The managed care programs of several states profiled in a new Urban Institute report show a range of policy options available as new Medicaid rules and eligibility expansion (in 21 states for now) takes effect next year.
All but 15 states have comprehensive risk-based Medicaid managed care programs, and eight states in particular -- Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island, and Virginia -- have revamped managed care with an eye to reform and modernization, if not eligibility expansion under the Affordable Care Act (as is the case of Virginia), according to the Urban Institute.
Following the initial rise of Medicaid managed care in the 1990s, more states are using managed care for the broader Medicaid population and also specific patient segments.
Oregon has expanded managed care to Medicaid breast and cervical cancer treatment patients, and New York has been using managed care for homeless beneficiaries and is set to move non-dual-eligible nursing home patients into managed care this October. In addition, the Centers for Medicare & Medicaid Services is in the process of considering 25 state applications for using managed care in Medicare-Medicaid dual eligible demonstration programs.
[See also: WV opts for Medicaid expansion, with expanded managed care]
For the general Medicaid population, the managed care policies being adopted by states vary, with one of the most ambitious being Oregon's accountable care model of coordinated care organizations, or CCOs. The state currently has 15 CCOs – consortiums of providers and managed care organizations, that provide integrated physical and behavioral care (dental care is also envisioned as an addition) with a global budget that has capitated per-member per-month paymentz and non-capitated payments for certain services. About 90 percent of the state's Medicaid beneficiaries are covered by CCOs, including Medicare-Medicaid dual eligible patients.
New Mexico is consolidating long-term support services and physical, acute and behavioral care under one managed care program, Centennial Care. Starting next year, four managed care organizations will provide all those services under a single contract.
A variation of global payments, more states are tying health plan reimbursement to quality improvement. Maryland has been increasingly moving to quality-based payments, with a certain portion of health plan premium payments conditional on performance metrics.
Minnesota, meanwhile, recently ended competitive bidding and returned to a statewide rate-setting structure, with all plans paid the same rate.
In Michigan, where a majority of Medicaid beneficiaries are enrolled in managed care, the state government has used some element of consumer competition, with beneficiaries having a choice of at least two health plans (with the exception of the rural Upper Peninsula region, which is served by one managed care organization).
[See also: Questions abound in Arkansas' Medicaid private option]
In Rhode Island, almost all beneficiaries are mandatorily enrolled in the managed care program RIte Care, which covers all Medicaid services except long-term support. Beneficiaries can choose from two health plans: United Healthcare and the Neighborhood Health Plan, a nonprofit founded by 13 community health centers.
In Virginia, a conservative state whose current governor is not likely to expand Medicaid eligibility, six health plans participate in a statewide Medicaid managed care program, with participants mandatorily enrolled. Medicare-Medicaid eligible patients are set to be voluntarily enrolled in Virginia's managed care program as part of a demonstration project in 2014. Like Michigan, Virginians in Medicaid managed care have some choice of organizations, between two and four health plans.
New York's Medicaid program more than the others has come under increased scrutiny for higher-than-average spending -- at $8,960 per member, in fiscal year 2009 (the latest year available), compared to $5,527 nationally. (The state Medicaid Office of the Inspector General is also under investigation by the state comptroller.)
Ahead of likely Medicaid expansion, the state has embarked on a redesign program, the key feature being a global spending cap. New York's managed care program gives beneficiaries the choice of several health plans, with 15 operating statewide, including some provider-sponsored plans. The state's managed care law has a mix of carrot and sticks, with rules that let the state put health plans with weak performance on probation and if deemed necessary terminate their contract.
Looking at those eight states' managed care programs, Urban Institute researchers concluded that they "seem on balance well-positioned to handle the ACA Medicaid expansion," should they all decide too. One key area to watch, they said, is the management of enrollment, eligibility and claims IT systems.
All of those states used federal Medicaid funding, under the ACA, for Medicaid information system modernization. Even with that, the Urban Institute found, "state officials are acutely aware that they are undertaking a significant change for which a new IT system is still being developed, and doing all of this under tight deadlines."
As the North Carolina Department of Health and Human Services said after a state audit found some kinks in the implementation of a new Medicaid information system (which was delayed two years), "Transitions of this magnitude never go perfectly."
The new systems have required a large amount of inter-agency collaboration, and one state Medicaid official told the Urban Institute that the new system was "forcing them to rethink how they do business."