Medicaid Managed Care:

Serving the Disabled Challenges State Programs

HEHS-96-136: Published: Jul 31, 1996. Publicly Released: Jul 31, 1996.

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Pursuant to a congressional request, GAO examined state efforts to include disabled Medicaid beneficiaries in prepaid managed care programs, focusing on the: (1) extent to which states are implementing Medicaid prepaid managed care programs for disabled beneficiaries; and (2) steps that have been taken to safeguard the interests of the stakeholder groups.

GAO found that: (1) few states have significant experience with prepaid care programs for disabled Medicare beneficiaries; (2) 13 states have submitted proposals to enroll their disabled beneficiaries in prepaid care, and 12 of these states intend to make this enrollment mandatory; (3) half of the states with prepaid enrollment programs rely on disabled individuals to inform them of their dissatisfaction with their plans; (4) states that mandate the enrollment of their disabled beneficiaries in prepaid managed care plans develop more appropriate quality assurance mechanisms; (5) these states build safeguards into health care programs by incorporating adequate planning and consensus-building, and tailoring programs to meet the specific needs of disabled Medicare beneficiaries; (6) it is difficult for states to maintain a financially sound managed care system for disabled individuals; (7) some disabled groups have substantially higher medical costs than other groups; (8) individuals with high-cost disabilities find it more difficult to enroll in managed health care programs and experience limited health care services; (9) a few states are adopting an approach to limit the amount of profit a plan can earn or lose; (10) this approach lessens the incentive to limit service to high-cost beneficiaries; and (11) careful attention should be given when including the disabled population in prepaid health care plans, given their complex health care needs and states' limited experience with serving disabled individuals in prepaid settings.

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