Medicaid Managed Care: Access and Quality Requirements Specific to Low-Income and Other Special Needs Enrollees

The use of managed care within Medicaid, a joint federal-state program that finances health insurance for certain low-income families with children and individuals who are aged or disabled, increased significantly during the 1990s. By 2003, 59 percent of Medicaid beneficiaries were enrolled in managed care, compared with less than 10 percent in 1991. Medicaid managed care, under which states make prospective payments to managed care plans to provide or arrange for all services for enrollees, attempts to ensure the provision of appropriate health care services in a cost-efficient manner. However, because plans are paid a fixed amount regardless of the number of services they provide, managed care programs require safeguards against the incentive for some plans to underserve enrollees, such as by limiting enrollees' access to care. Access is also affected by other factors, such as physician location and willingness to participate in managed care plans. Safeguards to ensure enrollees have access to care could include requiring plans to maintain provider networks that provide enrollees with sufficient geographic access to providers or requiring managed care plans to develop and monitor certain quality indicators, such as enrollee satisfaction surveys or grievances. The Balanced Budget Act of 1997 (BBA) gave states new authority to require certain Medicaid beneficiaries to enroll in managed care plans and also required the establishment of consumer protections for Medicaid managed care enrollees in areas such as access to and quality of care. In June 2002, the Centers for Medicare & Medicaid Services (CMS) issued final regulations for Medicaid managed care organizations (MCO) to implement these BBA requirements. The BBA directed us to examine the access and quality requirements applicable to MCOs operating under the Medicare program and to private sector MCOs to determine their relevance to the Medicaid MCOs. As discussed with the committees of jurisdiction, we examined the extent to which Medicaid MCO requirements specifically address the needs of enrollees who are low income, have special cultural needs (such as language differences), or have special health care needs (such as chronic illnesses or disabilities) in comparison to similar requirements applicable to Medicare and private sector MCOs.