State Medicaid managed care enrollment: understanding the political calculus that drives Medicaid managed care reforms

The objective of this article is to understand the political motivations underlying Medicaid managed care reforms by examining the determinants of enrollment of beneficiaries in managed care plans in the fifty states. To highlight the role of the model variables, including measures of the political environment, public interest, and special interests, a distinction is made between capitated and fee-for-service managed care enrollment. The results show that cost containment within the context of the Medicaid program is perceived as strongly favored by voters. Accordingly, the relative cost and tax price of providing Medicaid services are important factors in states' decision to enroll Medicaid beneficiaries in managed care plans, particularly capitated ones. The results also indicate a surprisingly significant influence by labor unions that generally oppose managed care enrollment for fears of lost jobs. The recipient population and provider groups also play an important role in shaping the Medicaid managed care landscape. The influence of variables measuring states' ability and willingness to pay and median voter preferences suggest that, within the context of Medicaid managed care enrollment, the public's interests are being served; however, the results also point toward inequities within the program and implications concerning financing arrangements between states and the federal government.     

Effects of Tennessee Medicaid managed care on obstetrical care and birth outcomes

A comparative study was conducted in two neighboring states, Tennessee and North Carolina, to determine whether Medicaid managed care (implemented in Tennessee as TennCare) affected prenatal care, care patterns at labor-delivery, and birth outcomes. A pre- and post-design coupled with a difference-in-difference approach--using North Carolina as a control--was used to assess TennCare's effects for all births and for three categories of high-risk mothers (under age eighteen, unwed, or living in high poverty areas). Data from 328,296 singleton births in birth files and matched birth-death files for 1993 and 1995 in both states were used to analyze a number of variables related to maternal behavior during pregnancy, utilization of care before and after labor-delivery, patterns of obstetrical care at delivery, and birth outcomes. Under TennCare, Tennessee mothers were relatively more likely to obtain no prenatal care or to wait and initiate third trimester care as compared to those in North Carolina. Relative utilization of specific prenatal procedures declined, Apgar scores fell very slightly, and birth abnormalities increased in the poverty subsample. TennCare had no significant effect on infant mortality. Utilization reductions in obstetrical services were achieved with apparent spillovers to non-TennCare births, but without adverse effects overall. TennCare was neither a panacea nor an unmitigated disaster. It is a model worth examining, but not uncritically.     

Medicaid program; Medicaid managed care: new provisions. Final rule

This final rule amends the Medicaid regulations to implement provisions of the Balanced Budget Act of 1997 (BBA) that allow the States greater flexibility by permitting them to amend their State plan to require certain categories of Medicaid beneficiaries to enroll in managed care entities without obtaining waivers if beneficiary choice is provided; establish new beneficiary protections in areas such as quality assurance, grievance rights, and coverage of emergency services; and eliminate certain requirements viewed by State agencies as impediments to the growth of managed care programs, such as, the enrollment composition requirement, the right to disenroll without cause at any time, and the prohibition against enrollee cost-sharing.     

Medicaid program; Medicaid managed care. Withdrawal of final rule with comment period

This document withdraws all provisions of the final rule with comment period on Medicaid managed care that we published in the Federal Register on January 19, 2001 (66 FR 6228) with an initial effective date of April 19, 2001. This January 19, 2001 final rule, which has never taken effect, would have combined Medicaid managed care regulations in a new part 438, implemented Medicaid managed care requirements of the Balanced Budget Act of 1997 (Pub. L. 105-33), and imposed new requirements on entities currently regulated as "prepaid health plans' (PHPs). The regulations set forth in the final rule being withdrawn have been superseded by regulations promulgated in a subsequent rulemaking initiated on August 20, 2001 (66 FR 43613). In addition, this document addresses comments received in response to an interim final rule with comment period that we published on August 17, 2001 in the Federal Register (66 FR 43090) that further delayed, until August 16, 2002, the effective date of the January 19, 2001 final rule with comment period.     

