Earlier this month, the Florida Legislature passed legislation overhauling the Medicaid program. In addition to increasing oversight of managed care plans and requiring plans to return a portion of profits in excess of five percent, the initiative eliminates the traditional fee-for-service (FFS) option for most recipients. The reform also mandates enrollment in long-term managed care programs for seniors.
Other states are following suit and expanding or implementing managed care programs. Louisiana is in the midst of an implementation that will move its approximately 1.2 million FFS members into managed care. The State of Kentucky released an RFP early last month to expand their managed care program from the Louisville area throughout the state. While, the Governor of Illinois signed legislation that places half of the state’s Medicaid caseload into managed care by 2015; this comes less than a year after the state commenced a mandatory managed-care program for the aged, blind and disabled population.
As states continue to struggle with growing budget deficits, we’re seeing Medicaid agencies turn to managed care to help rein in costs and utilization of populations that have traditionally been thought of as too vulnerable or fragile to enroll in managed care. As with federal health reform, Medicaid agencies are demanding that managed care organizations (MCOs) provide high-quality, cost-effective care to their members. States are increasingly going the route of pay-for performance, quality bonuses and withholds, and quality based auto-assignment for its managed care programs.
Just as we’ve seen innovation on the quality front, we’re also seeing some other interesting proposals floating around. Times are tough. As budgets shrink and Medicaid enrollment increases, states are struggling to provide coverage to individuals without breaking the bank. Health reform has somewhat limited states by prohibiting them from relaxing enrollment criteria or increasing premiums beyond inflation for existing Medicaid members prior to 2014. So, states are turning to other ideas to find funding and change utilization patterns and behaviors for Medicaid enrollees in their programs.
In Texas, lawmakers are considering legislation for a waiver that would consolidate five-years of Medicaid funding and allow the state to run its own Medicaid program. Through vouchers, health savings accounts and other mechanisms, the state believes it can cover more people and do so more cost-efficiently without having to cut existing benefits. The Governor of Arizona has proposed to charge childless, unmarried adult Medicaid patients $50 a year if they smoke, have diabetes or are overweight. The same legislation that mandates a long-term care program in Florida, also proposes to seek a waiver to charge members a $100 fee for accessing non-emergency care in the emergency room.