Medicaid Managed Care:

States' Safeguards for Children With Special Needs Vary Significantly

HEHS-00-169: Published: Sep 29, 2000. Publicly Released: Oct 30, 2000.

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Pursuant to a congressional request, GAO reviewed the Medicaid managed care services for children with special needs, focusing on the: (1) extent to which states are enrolling children with special needs, as defined by the Balanced Budget Act (BBA), in capitated managed care plans; and (2) scope and effectiveness of the safeguards states are implementing to ensure that children with special needs receive appropriate care within Medicaid managed care.

GAO noted that: (1) following the general trend of serving more Medicaid beneficiaries through managed care delivery systems, many states are enrolling a range of children considered to have special needs in capitated managed care programs; (2) however, the number of children involved is uncertain, because many of the states could not readily report the number of affected children; (3) the 36 states GAO surveyed enroll some or all of the BBA categories of children in capitated managed care: (a) 14 states mandated enrollment; (b) 11 states allowed families to make a choice between capitated managed care and some form of fee-for-service coverage; and (c) another 11 states had both mandatory and voluntary enrollment for children in different categories or in different parts of the state; (4) of the 6 categories of children with special needs identified by the BBA, Supplemental Security Income (SSI) children are the most likely to be enrolled in capitated plans; (5) between 1996 and 1999, the number of states enrolling SSI children in capitated health plans increased from 17 to 31; (6) Katie Beckett state plan children were the least likely to be enrolled; (7) adoption and implementation of safeguards for these children vary significantly across the 36 states GAO surveyed; (8) some types of safeguards have been more widely adopted by states than others; (9) 31 of the 36 states have at least one measure designed to ensure adequate pediatric provider capacity; (10) however, 18 states do not inform health plans of the presence of special needs when enrolling children, and 18 do not require health plans to conduct a needs assessment soon after enrollment; and (11) additionally, some safeguards may be less effective because states have made them optional rather than mandatory, have not adopted rigorous approaches in their design and use, or do not target the safeguard specifically for children with special needs.

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