According to a new national survey, more and more states are relying on Medicaid managed care plans, and the federal healthcare reform law hasn’t even been fully implemented yet. These states anticipate turning to Medicaid managed care organizations (MCOs) as a way of handling budgetary pressures as well as dealing with the estimated 16 million people — most of them uninsured adults — that will be added to Medicaid between 2014 and 2019 under the Affordable Care Act rollout. Let’s discuss how the reliance on Medical Managed Care is growing.
Reliance on Medicaid Managed Care Growing
In fact, the Kaiser Commission on Medicaid and the Uninsured released a report on September 14, 2011, stating that 27 of 45 states responding to their survey stated that they will undoubtedly depend more heavily on Medicaid-managed care in the near future. Further, ten states reported specific plans to expand Medicaid-managed care to new geographic areas or populations, such as medically compromised and the fragile elderly. Some say they mean to move Medicaid recipients with fee-for-service (FFS) coverage into managed care plans over the next few years.
It’s all about the money – it is just more economical to begin the conversion of the Medicaid population to managed care sooner rather than later.
However, the Kaiser Report cautions that Medicaid managed care may fail as a strategy without several factors in place: (a) a well thought out shift from FFS to managed care, (b) provider networks that are adequate in size, (c) sufficient capitated payment rates for plans, and (d) proper state oversight. The survey found most states include a pay-for-performance feature in their payments to Medicaid plans, and 11 states have a minimum medical loss ratio requirement for such plans.
Some pertinent points from the study are:
•Nearly every state has a comprehensive Medicaid managed care program, including primary care case management (PCCM). These cover about 66% of all beneficiaries nationally as of October 2010. Only three states (Alaska, New Hampshire and Wyoming) do not have any Medicaid managed care. Of the remainder, 36 states with comprehensive managed care programs partner with risk-based MCOs to cover 26 million-plus Medicaid recipients. 31 states run a PCCM program for 8.8 million enrollees. A dozen states use only PCCM; 17 states use MCOs only; and 19 states use both.
• 27 of 45 states expect to depend on Medicaid managed care to a greater extent. Of these 27, six (California, Kentucky, Louisiana, Michigan, New Jersey and South Carolina) say they will dictate managed care enrollment for additional Medicaid populations.
• Progressively, states are mandating managed care for those recipients of Medicaid that were previously excused from or not qualified for the program. This includes children with disabilities who are getting Supplemental Security Income (SSI) and disabled Americans who aren’t dually eligible.
•Twenty states (of 30 respondents) say they assume that managed care plans will be able to handle the imminent flood of new Medicaid enrollees under the healthcare reform law. Medicaid eligibility will expand to cover nearly all non-elderly Americans with annual incomes below 133% of the federal poverty level starting in 2014.
According to the report, Medicaid plans’ level of interest in joining state-based health insurance exchanges as defined under healthcare reform is rather uncertain. Further, an ambiguity seems to exist as to whether states will require Medicaid plans to participate in exchanges.
Meg Murray, CEO of the Association for Community Affiliated Plans (ACAP), a group of 58 not-for-profit Medicaid-focused plans, believes that the vast majority of ACAP’s member plans are interested in getting into exchanges. But in reference to ACAP’s lack of support of states that mandate plans’ involvement in exchanges, she states “it’s such a heavy lift with respect to reserves, accreditation and licensing as well as network development.”
It remains to be seen whether the Medicaid system can in fact handle the influx of now uninsured and the individuals converting from FFS programs, and whether states will formulate a definitive plan for Medicaid programs to either enter into the exchange programs or not. Needless to say, the Affordable Care Act’s overarching impact, quite clearly, has not even been fully realized, and in the meantime the urge to be reactive in the planning stage could be quite appealing.