Policing Medicaid and Medicare managed care: the role of courts and administrative agencies

The much-publicized 2000 case of Frew v. Gilbert, in which a federal judge castigated the State of Texas for deficiencies in its Medicaid program, brought renewed attention to the issue of regulating the quality of care in Medicaid and Medicare HMOs. Frew and other recent cases highlight both the promise and the pitfalls of relying on courts to correct deficiencies in public managed care programs. This article argues that while litigation over inadequacies in Medicare and Medicaid managed care can serve an important signaling function in alerting agencies and legislatures about the need for reform, the role of the courts in policing public managed care is circumscribed by several constraints. Barriers to class action litigation and differences in the institutional capacities of courts and administrative agencies mean that litigation is best viewed as a supplement, not an alternative, to a renewed commitment to strong quality monitoring on the part of Centers for Medicare and Medicaid Services and state Medicaid agencies.     

Reining in agency action: the rejected proposal rule and Section 1011 of the 2003 Medicare Act

Section 1011 of the 2003 Medicare Act authorized the disbursement of over one billion dollars to healthcare providers that provide uncompensated emergency medical care to undocumented immigrants. In 2005, the Centers for Medicare and Medicaid Services (CMS) issued its final interpretation of the statute. Despite previous statementsto the contrary, CMS conditioned eligibilityfor Section 1011 funds on the collection of certain immigration status-related information from patients seeking emergency care. Prior to the issuance of CMS' final guidance, the House defeated House Resolution 3722, which was substantially similar to the CMS final guidance. This Article argues that the House's rejection of H.R. 3722 renders CMS's final guidance invalid under the analysis set forth in Chevron, U.S.A. Inc. v. National Resources Defense Council, Inc.     

The death of managed care: a regulatory autopsy

On the heels of widespread patient protection legislation in the states, the managed care industry abandoned or greatly scaled back the core elements of gate-keeping, utilization management, and financial incentives, which are the very targets of this legislation. This article explores whether, and to what extent, the industry's abrupt change in course can be attributed to these laws. Based on extensive interviews with key informants in six representative states, the article concludes that these laws were not the primary driver of changes in managed care practices. However, patient protection laws interacted with other social and market forces, through complex forms of feedback and reinforcement, to bring about more thoroughgoing change than would have otherwise occurred.     

Justice in Medicare: recent changes to the public health care system

This article sets out and examines a number of changes proposed by the Commonwealth Government to the Australian Medicare system as part of the 2003-2004 and 2004-2005 federal budgets, and the 2004 federal election campaign. In assessing the suitability of these reforms, the idea of justice is discussed. Health, as a basic good, is argued to be a matter of distributional and rectificatory justice. A number of popular material principles of justice are also examined and shown to be unsuited as sole determinants of health care resource allocation decisions. In light of this, various problems with the reforms are identified and improvements suggested.     

When methods meet politics: how risk adjustment became part of Medicare managed care

Health-based risk adjustment has long been touted as key to the success of competitive models of health care. Because it decreases the incentive to enroll only healthy patients in insurance plans, risk adjustment was incorporated into Medicare policy via the Balanced Budget Act of 1997. However, full implementation of risk adjustment was delayed due to clashes with the managed care industry over payment policy, concerns over perverse incentives, and problems of data burden. We review the history of risk adjustment leading up to the Balanced Budget Act and examine the controversies surrounding attempts to stop or delay its implementation during the years that followed. The article provides lessons for the future of health-based risk adjustment and possible alternatives.     

Medicare program; prospective payment system for long-term care hospitals: implementation and FY 2003 rates. Final rule

This final rule establishes a prospective payment system for Medicare payment of inpatient hospital services furnished by long-term care hospitals (LTCHs) described in section 1886(d)(1)(B)(iv) of the Social Security Act (the Act). This final rule implements section 123 of the Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA) and section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). Section 123 of the BBRA directs the Secretary to develop and implement a prospective payment system for LTCHs. The prospective payment system described in this final rule replaces the reasonable cost-based payment system under which LTCHs are currently paid.     

The complexities of managed care: operating a voluntary system

The implementation of state-sponsored voluntary case management programs for public assistance recipients creates provider and recipient recruiting problems that are unique to the state's economic environment, its political climate, its historic relationship with providers, its program goals, and its implementation strategies. This implementation study discusses the factors that influenced the operationalization of the Massachusetts managed care program for AFDC families. The issues of provider recruitment and recipient enrollment are examined in relation to the formal program goals of cost containment and access. The operational and bureaucratic problems the state Medicaid staff has experienced in maintaining the program evokes questions of who should administer the programs, who the best types of providers are in light of program goals, and how recipients can be enrolled in a voluntary program.