary assistance to needy families (TANF)-eligible Medicaid beneficiaries less than age 65 who were admitted to acute care hospitals in California between 1994 and 1999. STUDY DESIGN: We performed a cross-sectional comparison of average monthly rates of admission for ambulatory care-sensitive conditions among TANF-eligible Medicaid beneficiaries in fee-for-service, voluntary managed care, and mandatory managed care. DATA COLLECTION/EXTRACTION METHODS: We calculated monthly rates of ambulatory care-sensitive condition admission rates by counting admissions for specified conditions in hospital discharge files and dividing the monthly count of admissions by the size of the at-risk population derived from a separate monthly Medicaid eligibility file. We used multivariate Poisson regression to model monthly hospital admission rates for ambulatory care-sensitive conditions as a function of the Medicaid delivery model controlling for admission month, admission year, patient age, sex, race/ethnicity, and county of residence. PRINCIPAL FINDINGS: The adjusted average monthly hospitalization rate for ambulatory care-sensitive conditions per 10,000 was 9.36 in fee-for-service, 6.40 in mandatory managed care, and 5.25 in voluntary managed care (p<.0001 for all pairwise comparisons). The difference in hospitalization rates for ambulatory care sensitive conditions in Medicaid fee-for-service versus managed care was significantly larger for patients from minority groups than for whites. CONCLUSIONS: Selection bias in voluntary Medicaid managed care programs exaggerates the differences between managed care and fee-for-service, but the 33 percent lower rate of hospitalizations for ambulatory care sensitive conditions found in mandatory managed care compared with fee-for-service suggests that Medicaid managed care is associated with a large reduction in hospital utilization, which likely reflects health benefits. The greater effect of Medicaid managed care for minority compared with white beneficiaries is consistent with other findings that suggest that managed care is associated with improvements in access to ambulatory care for those patients who have traditionally faced the greatest barriers to health care.     

Medicaid managed care's impact on safety-net clinics in California

A growing percentage of Medicaid patients are receiving medical care within a managed care system. This policy change has raised concerns about whether safety-net providers can maintain their share of Medi-Cal (California Medicaid) patients. From 1995 to 1997 several of California's counties implemented mandatory Medi-Cal managed care. The majority of California's safety-net primary care clinics experienced a decline in the percentage of their patients insured by Medi-Cal. However, after the overall decline in the number of Medi-Cal beneficiaries was controlled for, the increased penetration of Medi-Cal managed care in a county was not independently associated with a decline in clinics' share of Medi-Cal patients. Despite this fact, it may become increasingly difficult for clinics to maintain their current level of services with declining Medi-Cal enrollment and other anticipated reforms in their funding.     

Capitated Medicaid Managed Care in a Rural Area: The Impact of Minnesota''s PMAP Program

CONTEXT: Although states have had difficulty extending Medicaid managed care (MMC) to rural areas, rural models of capitated MMC are expected to grow in response to new federal regulations and the serious budget problems facing nearly all states. As such, understanding the effects of capitated MMC in rural settings is important for policy considerations. PURPOSE: To evaluate the effects of capitated MMC on beneficiary access and use in rural Minnesota. METHODS: We took advantage of delays in the timing of the introduction of MMC across rural counties in Minnesota to estimate the effects of managed care on adults and children under Medicaid using a difference-in-differences framework. FINDINGS: We found that Minnesota's shift from fee-for-service Medicaid to MMC in its rural counties had little effect on access to health care for either adults or children. CONCLUSIONS: Because Minnesota reports that Medicaid costs under MMC are below expected costs under FFS Medicaid, it appears that the primary accomplishment of Minnesota's rural MMC initiative is one of cost savings: MMC provides the same access to care as FFS Medicaid, but at lower cost. With steep budget deficits in nearly all states, other states may want to consider Minnesota's rural MMC model as a mechanism for reducing their Medicaid costs.     

Medicaid managed care and infant health

This paper provides estimates of the effects of Medicaid managed care on prenatal care adequacy and infant birthweights, using a census of 1994 Medicaid births in Wisconsin, where some Medicaid recipients were enrolled in fully capitated health maintenance organizations (HMOs) while others remained in traditional fee-for-service (FFS) systems. The results indicate that while Medicaid patients enrolled in managed care programs may be more likely to receive adequate prenatal care, birth outcomes under managed care are not significantly different from those under FFS financing systems. We conclude that cost savings generated by Wisconsin Medicaid managed care are not coming at the expense of maternity patients' or infants' welfare.     

Racial and ethnic differences in receipt of primary care services between medicaid fee-for-service and managed care plans

We used a cross-sectional, population-based sample of Medicaid beneficiaries aged 18-64 to determine whether managed care enrollment was associated with reduced racial/ethnic disparities in self-reported access to primary care services compared with fee-for-service. Managed care beneficiaries reported greater access in each racial/ethnic category and for each outcome than did fee-for-service beneficiaries, although associations were not always statistically significant. Racial/ethnic minorities enrolled in managed care plans reported as much benefit from managed care enrollment as did whites. Within Medicaid, interventions aimed at the health insurance delivery model can facilitate increased access to primary care services without enhancing racial/ethnic disparities.     

