Tracking Medicaid managed care in rural communities: a fifty-state follow-up

This study updates a 1997 study examining implementation of rural Medicaid managed care programs. Most states operate Medicaid managed care programs for their beneficiaries, but the types of programs vary across urban and rural settings. Over the past four years the number of rural counties covered by Medicaid managed care, including fully capitated programs, has grown, although primary care case management (PCCM) remains the predominant program type in rural areas. Health plan withdrawals from rural areas have led some states with rural capitated programs to provide financial incentives or develop alternative approaches, such as enhanced PCCM programs.     

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.     

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.     

Comparing provider perceptions of access and utilization management in full-risk and no-risk medicaid programs for adults with serious mental illness

This article compares provider perceptions of access to services and utilization management (UM) procedures in two Medicaid programs in the same state: a full-risk capitated managed care (MC) program and a no-risk, fee-for-service (FFS) program. Survey data were obtained from 198 mental health clinicians and administrators. The only difference found between respondents in the FFS and MC sites was that outpatient providers in the MC site reported significantly lower levels of access to high-intensity services than did providers in the FFS site (p<.001). Respondents in the two sites reported similar attitudes toward UM procedures, including a strong preference for internal over external UM procedures. These findings support the conclusion that through diffusion of UM procedures, all care in the Medicaid program for persons with a serious mental illness is managed, regardless of risk arrangement. Implications for mental health services and further research are discussed.     

Mental health costs and access under alternative capitation systems in Colorado

OBJECTIVE: To examine service cost and access for persons with severe mental illness under Medicaid mental health capitation payment in Colorado. Capitation contracts were made with two organizational models: community mental health centers (CMHCs) that manage and deliver services (direct capitation [DC]) and joint ventures between CMHCs and a for-profit managed care firm (managed behavioral health organization, [MBHO]) and compared to fee for service (F.F.S.). DATA SOURCES/STUDY SETTING: Both primary and secondary data were collected for the year prior to the new financing policy and the following two years (1995-1998). STUDY DESIGN: A stratified random sample of 522 severely mentally ill subjects was selected from comparable geographic areas within the capitated and FFS regions of Colorado. Major variables include service cost, utilization, and access (probability of service use) derived from secondary claims data, subject reported access collected at six-month intervals, and baseline outcomes (symptoms, functioning, and quality of life). PRINCIPAL FINDINGS: In comparison to the FFS area, cost per person was reduced in the capitated areas in each of the two years following implementation. By the end of year two, cost per person was reduced by two-thirds in the MBHO areas and by one-fifth in the DC areas. Reductions in access were found for both capitated areas, although reductions in utilization for those receiving service were found only in the MBHO model. CONCLUSIONS: Medicaid mental health capitation in Colorado resulted in cost reducing service changes for persons with severe mental illness. Assessment of outcome change is necessary to identify cost effectiveness.     

Utilization of services in Arizona's capitated Medicaid program for long-term care beneficiaries.

The Arizona Long-Term Care System (ALTCS), Arizona's Medicaid program for long-term care (LTC) beneficiaries, capitates contractors to provide a full range of acute and LTC services to financially-eligible beneficiaries determined to be at risk of institutionalization. This article compares the acute care utilization experience of LTC beneficiaries in ALTCS with those in a fee-for-service (FFS) Medicaid program, linking data from both the Medicare and the Medicaid program files. Patterns of use observed in Arizona seem more consistent with a managed care environment than those observed in the FFS comparison. Rates of acute care utilization observed for both the capitated and the FFS program should be of interest to States considering incorporating LTC beneficiaries into their Medicaid managed care program.     

Medicaid managed care for mental health services: the survival of safety net institutions in rural settings

Few accounts document the rural context of mental health safety net institutions (SNIs), especially as they respond to changing public policies. Embedded in wider processes of welfare state restructuring, privatization has transformed state Medicaid systems nationwide. We carried out an ethnographic study in two rural, culturally distinct regions of New Mexico to assess the effects of Medicaid managed care (MMC) and the implications for future reform. After 160 interviews and participant observation at SNIs, we analyzed data through iterative coding procedures. SNIs responded to MMC by nonparticipation, partnering, downsizing, and tapping into alternative funding sources. Numerous barriers impaired access under MMC: service fragmentation, transportation, lack of cultural and linguistic competency, Medicaid enrollment, stigma, and immigration status. By privatizing Medicaid and contracting with for-profit managed care organizations, the state placed additional responsibilities on "disciplined" providers and clients. Managed care models might compromise the rural mental health safety net unless the serious gaps and limitations are addressed in existing services and funding.     

