Medicaid managed care

Medicaid managed care Medicaid and additional services in the United States through an arrangement between a state Medicaid agency and managed care organizations (MCOs) that accept a set payment – “capitation” – for these services. The State pays the MCO a monthly premium to cover the services provided to a beneficiary. As of 2014, 26 states have contracts with MCOs to deliver long-term care for the elderly and individuals with disabilities. There are two main forms of Medicaid managed care, “risk-based MCOs” and “primary care case management (PCCM).” In a PCCM system, the State pays for services on a fee-for-service basis as well as a monthly fee to a contracted primary care provider to coordinate care for the beneficiary.

Managed care delivery systems grew rapidly in the Medicaid program during the 1990s. In 1991, 2.7 million beneficiaries were enrolled in some form of managed care. Currently, managed care is the most common health care delivery system in Medicaid. In 2007, nearly two-thirds of all Medicaid beneficiaries are enrolled in some form of managed care – mostly, traditional health maintenance organizations (HMO) and primary care case management (PCCM) arrangements. This amounted to 29 million beneficiaries, of which 19 million individuals were covered by fully capitated arrangements and 5.8 million were enrolled in Primary Care Case Management. By 2015, 39 States, including Washington D.C., had contracts with an MCO to serve at least some portion of their Medicaid population. Overall, more than half of all Medicaid beneficiaries receive care through an MCO plan, with the majority of beneficiaries being children and parents. MCO enrollment is likely to increase as many states rely on their MCO system to enroll newly eligible beneficiaries as they expand coverage according to Medicaid expansion provisions in the Affordable Care Act (ACA).

During this time, states increasingly turned to health plans already serving the public coverage programs such as Medicaid and SCHIP to operationalize expansions of coverage to uninsured populations. States used health plans as a platform for expansions and reforms because of their track record of controlling costs in public coverage programs while improving the quality of and access to care.

A variety of different types of health plans serve Medicaid managed care programs, including for-profit and not-for-profit, Medicaid-focused and commercial, independent and owned by health care providers such as community health centers. In 2007, 350 health plans offered Medicaid coverage. Of those, 147 were Medicaid-focused health plans that specialize in serving the unique needs of Medicaid and other public program beneficiaries. Over 11 million are enrolled in Medicaid focused health plans [1]. The National Council on Disability of the US in July 2015 reaffirmed the "guiding principles of Medicaid Managed Care Plans" in line with the Americans with Disabilities Act of 1990.

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