Effect of an Integrated Care System on Utilization for CSHCN in Florida

In 2006, Florida began a pilot program under a federal Medicaid waiver to reform its Medicaid program in Broward and Duval counties. The Children’s Medical Services Network, a subcontracted health care delivery system for Florida’s children with special health care needs (CSHCN) enrolled in public insurance programs, participated in Medicaid reform through an Integrated Care System (ICS) for its enrollees. The ICS constitutes a significant departure from the subcontracted fee-for-service system used to deliver care to CSHCN in the non-reform counties, and limited information exists about its impact. The purpose of this study was to assess the effects of the ICS on Medicaid utilization among CSHCN in Broward and Duval. Administrative data from 3,947 CSHCN in Broward and Duval, and two control counties, enrolled in Florida’s Medicaid program between 2006 and 2008 were used for analyses. Fixed effects negative binomial models were used to estimate the impact of the ICS on inpatient, outpatient, and emergency department utilization. Results show the number of outpatient visits decreased by 9 % in Broward and 16 % in Duval. The number of inpatient stays decreased in Duval by 35 %. Emergency room utilization increased slightly in Broward, although the estimate was not significant. Results suggest that managed care under the ICS has impacted utilization, most significantly for inpatient care. The ICS presents a viable model of managed care for CSHCN that could result in cost savings. Results should be interpreted with care because the full effects of the ICS implementation may take more time to materialize.     

Low-birth-weight rate reduced by the obstetrical access project.

Obstetrical (OB) access was a Medicaid pilot project that operated in 13 California counties from July 1979 through June 1982. The project goals were to both improve access to care in underserved areas and improve pregnancy outcomes by providing enhanced prenatal care, including psychosocial, health education, and nutrition services. The project registered 6,774 women. The findings were: 87 percent of the registrants started prenatal care during the first or second trimester; 84 percent of the registrants completed care in the project; OB access mothers had a low-birth-weight rate of 4.7 percent, compared with 7.0 percent for a matched control group, suggesting a 33-percent reduction in low birth weight through the project; and the benefit-cost ratio of this program was about 2 to 1 for the short run because of savings in neonatal intensive care services. The State of California approved legislation in 1984 authorizing the project's scope of services for the Medi-Cal recipients on a statewide basis.     

Effects of Medicaid managed care programs on health services access and use

OBJECTIVE: To estimate the effects of Medicaid managed care (MMC) programs on Medicaid enrollees' access to and use of health care services at the national level. DATA SOURCES/STUDY SETTING: 1991-1995 National Health Interview Surveys (NHIS) and a 1998 Urban Institute survey on state Medicaid managed care programs. STUDY DESIGN: Using multivariate regression models, we estimated the effect of living in a county with an MMC program on several access and use measures for nonelderly women who receive Medicaid through AFDC and child Medicaid recipients. We focus on mandatory programs and estimate separate effects for primary care case management (PCCM) programs, health maintenance organization (HMO) programs, and mixed PCCM/HMO programs, relative to fee-for-service (FFS) Medicaid. We control for individual and county characteristics, and state and year effects. DATA COLLECTION/EXTRACTION METHOD: This study uses pooled individual-level data from up to five years of the NHIS (1991-1995), linked to information on Medicaid managed care characteristics at the county level from the 1998 MMC survey. PRINCIPAL FINDINGS: We find virtually no effects of mandatory PCCM programs. For women, mandatory HMO programs reduce some types of non-emergency room (ER) use, and increase reported unmet need for medical care. The PCCM/HMO programs increase access, but had no effects on use. For children, mandatory HMO programs reduce ER visits, and increase the use of specialists. The PCCM/HMO programs reduce ER visits, while increasing other types of use and access. CONCLUSIONS: Mandatory PCCM/HMO programs improved access and utilization relative to traditional FFS Medicaid, primarily for children. Mandatory HMO programs caused some access problems for women.     

Managed care and preventable hospitalization among Medicaid adults

OBJECTIVE: The study examines the association between managed care enrollment and preventable hospitalization patterns of adult Medicaid enrollees hospitalized in four states. DATA SOURCES/STUDY SETTING: Hospital discharge data from the Healthcare Cost and Utilization Project (HCUP) database of the Agency for Healthcare Research and Quality (AHRQ) for New York (NY), Pennsylvania (PA), Wisconsin (WI), and Tennessee (TN) residents in the age group 20-64 hospitalized in those states, linked to the Area Resource File (ARF) and American Hospital Association (AHA) survey files for 1997. STUDY DESIGN: The study uses separate logistic models for each state comparing preventable admissions with marker admissions (urgent, insensitive to primary care). The model controls for socioeconomic and demographic variables, and severity of illness. PRINCIPAL FINDINGS: Consistently in different states, private health maintenance organization (HMO) enrollment was associated with fewer preventable admissions than marker admissions, compared to private fee-for-service (FFS). However, Medicaid managed care enrollment was not associated with a reduction in preventable admissions, compared to Medicaid FFS. CONCLUSIONS: Our analysis suggests that the preventable hospitalization pattern for private HMO enrollees differs significantly from that for commercial FFS enrollees. However, little difference is found between Medicaid HMO enrollees and Medicaid FFS patients. The findings did not vary by the level of Medicaid managed care penetration in the study states.     