Medicaid program; external quality review of Medicaid managed care organizations. Final rule

This final rule establishes requirements and procedures for external quality review (EQR) of Medicaid managed care organizations (MCOs) and prepaid inpatient health plans (PIHPs). It defines who qualifies to conduct EQR and what activities can be conducted as part of EQR. In addition, under certain circumstances, this rule allows State agencies to (1) use findings from particular Medicare or private accreditation review activities to avoid duplicating review activities, or (2) exempt certain Medicare MCOs and PIHPs from all EQR requirements. Also, this rule allows the payment of enhanced Federal financial participation (FFP) at the 75 percent rate for the administrative costs of EQRs or EQR activities that are conducted by approved entities.     

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.     

Medicaid program; Medicaid managed care--HCFA. Proposed rule

This proposed rule would amend the Medicaid regulations to allow the States greater flexibility by giving them the option to require Medicaid recipients to enroll in managed care entities without obtaining waivers. These revisions, which are authorized by the Balanced Budget Act of 1997, would establish new beneficiary protections in areas such as quality assurance, grievance rights, and coverage of emergency services. They would eliminate certain requirements viewed by State agencies as impediments to the growth of managed care programs, such as the enrollment composition requirement, the right to disenroll without cause at any time, and the prohibition against enrollee cost-sharing. They would also permit State agencies to amend their State plans to require enrollment in managed care organizations subject to certain conditions, including limits on whose enrollment can be mandated, and a requirement for beneficiary choice. In addition, this rule would extend most of these new requirements to prepaid health plans.     

The potential impact of private long-term care financing options on Medicaid: the next thirty years

This study analyzes the potential effect on the Medicaid program of private sector financing mechanisms for long-term care. The data are from the Brookings-ICF Long-Term Care Financing Model and include projections over the next thirty years. While private financing alternatives have some modest impacts on Medicaid expenditures and the number of Medicaid long-term care recipients, the data suggest relatively little change in the need for Medicaid. There will be substantial increases in Medicaid long-term care expenditures over time, and private sector options cannot change this much.     

Medicaid program; Medicaid managed care. Health Care Financing Administration (HCFA), HHS. Final rule with comment period

This final rule with comment period amends the Medicaid regulations to implement provisions of the Balanced Budget Act of 1997 (BBA) that allow the States greater flexibility by permitting them to amend their State plan to require certain categories of Medicaid beneficiaries to enroll in managed care entities without obtaining waivers if beneficiary choice is provided; establish new beneficiary protections in areas such as quality assurance, grievance rights, and coverage of emergency services; eliminate certain requirements viewed by State agencies as impediments to the growth of managed care programs, such as the enrollment composition requirement, the right to disenroll without cause at any time, and the prohibition against enrollee cost-sharing. In addition, this final rule expands on regulatory beneficiary protections provided to enrollees of prepaid health plans (PHPs) by requiring that PHPs comply with specified BBA requirements that would not otherwise apply to PHPs.     

The impact of the recent Supreme Court rulings in Pegram and Rush Prudential on state regulation of managed care organizations

Over the past two decades, the Employee Retirement Income Security Act of 1974 (ERISA) has shielded managed care organizations (MCOs) from liability for negligent treatment or coverage decisions. This Article examines the Supreme Court jurisprudence in the area of ERISA preemption, and assesses the impact of these recent decisions on state regulation of MCOs. The author concludes that recent decisions in Pegram v. Herdrich and Rush Prudential HMO, Inc. v. Moran have broadened the states' power to regulate MCOs and enhance the ability of injured plaintiffs to sue such organizations under state tort law.     

The prospects for prepaid long-term care: the Arizona Medicaid experiment

Arizona is adding long-term care to its prepaid, capitated alternative to Medicaid. This article discusses the potential for this major cost-control experiment. Experience suggests that those able to quality for long-term care will fare better than the poor did in the previous system. However, limiting eligibility will be the primary means of controlling costs; significant price competition is not likely to develop. The bidding process will serve more to transfer risk to contract providers than to improve program efficiency. Potential cost savings will be more than offset by an increased identification of need.