Partially capitated managed care versus FFS for special needs children

Little research has examined whether Medicaid managed care plans (MCPs) that incorporate case management are effective in coordinating services for children with special health care needs (CSHCN). This study evaluates the effects of enrollment of special needs children into a partially capitated MCP (with ongoing case management) versus the fee-for-service (FFS) option on use of therapeutic services, specifically speech, occupational, and physical therapy by site of service (school versus health care sector). Results show that special needs children enrolled in the partially capitated MCP are significantly more likely to obtain occupational and physical therapy at school relative to their FFS counterparts. Moreover, children enrolled in FFS are significantly less likely to be either regular or frequent users of each type of therapy relative to children enrolled in managed care. We attribute much of these disparities in use of therapeutic services at school to the availability of case management and coordination that is an integral component of the partially capitated MCP.     

Payment levels, resource use, and insurance risk of medicaid versus private insured in three states.

Concerns with access and costs in the Medicaid program often lead policy makers to consider alternatives. These include subsidizing poor persons' purchases of health insurance in private markets or integrating Medicaid beneficiaries into commercial managed care systems. As policy makers consider such alternatives, a persistent question is, apart from the disabled within Medicaid, do younger Medicaid enrollees represent a different insurance risk than people of similar age and sex within private insurance pools? We use 1994 data from Georgia, Mississippi, and California to assess relative payment levels, resource use/costs, and risk-adjusted utilization of fee-for-service (FFS) Medicaid enrollees versus privately insured people. When resources are valued at private prices, the use by Medicaid enrollees represents a higher cost. After risk adjustment, Medicaid enrollee resource use appears higher than expected for the privately insured only for outpatient facility visits in the southern states and for inpatient days by pregnant women in California Medi-Cal. Indeed, we find evidence that Medicaid enrollees are underserved relative to their health needs. Given the higher dollar value of their resource usage, apparently obtained under FFS at discounted provider rates, and the lack of evidence on significant overuse relative to need, their integration into private provider systems appears challenging.     

The long-term effects of Medicaid managed care on obstetrics care in three California counties

OBJECTIVE: To evaluate the long-term effects of Medicaid managed care (MMC) on obstetric service use and program costs in California. DATA SOURCES/STUDY SETTING: Longitudinal administrative data on Medi-Cal enrollment and claims and encounters related to pregnancy and delivery services were gathered from three counties--two long-standing MMC counties and one traditional fee-for-service Medicaid county--in California between 1987 and 1992. STUDY DESIGN: We studied Aid to Families with Dependent Children (AFDC) beneficiaries with live singleton vaginal deliveries with associated hospital stays of 14 days or less. Effects of managed care were examined with respect to prenatal visits, length of stay for delivery, maternal postpartum readmission rates, and total program expenditures. Multivariate analyses examined how the relative effect of managed care on service use and program expenditures in each MMC county evolves over time in comparison to fee-for-service. We controlled for length of Medi-Cal enrollment prior to delivery, data censoring, and individual characteristics such as race and age. PRINCIPAL FINDINGS: Prenatal care use is consistently lower in the MMC counties, although all three counties' prenatal care provision is well below the national standard. Drastic increases in one-day-stay deliveries were found: up to almost 50 percent of deliveries in MMC counties were one-day stays. Program cost savings associated with MMC enrollment are unambiguous. CONCLUSIONS: MMC cost savings might have come at the expense of reduced provision of prenatal care and shorter delivery length of stay. Future studies should verify any possible causal link and the effects on maternal and infant health outcomes.     

Substitution in a Medicaid mental health carve-out: services and costs

The objective is to empirically test the incentives associated with a Medicaid capitated mental health carve-out contract, whether outpatient services (less expensive, inside the contract) and residential treatment center care (costly care, outside of the contract) were substituted for inpatient psychiatric hospitalization used by children and adolescents. Data sources include Medicaid fee-for-service (FFS) claims for the non-capitated comparison sites and for residential treatment center use, and "shadow billing" encounter data for the experimental capitated managed care sites that provided public mental health services for children and adolescents with Medicaid insurance statewide in Colorado from September 1994 to June 1997. Two part least squares regression models are used to decompose services. Managed care sites are compared to sites that remained under FFS financing, before and in two post-periods after the carve-out. Principal findings show that children and adolescents who received mental health services from a capitated managed care provider were significantly less likely to receive inpatient care, and significantly more likely to receive residential treatment center care. In addition, insurance contract design contains financial incentives that affect the amount and mix of clinical care provided to clients by risk-bearing provider agencies. Findings provide evidence of cost substitution from inpatient care both inside the specialty system and outside the carve-out to other child-serving systems.     

