Medicaid managed care

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Medicaid managed care Medicaid and additional services in the United States through an arrangement between a state Medicaid agency and managed care organizations (MCOs) that accept a set payment – “capitation” – for these services. The State pays the MCO a monthly premium to cover the services provided to a beneficiary.[1] As of 2014, 26 states have contracts with MCOs to deliver long-term care for the elderly and individuals with disabilities.[2] There are two main forms of Medicaid managed care, “risk-based MCOs” and “primary care case management (PCCM).”[3] In a PCCM system, the State pays for services on a fee-for-service basis as well as a monthly fee to a contracted primary care provider to coordinate care for the beneficiary.[1]

Managed care delivery systems grew rapidly in the Medicaid program during the 1990s. In 1991, 2.7 million beneficiaries were enrolled in some form of managed care. Currently, managed care is the most common health care delivery system in Medicaid. In 2007, nearly two-thirds of all Medicaid beneficiaries are enrolled in some form of managed care – mostly, traditional health maintenance organizations (HMO) and primary care case management (PCCM) arrangements.[citation needed] This amounted to 29 million beneficiaries, of which 19 million individuals were covered by fully capitated arrangements and 5.8 million were enrolled in Primary Care Case Management.[citation needed] By 2015, 39 States, including Washington D.C., had contracts with an MCO to serve at least some portion of their Medicaid population. Overall, more than half of all Medicaid beneficiaries receive care through an MCO plan, with the majority of beneficiaries being children and parents.[1] MCO enrollment is likely to increase as many states rely on their MCO system to enroll newly eligible beneficiaries as they expand coverage according to Medicaid expansion provisions in the Affordable Care Act (ACA).

During this time, states increasingly turned to health plans already serving the public coverage programs such as Medicaid and SCHIP to operationalize expansions of coverage to uninsured populations. States used health plans as a platform for expansions and reforms because of their track record of controlling costs in public coverage programs while improving the quality of and access to care.

A variety of different types of health plans serve Medicaid managed care programs, including for-profit and not-for-profit, Medicaid-focused and commercial, independent and owned by health care providers such as community health centers. In 2007, 350 health plans offered Medicaid coverage. Of those, 147 were Medicaid-focused health plans that specialize in serving the unique needs of Medicaid and other public program beneficiaries. Over 11 million are enrolled in Medicaid focused health plans [1]. The National Council on Disability of the US in July 2015 reaffirmed the "guiding principles of Medicaid Managed Care Plans" in line with the Americans with Disabilities Act of 1990.

In 2011, all states except Alaska, New Hampshire and Wyoming had all, or a portion of, their Medicaid population enrolled in an MCO.[4] States can make managed care enrollment voluntary, or seek a waiver from CMS to require certain populations to enroll in an MCO. If states provide a choice of at least two plans, they can mandate enrollment in managed care.

Healthy children and families make up the majority of Medicaid managed care enrollees, but an increasing number of states are expanding managed care to previously excluded groups, such as people with disabilities, pregnant women, and children in foster care. In 2003, Hudson Health Plan implemented a patient-specific pay for performance (healthcare) (P4P) model to increase immunization rates and diabetes care for Medicaid managed care recipients.[5]

Managed Care Organizations and Behavioral Health[edit]

Medicaid is the largest payer for mental health services in the United States as mental and substance abuse disorders are twice as common among Medicaid beneficiaries as in the general population.[6][7] The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) required that most insurance plans covering mental health or substance use disorders to provide coverage on par with coverage provided for medical health conditions. In 2013, the Centers for Medicare and Medicaid Services (CMS) issued a letter providing guidance to state MCOs for compliance with parity requirements under MHPAEA.[2] All states expanding Medicaid per ACA eligibility using an MCO model are required to provide parity in mental health services. These plans must also provide substance abuse treatment as an essential benefit under an alternative benefit plan for newly eligibles. Similar parity requirements have been proposed by CMS to apply to all Medicaid managed plans. On April 6, 2015, CMS issued a proposed rule that would require Medicaid MCOs to comply with parity requirements set forth in MHPAEA, but allowing states to maintain flexibility in rate setting. The final rule has not yet been issued.[8]

States are able to design unique models for delivering behavioral and mental health services, but are largely defined by their choice in structure for administrative services. The two main classifications for administrative services are "carved-in" or "carved out." Carved-in models are the mostly highly integrated systems, with behavioral health services offered through MCOs along-side physical health services. The MCO provides administrative support to the state, and each MCO plan provides both physical and behavioral health services. For example, New York uses a carved-in model. Carved-out plans outsource administration of behavioral health services to a behavioral health organization (BHO) or a similar entity with a sole responsibility of mental and behavioral health services administration. Maryland is an example of a state that uses a carved-out model. Both methods may be used by states with Medicaid MCO models and some states use hybrid models that use both MCOs and BHOs for administrative support. One such state is Massachusetts, that uses both methods.[9]

See also


  1. ^ a b c "Medicaid Moving Forward". Kaiser Family Foundation (in en-US). Retrieved 2015-11-16. 
  2. ^ "States Turn to Managed Care To Constrain Medicaid Long-Term Care Costs". Agency for Healthcare Research and Quality. 2014-04-09. Retrieved 2014-04-14. 
  3. ^ "Medicaid and Managed Care". Kaiser Family Foundation. December 2012. Retrieved 2008-08-08. 
  4. ^
  5. ^ "Medicaid Managed Care Plan Offers Patient-Specific, Pay-for-Performance Program, Leading to Improvements in Immunization Rates and Diabetes Care". Agency for Healthcare Research and Quality. 2013-08-26. Retrieved 2013-09-17. 
  6. ^ "Behavioral Health Services". (in en-us). Retrieved 2015-11-16. 
  7. ^ Adelmann, PK (2003). "Mental and substance use disorders among Medicaid recipients: prevalence estimates from two national surveys". Administration and Policy in Mental Health. 
  8. ^ "Medicaid Fact Sheet: Mental Health Parity Proposed Rule for Medicaid and CHIP" (PDF). CMS. April 6, 2015. 
  9. ^ Boozang, Patricia (May 2014). "Coverage and Delivery of Adult Substance Abuse Services in Medicaid Managed Care" (PDF). Technical Assistance Brief. Centers for Medicare and Medicaid Services.