Readiness for Medicaid Managed Care Reform Initiatives: A Profile of Rural Family Physicians

Medicaid managed care is now an important factor in the financing of rural health care delivery. The participation of rural family physicians in Medicaid managed care is vital for the rural poor to access health services. This study examined 855 family physicians practicing in nonmetropolitan counties across the United States to determine their readiness to participate in Medicaid managed care. Physicians were asked about their experience with prepaid programs and the factors that would influence their participation in such a program. A shortage of health care providers and low reimbursement rates were most frequently cited as barriers to successful implementation. Physicians who had participated in prepaid programs in the past but were no longer participating had the most negative opinions about the potential for Medicaid managed care programs to enhance care for the poor in their communities. Overall, physicians reported potential for the program to improve access and quality of care, but they also expressed reservations about the financial and administrative effects on their practices. These results reveal that negative attitudes were associated with prepaid programs that failed to meet expectations, but physicians also expressed an optimism about the potential to serve the poor within a managed care model.     

Participation of plans and providers in Medicaid and SCHIP managed care. State Children's Health Insurance Program

For Medicaid and SCHIP managed care programs to succeed, they must attract enough and the right kinds of plans and providers to meet access and care goals. In 2001 we analyzed practices and perceptions that bear on these goals by surveying managed care plans participating in Medicaid or SCHIP, or both, in eleven states. Participating plans appear supportive of both programs and are largely able to secure providers to participate, too. To date, SCHIP has not attracted many plans not already participating in Medicaid. While perceptions were positive in 2001, maintaining current plan and provider relationships in an environment that has become much more budget constrained will be challenging.     

System change: quality assessment and improvement for Medicaid managed care

Rising Medicaid health expenditures have hastened the development of State managed care programs. Methods to monitor and improve health care under Medicaid are changing. Under fee-for-service (FFS), the primary concern was to avoid overutilization. Under managed care, it is to avoid underutilization. Quality enhancement thus moves from addressing inefficiency to addressing insufficiency of care. This article presents a case study of Virginia's redesign of Quality Assessment and Improvement (QA/I) for Medicaid, adapting the guidelines of the Quality Assurance Reform Initiative (QARI) of the Health Care Financing Administration (HCFA). The article concludes that redesigns should emphasize Continuous Quality Improvement (CQI) by all providers and of multi-faceted, population-based data.     

Physician satisfaction with Medicaid managed care: the Missouri experience

BACKGROUND: Medicaid managed care is important to health reform at the state level. However, little is known about physician satisfaction with these programs. We sought to measure this satisfaction in Missouri and determine its predictors. METHODS: We surveyed a random sample of primary care physicians participating in Medicaid managed care (n = 670) or traditional Medicaid (n = 670). Primary outcomes measured were physicians' satisfaction Medicaid managed care, traditional Medicaid and commercial managed care. Satisfaction was measured on a 5-point Likert-type scale. RESULTS: The response rate was 52%. Physicians participating in Medicaid managed care were less likely to be satisfied or very satisfied with Medicaid managed care (28.6%) than with commercial managed care (40%) or their previous experience with traditional Medicaid (39.7%). Among physicians participating in traditional Medicaid, 29.8% were satisfied or very satisfied with traditional Medicaid. Physicians participating in Medicaid managed care were less satisfied with clinical autonomy under that system in comparison with their previous experience with traditional Medicaid (relative difference = 10.8%, P =.001). In multiple linear regression analyses, clinical autonomy (R2 = 0.40) was a strong predictor of overall satisfaction with Medicaid managed care. CONCLUSIONS: Enhancing physicians' clinical autonomy may result in improved satisfaction with Medicaid managed care. State Medicaid agencies should include physician satisfaction as a measure of Medicaid managed care plans' quality.     

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.     

Competitive health plans and alternative payment arrangements for physicians in the United States: public sector examples.

The Medicaid program in the United States is moving to a competitive managed care system whereby patients no longer have freedom of choice of physicians and physicians are given incentives to provide care cost effectively. The wide variety of competitive managed care programs represents attempts to introduce rationality into the relationship between consumers and providers in a community. Early evidence, based largely on preliminary data analysis indicates that competing plans which place physicians at some financial risk and also employ administrative mechanisms, are more likely to show cost savings than health plans that do not employ these methods.     

Does substituting home care for institutional care lead to a reduction in Medicaid expenditures?