Medicaid managed care in New York City: recent performance and coming challenges

OBJECTIVES: This study evaluated New York City's voluntary Medicaid managed care program in terms of health care use and access. METHODS: A survey of adults in Medicaid managed care and fee-for-service programs during 1996-1997 was analyzed. RESULTS: Responses showed significant favorable risk selection into managed care but little difference in use of health care services. Although some measures of access favored managed care, many others showed no difference between the study groups. CONCLUSIONS: The early impact of mandatory enrollment will probably include an increase in the average risk of managed care enrollees with little change in beneficiary use and access to care.     

Prepaid versus traditional Medicaid plans: lack of effect on pregnancy outcomes and prenatal care.

Enrollment of Medicaid recipients into capitated, case-managed systems has been advocated as a method of controlling cost. We studied prenatal care and birth outcomes for women and children enrolled in Aid to Families with Dependent Children (AFDC) in two capitated programs in Santa Barbara, California and Jackson County, Missouri (Prepaid), compared with similar but fee-for-service comparison medical communities in Ventura County, California and St. Louis, Missouri (FFS). At the sites of care, 2,336 inpatient and 823 prenatal care records were abstracted. Women at all sites received fewer than the recommended number of prenatal visits. At no site did more than 40 percent of women receive prenatal care in the first trimester of pregnancy. Mean birth weight and proportion of children of low birth weight (less than 2,500 grams) were similar between the demonstration and comparison counties. Complications of pregnancy and cesarean section rates were also similar between demonstration and comparison counties. This study did not demonstrate a decreased quality of care provided to enrollees in capitated, case-managed Medicaid programs compared with fee-for-service. Basic prenatal care was provided only to some members of this population, regardless of the type of physician payment.     

Primary care case management and birth outcomes in the Iowa Medicaid program.

OBJECTIVES: This study compares prenatal care utilization and birth outcomes between Iowa Medicaid recipients receiving care in a primary care case management (PCCM) system and those receiving care in a fee-for-service (FFS) system. METHODS: Birth certificates linked with Medicaid hospitalization claims were analyzed for seven PCCM and seven FFS counties. RESULTS: From 1989 through 1992, there was (1) a 20% increase in the number of women who received adequate prenatal care in the FFS counties, vs a 5% increase in the PCCM counties; (2) a 17% increase in the number of women who initiated care within the first trimester in the FFS counties, vs a 6% increase in the PCCM counties; and (3) a 442% increase in the number of women who received enhanced prenatal services in the FFS counties, vs a 278% increase in the PCCM counties. There were no significant differences between groups in mean gestational age or birthweight; however, there was an increase of very-low-birthweight babies in both groups. CONCLUSIONS: PCCM, as implemented by the Iowa Medicaid program, has not appreciably improved prenatal care utilization or birth outcomes.     

Effect of privatized managed care on public insurance spending and generosity: Evidence from Medicaid

States choose to provide Medicaid coverage via managed care or traditional fee‐for‐service. Managed care provided by private insurers poses higher contracting costs and information asymmetry than traditional fee‐for‐service but potentially improves efficiency and reduces spending. Evaluating the effect of managed care on Medicaid spending is challenging because adoption of managed care is nonrandom and may be driven by local economic shocks that simultaneously affect Medicaid spending. This study implements a dynamic panel framework to estimate the effect of managed care enrollment on spending levels and program design. Results show reductions in Medicaid spending larger than previously found in cross‐state studies: A 10% increase of managed care enrollment reduces state Medicaid spending by 2.94%, or approximately $55 million. The study identifies which areas of spending are differentially affected by managed care enrollment and whether savings from managed care affect Medicaid design, specifically coverage generosity.     

Key policies emerging to govern delivery of family planning in Medicaid managed care

Originally enacted in 1965, Medicaid is a joint federal-state program under which the federal government sets broad parameters for the delivery of health care and family planning, while individual states control program administration. Recognizing the evolution of Medicaid over the past decade from a program based upon traditional fee-for-service payments to one dominated by managed care, Congress, as part of the 1997 Balanced Budget Act, freed states from having to obtain federal waivers before insisting that Medicaid enrollees obtain their care through managed care systems. That freedom was granted, however, on the condition that states meet uniform minimum national standards for Medicaid managed care. In September 1998, the Department of Health and Human Services' Health Care Financing Administration (HCFA) published proposed federal regulations to implement the uniform standards. Public input on the rule was solicited throughout the fall, and the agency is now making final policy decisions. The proposed regulations are discussed as they relate to freedom of choice and direct access to family planning services, cost sharing, informing enrollees of their rights as Medicaid recipients, and the provision which allows entire Medicaid managed care plans to refuse to provide, reimburse for, or provide coverage of a counseling or referral service based upon religious or moral grounds.