Medicaid Managed Care, Kids, and Quality: What Can Transparency Do?

How Can We Tell Whether Medicaid MCOs are Doing a Good Job for Kids?

Medicaid covers 37 million kids, and most of those get their care through managed care organizations (MCOs).  The large majority of state Medicaid agencies contract with MCOs to organize networks of providers to deliver the services that enrolled children need. How good a job are those MCOs doing? How do we know? And how can transparency help? These are the questions that a new paper from CCF asks.

Here are some of the answers:

  • Federal and state governments are making a large and growing investment in Medicaid MCOs; in FY 2018, they are projected to spend about $275 billion paying MCOs to take care of kids and adults.
  • Under their contracts with state Medicaid agencies, MCOs agree to provide needed services to enrollees in exchange for a fixed monthly amount for each enrollee; this gives them an incentive to coordinate care for enrollees to reduce unnecessary use of high-cost services as well as to limit enrollee access to care and shift financial risk to providers.
  • Federal regulations issued in May of 2016 are designed to promote the coordination of care, check the incentive to underserve, and ensure accountability of MCOs for the accessibility and quality of care; transparency requirements are one of the key oversight mechanisms in the regulations.
  • There is currently no publicly accessible national database with information on the quality of care for children in individual MCOs; the transparency requirements in the federal regulations have the potential for making this information available at the state level, allowing beneficiaries, policymakers, and the public to compare MCO performance.
  • The transparency requirements, like other requirements in the federal regulations, are being phased in over the 3 year period 2017 to 2019; some state Medicaid agencies are already posting reports on the performance of individual MCOs on quality measures selected  by the state in advance of the required July 1, 2018 date.
  • The CMS Administrator has pledged to “rollback” the May 2016 regulations, which she considers “burdensome”; if the transparency requirements are weakened, beneficiaries and policymakers will have less information with which to tell whether individual MCOs are doing a good job for kids (or any other enrolled population), and MCOs will be less accountable for their performance.

In a speech last week to the Federation of American Hospitals, the Secretary of HHS identified four “areas of emphasis” for improving the health care delivery system. One of these is transparency: “…this administration is calling on not just doctors and hospitals, but also drug companies and pharmacies, to become more transparent about pricing and outcomes of their services and products.”  

While the Secretary did not specifically call out managed care plans in general or Medicaid MCOs in particular, transparency regarding quality outcomes for children enrolled in MCOs is just as important as transparency of price and quality information to consumers generally.  The paper explains how the May 2016 regulations use transparency to improve MCO accountability for the accessibility and quality of care to Medicaid enrollees. These regulations are entirely consistent with the Secretary’s emphasis on transparency as a policy lever that enables beneficiaries to “recognize and reward value” by enrolling in high-quality MCOs. To “rollback” the transparency provisions and other quality protections would be a huge step backwards.

Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.