In 1981 Congress introduced Home and Community Based Services (HCBS) waivers in an attempt to contain Medicaid long-term care expenditures. This paper analyzes the efficacy of the waiver program. To date, little is known about its impact on cost containment. Using state-level Medicaid data on expenditures and the number of individuals participating in HCBS waivers between 1992 and 2000, this study estimates the impact of HCBS waivers on total Medicaid expenditures as well as on Medicaid institutional, home health and pharmaceutical expenditures. A fixed effects model is used to analyze Medicaid expenditures using variation in the size of HCBS waiver programs across states and over time. The results, robust across multiple specifications, show increases rather than decreases in total Medicaid spending as well as increases in the other Medicaid spending categories analyzed. This implies that there is no evidence of substitution from institutional care to the HCBS waiver program or that cost-shifting is occurring. In fact, the large magnitude of the estimated spending increases suggests the waivers may induce more people to enter the Medicaid program.     

Fate of Medicaid remains uncertain as showdown nears

A Republican plan to renovate the Medicaid program has been proposed in Congress as one component of an overall budget reconciliation act. President Bill Clinton is expected to veto this proposal. The Republicans combined the budget reconciliation with an increase in the Federal debt ceiling. A showdown between Congress and the President is expected by November 6, 1995. If no agreement is reached at that time, the U.S. Government will shut down or default on financial obligations. AIDS activists and health care providers are striving to ensure that the Congressional Medicaid proposal does not pass, as it would devastate health care protection for the indigent, the elderly, and many AIDS patients. Medicaid is the single largest federally-funded health care program for people with AIDS, with over forty percent of people with AIDS relying on Medicaid for their health insurance. Under the Republican plan, Federal funding for State-run Medicaid programs would be at least nineteen percent lower than the amount necessary to cover medical costs; the shortfall ranges from thirty percent in Washington to two percent in Kansas. States would be able to choose the number of beneficiaries that would be covered, the types of services offered, and the source of health care providers. The President's counter-proposal would eliminate projected spending through increased use of managed choice health-care. His plan retains Medicaid as a means-tested entitlement program.     

Medicaid managed care: the last bastion of the HMO?

States rely on health maintenance organizations (HMOs) for their Medicaid beneficiaries because they offer guaranteed access to comprehensive benefits at a predictable cost. This is true despite movement away from HMOs, or at least the more restrictive variants, in the private sector. Plans that focus on Medicaid are becoming more central to states' programs as commercial plans exit. Publicly traded, Medicaid-focused plans are also emerging. Medicaid participating plans are aggressively managing costs and care, contrasting sharply with commercial insurance where the trend is toward less intrusive managed care. In this context, state Medicaid managed care programs are facing important policy challenges related to plan participation, mainstreaming, and product design.     

The Effect of Medicaid on Health Care Consumption of Young Adults

All states provide Medicaid until the age of 19 years. After 19 years, young adults may become ineligible for Medicaid. Using the Medical Expenditure Panel Survey, we find that the resulting loss of Medicaid coverage causes substantial changes to the level and composition of health care use. The total number of visits to health care providers falls by over 60%, two‐thirds of which is due to a decline in office visits. Expenditures, in particular inpatient expenditures, also appear to fall sharply. Copyright © 2014 John Wiley & Sons, Ltd.     

Mandated managed care for Medicaid recipients

The need to control governmental health expenditures has led to experiments with mandated managed care for Medicaid recipients. Loss of freedom to choose care providers was considered a worthy sacrifice. The authors examine the historical and legislative background, including research and demonstration projects. Although they view some form of rationing as inevitable, they argue that Medicaid recipients should not be singled out to bear the main part of the burden.     

Children's Access to Dental Care in Connecticut's Medicaid Managed Care Program

Objective: To describe dental care utilization and access problems in Connecticut's Medicaid managed care program, using quantitative and qualitative research methods. Methods: Using Medicaid managed care enrollment and encounter data from Connecticut, utilization rates for preventive care and treatment services are determined for 87,181 children who were continuously enrolled in Medicaid managed care for 1 year in 1996–97. Sociodemographic and enrollment factors associated with utilization are identified using bivariate and multivariate methods. Dental providers and practices where children received services are described. Qualitative methods are used to characterize problems experienced by families seeking dental care during the study period. Results: Only 30.5% of children continuously enrolled in Medicaid managed care for 1 year received any preventive dental services; 17.8% received any treatment services. Children who received preventive care were eight times more likely to have received treatment services. Utilization was higher among (a) younger children, (b) children who lived in Hartford and in other counties served by public dental clinics, and (c) children enrolled in health plans that did not subcontract for administration of dental services. Just 5% of providers, primarily those in public dental clinics, performed 50% of the services. Families whose children needed care encountered significant administrative and logistical problems when trying to find willing providers and obtain appointments. Conclusions: Access to dental care is a problem for children in Connecticut's Medicaid managed care program. Several features of managed care have negatively affected access. Public dental clinics served many children across the state and contributed to higher utilization of preventive care and treatment services among children living in Hartford.     