Changes in the distribution of physicians in rural areas of Minnesota, 1965-85.

The purpose of this study was to assess changes in the physician-population ratio in non-SMSA Minnesota counties between 1965 and 1985 using county specific data published by the American Medical Association. The physician-population ratio actually decreased by 2 per cent for primary care physicians and by 11 per cent for family practitioners in the non-SMSA counties. The large increase in the number of physicians in Minnesota has not translated into improved access to primary care physicians in Minnesota's rural areas.     

Does managed care affect the diffusion of psychotropic medications?

Newer technologies to treat many mental illnesses have shown substantial heterogeneity in diffusion rates across states. In this paper, I investigate whether variation in the level of managed care penetration is associated with changes in state-level diffusion of three newer classes of psychotropic medications in fee-for-service Medicaid programs from 1991 to 2005. Three different types of managed care programs are examined: capitated managed care, any type of managed care and behavioral health carve-outs. A fourth-order polynomial fixed effect regression model is used to model the diffusion path of newer antidepressant and antipsychotic medications controlling for time-varying state characteristics. Substantial differences are found in the diffusion paths by the degree of managed care use in each state Medicaid program. The largest effect is seen through spillover effects of capitated managed care programs; states with greater capitated managed care have greater initial shares of newer psychotropic medications. The influence of carve-outs and of all types of managed care combined on the diffusion path was modest.     

Transportation brokerage services and Medicaid beneficiaries' access to care

Objective. To examine the effect of capitated transportation brokerage services on Medicaid beneficiaries' access to care and expenditures.
Data Sources/Study Setting. The study period from 1996 to 1999 corresponds to the period of a natural experiment during which Georgia and Kentucky implemented transportation brokerage services. Effects were estimated for asthmatic children and diabetic adults.
Study Design. We used difference-in-differences models to assess the effects of transportation brokerage services on access to care, measured by Medicaid expenditures and health services use. The study design is strengthened by the staggered implementation dates between states and within each state.
Principal Findings. For asthmatic children, transportation brokerage services increased nonemergency transportation expenditures and the likelihood of using any services; reductions in monthly expenditures more than offsetting the increased transportation costs. For diabetic adults, nonemergency transportation costs decreased despite increased monthly use of health services; average monthly medical expenditures and the likelihood of hospital admission for an ambulatory care-sensitive condition (ACSC) also decreased.
Conclusions. The shift to transportation brokerage services improved access to care among Medicaid beneficiaries and decreased the expenditures. The increase in access combined with reduced hospitalizations for asthmatic children and ACSC admissions for diabetic adults are suggestive of improvements in health outcomes.     

Medicaid Managed Care and Health Care Access for Adult Beneficiaries with Disabilities

Objective. To evaluate the impact of Medicaid managed care organizations (MCO) on health care access for adults with disabilities (AWDs).
Data Sources. Mandatory and voluntary enrollment data for AWDs in Medicaid MCOs in each county were merged with the Medical Expenditure Panel Survey and the Area Resource File for 1996–2004.
Study Design. I use logit regression and two evaluation perspectives to compare access and preventive care for AWDs in Medicaid MCOs with FFS. From the state's perspective, I compare AWDs in counties with mandatory, voluntary, and no MCOs. From the enrollee's perspective, I compare AWDs who must enroll in an MCO or FFS to those who may choose between them.
Principal Findings. Mandatory MCO enrollees are 24.9 percent more likely to wait >30 minutes to see a provider, 32 percent more likely to report a problem accessing a specialist, and 10 percent less likely to receive a flu shot within the past year. These differences persist from the state evaluation perspective.
Conclusions. States should not expect a dramatic change in health care access when they implement Medicaid MCOs to deliver care to the adult disabled population. However, continued attention to specialty care access is warranted for mandatory MCO enrollees.     

