By Joel Ferber, Legal Services of Eastern Missouri and nationally recognized expert on Medicaid
A recent article in USA Today focused on Medicaid managed care and its implications for health reform. Health insurance companies are clamoring for the substantial new business that will become available when Medicaid coverage is expanded to an estimated 16 million new individuals under the Affordable Care Act. Medicaid managed care is already well-established in state Medicaid programs although a few states (like Oklahoma and North Carolina) have moved away from capitated managed care for alternatives such as primary care case management and medical homes. At the same time that they gear up for the Affordable Care Act’s Medicaid expansion and the new health insurance exchanges, states are also grappling with budget shortfalls and looking increasingly to managed care to help control the costs of their Medicaid programs.
For example, Missouri is considering a statewide geographic expansion of managed care for the remaining children, families and pregnant women that still receive care on a fee-for-service basis. At a forum this summer, several provider groups including the Missouri Hospital Association and a coalition of community mental health centers, spoke out against such an expansion. Legal Services’ Advocates for Family Health programs reported on their uneven experience with Missouri’s existing managed care program, including inadequate provider networks, extreme travel distances to providers, inconsistent prior authorization processes, and burdensome administrative practices. They indicated that these problems should be addressed if a geographic expansion is to go forward. Moreover, recent reports from state consultants Alicia Smith and Associates and the National Health Law Program indicate less than stellar performance by Missouri’s Medicaid HMOs while other state consultants, The Lewin Group, found insufficient State oversight to support an expansion of Medicaid managed care. Finally, the State’s own Medicaid Director acknowledges that the State has not done as well as it could have “in holding [managed care] health plans fully accountable to provide services for people.”
Even more troubling than a geographic expansion of managed care is the potential expansion of managed care to additional populations including people with disabilities to achieve budgetary savings. Another recent report released by two Missouri disability advocacy coalitions documents the many problems and pitfalls with expanding managed care to people with disabilities as a cost-saving measure, including the challenge of developing sufficient provider networks to meet the more intensive needs of these beneficiaries and the significant likelihood of underservice to people with serious health needs. These are significant concerns in light of states’ continuing interest in extending managed care to these populations.
This discussion raises concerns for both health reform and the interim period between now and 2014 when the Affordable Care Act’s Medicaid expansion kicks in. Managed care’s inconsistent performance certainly raises questions about the dramatic expansions of Medicaid managed care that are anticipated under the ACA. Of particular concern is the fact that the new group of Medicaid eligibles (particularly childless adults) is likely to have serious and complex health needs as the research and state experience (in states that already cover childless adults) suggests. Therefore, states need to carefully consider other models such as primary care case management and “health homes” as alternatives to expanding managed care when they expand Medicaid. If they do turn to managed care for the new Medicaid expansion group, then states must implement strong oversight mechanisms (including secret shopper surveys) to ensure adequate provider networks, and prevent improper denials of care. In the meantime, states should be very careful about expanding Medicaid managed care to people with disabilities to achieve cost-savings, which could lead to rampant underservice for especially needy individuals. Missouri advocates have argued for alternative models such as patient-centered medical homes (provided for in the Affordable Care Act) and reducing long-term care costs through more home and community based options (which are also expanded in the ACA). These may well be more effective ways of dealing with State budget shortfalls than expanding managed care to highly vulnerable populations.
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