Caring for patients under Medicaid mandatory managed care: perspectives of primary care physicians

The purpose of the study was to describe the experiences of primary care physicians caring for Medicaid recipients in a demonstration mandatory health maintenance organization (HMO) managed care program. The authors collected data through semistructured individual or focus group interviews with 14 physicians and through interviews with the chief executive officers of the three HMOs participating in the demonstration program. Interview questions, developed initially from a review of the literature, addressed physicians' experiences as primary care providers for Medicaid recipients under traditional fee-for-service and under managed care arrangements through the demonstration program. Four themes emerged: providers' hassles and burdens, the complex needs of Medicaid patients, improved access to care under managed care, and individual providers' disconnect from the processes of health policy implementation and program evaluation.     

The Nebraska Medicaid managed behavioral health care initiative: Impacts on utilization,expenditures, and quality of care for mental health

This study evaluates the impact of Nebraska's Medicaid managed care program for behavioral health services on mental health service utilization, expenditures, and quality of care. Implementation of the program is correlated with progressive reductions in both total (about 13% over 3 years) and per eligible per month (20%) expenditures and a rapid, extensive decline in inpatient utilization and admissions. The percentage of enrollees receiving any type of treatment for a mental disorder actually increased modestly. Most important, several indicators of quality of care (eg, timely receipt of ambulatory care following discharge from inpatient care and readmission to inpatient care shortly following discharge) suggest that quality of care did not materially change under the carve-out. Although a thorough assessment of quality of care impacts is warranted, this study suggests implementation of a managed care program may allow states to reduce Medicaid expenditures without compromising quality of care.     

Physicians contracting with managed care, Medicare, and Medicaid

Managed care has become an ever important form of health care delivery, yet little is known about the characteristics of providers contracting with managed care organizations. Using data from a national survey of 4,729 physicians, we find that market conditions, specialty, and sociodemographics all affect a physician's decision to contract with managed care. Moreover, most of these characteristics also have similar effects on a physician's decisions to participate in Medicare and Medicaid. The latter result implies that physicians view managed care, Medicare, and Medicaid similarly when making contracting decisions, although financial incentives in these insurance programs are different.     

Medicaid managed care and provider consolidation

In the thrust toward constructing economic value, health care provider firms have been consolidating at a marked rate. Medicaid managed care programs have been rapidly emerging with the objectives of containing health care costs and improving services for beneficiaries. However, there are concerns that the trend toward achieving market efficiency through merger is largely incongruent with the economic and health value objectives of Medicaid managed care programs in the states. Discordance among value objectives arises primarily because of inefficient and market concentrating horizontal merger strategies employed by firms and disruptions in quality of care that occur during the transition to integrated health care systems. By promoting vertical integration strategies and filling in the quality gaps created by an active merger environment, Medicaid offices advance state objectives of cost containment and quality while recognizing that providers operate in a complex and competitive environment that necessitates consolidation for organizational survival.     

Medicaid managed care for mental health services in a rural state

State governments throughout the country increasingly have turned to managed care for their Medicaid programs, including mental health services. We used ethnographic methods and a review of legal documents and state monitoring data to examine the impact of Medicaid reform on mental health services in New Mexico, a rural state. New Mexico implemented Medicaid managed care for both physical and mental health services in 1997. The reform led to administrative burdens, payment problems, and stress and high turnover among providers. Restrictions on inpatient and residential treatment exacerbated access problems for Medicaid recipients. These facts indicate that in rural, medically underserved states, the advantages of managed care for cost control, access, and quality assurance may be diminished. Responding to the crisis in mental health services, the federal government terminated New Mexico's program but later reversed its decision after political changes at the national level. This contradictory response suggests that the federal government's oversight role warrants careful scrutiny by advocacy groups at the local and state levels.     

