States need "track record" for move to managed care

Plans' lack of experience is one concern as states move their Aged/Blind/Disabled (ABD) and Supplemental Security Income (SSI) populations into Medicaid managed care, according to James Verdier, a senior fellow in the Washington, DC, office of Mathematica Policy Research, a nonpartisan research firm.

Although a number of multi-state plans that specialize in the Medicaid managed care market have experience dealing with the ABD/SSI population, says Mr. Verdier, most have covered primarily mothers and children.

"That is one concern that has inhibited the expansion of this kind of managed care," he says. "You want people with a track record with this more complex population."

Here are Mr. Verdier's recommendations for steps that states should take when moving this population into managed care:

• The RFP should be very explicit about the qualifications a plan needs to be a qualified bidder.

For instance, says Mr. Verdier, states should specify the type of staffing that a managed care organization (MCO) needs to coordinate care for people with especially complex care needs.

• The system of payment for the plans should be appropriately adjusted for the high needs and high risk of this population.

Some people may have several co-existing conditions with extremely costly care, Mr. Verdier explains, while others may have a physical disability but are otherwise healthy and high-functioning. "There is enormous variation in the cost, and you have to take that into account," he says.

• The state should be able to measure the quality of the care provided by the MCO.

"You've got to have safeguards and monitoring provisions in place before you go down the road of including this population in managed care," Mr. Verdier says.

• Beneficiaries and their advocates should be consulted.

"You can't simply rush the thing through without consulting the people whose lives are going to be affected by it," says Mr. Verdier.

One approach, says Mr. Verdier, is to guarantee that beneficiaries can see the same providers they have seen in the past even if they're not in the MCO's network, at least for a transition period. "This makes sure that people with pretty complex needs do not have their lives disrupted, and gives everyone time to develop alternative arrangements if necessary," he says.

• Concerns of providers should be addressed, especially providers of mental health services, long-term care, and personal care assistance.

These providers are typically concerned about the additional layer of management and oversight that a managed care plan is likely to bring, says Mr. Verdier, and that they won't be paid as much for particular services or that there will be constraints on the volume of services they provide.

"A number of states require that the managed care plans pay the same rates that providers have been getting in the fee-for-service Medicaid program," says Mr. Verdier. "It wouldn't necessarily continue in perpetuity, but it is a way of dealing with the transition."

To assuage the concerns of providers of home and community-based services, says Mr. Verdier, some states require managed care plans to contract with them.

"You can require the plan to at least offer these providers a contract under reasonable terms, and they can take it or not as they see fit," he says. "It is an assurance that they will not be shoved to the side."