Medicaid Managed Behavioral Health in Rural Areas

As of 2000, 21 states had implemented Medicaid managed behavioral health (MMBH) programs for a significant portion of their rural population. It is not clear how MMBH programs may work in rural areas since they are primarily designed to control mental health utilization. In rural areas the challenge is often to enhance service delivery, not to reduce it. MMBH programs may also affect important features of rural delivery systems, including access to care and coordination of primary care and specialty mental health providers. This article describes the implementation of MMBH programs in rural areas based on an inventory of states implementing MMBH programs in rural counties conducted between June 1999 and June 2000. The experience of MMBH programs in rural areas is also described based on case studies conducted in six states. All 21 states included the general Medicaid population (Temporary Assistance for Needy Families); 17 states included special Medicaid populations (adults with serious and persistent mental illness and children with serious emotional disturbances). Slightly less than half the states integrated (carved-in) behavioral health with physical health services in serving the general Medicaid population; only one state integrated these services for the special Medicaid population. Access to mental health care in rural areas had generally not been restricted. MMBH had little impact on the linkage between primary care and mental health. Local Managed Behavioral Health Organizations, formed by public sector entities and providers, played an increasingly important role in the evolution of MMBH.     

Mental health costs and outcomes under alternative capitation systems in Colorado: early results

BACKGROUND: This study presents preliminary findings for the first nine months of the State of Colorado USA Medicaid capitation Pilot Project. Two different models of capitation (model I and model II) are compared with fee for service (FFS) in providing services to severely and persistently mentally ill adults. In model I the state's mental health authority contracts with community mental health centers (CMHCs) who both manage the care and deliver mental health services, while in model II the state contracted with a joint venture between a for-profit managed care firm who manage the care with either a single CMHC or an alliance of CMHCs who deliver the mental health services. AIMS: Our objective is to examine utilization, cost and outcomes of inpatient and outpatient (including community based) services before and after the implementation of a capitated payment system for Colorado's Medicaid mental health services compared to services that remained under FFS reimbursement. METHODS: The stratified, random sample includes 513 consumers (188 for model I, 179 for model II, and 146 for FFS). Consumer outcomes were collected by trained interviewers and include 17 measures of symptoms, health status, functioning, quality of life and consumer satisfaction. Utilization and cost of services are from the Medicaid claims data and a shadow billing data system (post-capitation) designed by Colorado. The first step of the two-step regression procedure adjusts for the presence of individuals with use or no service use during the specified time while the second step, ordinary least-squares regression, is applied to the sample who utilized services. RESULTS: These preliminary findings indicate consistent reductions in inpatient user costs and probability of outpatient use under capitation. Combining all services, there are consistent reductions in the probability of use in both models: model I had significantly higher initial probability of use for any service. Only model II showed a statistically significant decrease in post-capitation overall user costs, but they were initially higher than model I or FFS. Estimated total cost per person for model I suggests virtually no change from the pre- to post-capitation period. Model II had the highest pre-capitation and the lowest post-capitation estimated cost per person. Examination of pre measures of outcomes across capitated areas suggest that samples drawn from the FFS, model I and model II areas were comparable in severity of psychiatric symptoms, functioning, health status and quality of life. No changes were found in outcomes. DISCUSSION: These early findings are consistent with the limited literature on capitation. Both studies of capitation integrated with medical care and those specific to mental health settings did not find adverse changes in outcomes compared to FFS. Limitations include the short follow-up period, lack of detail and possible under-reporting of outpatient services provided by the shadow billing data system. CONCLUSIONS: For the short term, it is concluded that capitation can reduce service cost per person without significant change in clinical status. IMPLICATIONS FOR HEALTH CARE PROVISION AND USE: Implications are unclear until we can determine whether (i) reductions in the numbers receiving service indicates favorable consumer outcomes or reductions in access and (ii) lack of change in consumer outcomes is due to the benefits of capitation or the lack of sensitivity of the outcome measures. IMPLICATIONS FOR HEALTH CARE POLICY FORMULATION: Implications are premature for these early findings. IMPLICATIONS FOR FUTURE RESEARCH: Future research should include longer follow-up as well as analysis of long-term consequences for both cost savings and clinical outcomes.     

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.     

Does the quality of care in Medicaid MCOs vary with the form of physician compensation?

A growing fraction of Medicaid participants are enrolled in managed care organizations (MCOs). MCOs contract with primary care physicians (PCPs) to provide health-care services to Medicaid enrollees. The PCPs are generally compensated either via fee-for-service (FFS) or via capitated arrangements. This paper investigates whether the quality of care that Medicaid enrollees receive varies with the means by which PCPs are compensated. Using data for all Medicaid MCO enrollees in a large state, we find that enrollees in MCOs that pay their PCPs exclusively via FFS arrangements are more likely to receive services for which the PCPs receive additional compensation. These enrollees also are less likely to receive services for which the PCPs do not receive additional compensation. These findings suggest that financial incentives may influence the behavior of PCPs in Medicaid MCOs, and thus the quality of the health care received by Medicaid participants enrolled in MCOs.     

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.