Learning your ABDs: Variation in health care utilization across Kansas Medicaid disability groups

BackgroundState Medicaid programs provide critical health care access for persons with disabilities and older adults. Aged, Blind and Disabled (ABD) programs consist of important disability subgroups that Medicaid programs are not able to readily distinguish.Objective/hypothesisThe purpose of this project was to create an algorithm based principally on eligibility and claims data to distinguish disability subgroups and characterize differences in demographic characteristics, disease burden, and health care expenditures.MethodsWe created an algorithm to distinguish Kansas Medicaid enrollees as adults with intellectual or developmental delays (IDD), physical disabilities (PD), severe mental illness (SMI), and older age.ResultsFor fiscal year 2009, our algorithm separated 101,464 ABD enrollees into the following disability subgroups: persons with IDD (19.6%), persons with PD (21.0%), older adults (19.7%), persons with SMI (32.8%), and persons not otherwise classified (6.9%). The disease burden present in the IDD, PD, and SMI subgroups was higher than for older adults. Home- and community-based services expenditures were common and highest for persons with IDD and PD. Older adults and persons with SMI had their highest expenditures for long-term care. Mean Medicaid expenditures were consistently higher for adults with IDD followed by adults with PD.ConclusionsThere are substantial differences between disability subgroups in the Kansas Medicaid ABD population with respect to demographics, disease burden, and health care expenditures. Through this algorithm, state Medicaid programs have the opportunity to collaborate with the most closely aligned service providers reflecting needed services for each disability subgroup.     

The relation between selective contracting and healthcare expenditures in private health insurance plans in the United States

Many healthcare systems, including The Netherlands, Germany and Switzerland, have incorporated elements of managed competition, whereby insurers compete for enrollees in a marketplace organized or facilitated by a government or governing entity. In these countries, managed competition was introduced with the idea that the system would contain cost growth while maximizing value for consumers and employers. An important mechanism to control costs is selective contracting: the process of contracting providers into a network and offer insurance packages with varying levels of provider coverage. In these systems, enrollees are expected to choose lower cost plans which offer access to only contracted providers in the network. The questions is, however, if restricting provider choice leads to reduced healthcare expenditures.In the United States, enrollees often have a choice between plans with restricted networks of providers and plans that offer more provider choice, where care outside the contracted network of providers is (partly) covered. The purpose of this study is to understand whether insurance plans with restrictions on provider access in the United States have reduced healthcare expenditures and to identify the mechanism by which that reduction occurred. We used data from the Medical Expenditure Panel Survey (MEPS), a nationally representative sample of families and individuals. We estimated expenditures for enrollees in restricted network plans using two-part models and generalized linear models. We found that restricted network plans, on average, save $761 per enrollee.Our results suggest that cost savings due to restricted network plans are largely a result of price reductions rather than utilization reductions, although both play a role in cost savings. When introducing reforms shifting from a supply‐oriented to a demand‐oriented health care system, these findings might be worth considering by other countries.     

Oil and water? Lessons from Maryland's effrort to protect safety net providers in moving to Medicaid managed care

Studies have highlighted the tensions that can arise between Medicaid managed care organizations and safety net providers. This article seeks to identify what other states can learn from Maryland's effort to include protections for safety net providers in its Medicaid managed care program—HealthChoice. Under HealthChoice, traditional provider systems can sponsor managed care organizations, historical providers are assured of having a role, patients can self-refer and have open access to certain public health providers, and capitation rates are risk adjusted through the use of adjusted clinical groups and claims data. The article is based on a week-long site visit to Maryland in fall 1998 that was one part of a seven-state study. Maryland's experience suggests that states have much to gain in the way of “good” public policy by considering the impact of their Medicaid managed care programs on the safety net, but states should not underestimate the challenges involved in balancing the need to protect the safety net with the need to contain costs and minimize the administrative burden on providers. No amount of protection can compensate for a poorly designed or implemented program. As the health care environment continues to change, so may the need for and the types of protections change. It also may be most difficult to guarantee adequate protections to those who need it most—among relatively financially insecure providers that have a limited management infrastructure and that depend heavily on Medicaid and the state for funds to care for the uninsured. This research on Maryland was funded under a grant from the Kaiser Family Foundation. The Maryland study is part of a larger project on low-income coverage and access that is sponsored jointly by the Kaiser Family Foundation and the Commonwealth Fund. All views are those of the authors only and do not necessarily reflect those of the funding agencies or Mathematica Policy Research, Incorporated.