Medicaid Managed Care:

Challenge of Holding Plans Accountable Requires Greater State Effort

HEHS-97-86: Published: May 16, 1997. Publicly Released: Jun 16, 1997.

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William J. Scanlon
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Pursuant to a congressional request, GAO reviewed state efforts to hold managed care plans accountable for meeting Medicaid program goals and for providing beneficiaries enrolled in capitated managed care plans the care they need, focusing on state efforts to: (1) ensure Medicaid beneficiaries have access to appropriate providers; (2) assess the adequacy of medical care provided through contracted plans; and (3) determine beneficiary satisfaction with plan performance.

GAO noted that: (1) ensuring that managed care plans provide enrollees the care that they need is a formidable task for private and public purchasers alike; (2) the four states GAO visited, Arizona, Pennsylvania, Tennessee, and Wisconsin, have built access and data collection requirements into their contracts with managed care plans; (3) a number of these states' requirements aim to ensure managed care plans develop and maintain provider networks that are sufficient to meet the needs of Medicaid beneficiaries; (4) some are criterion-based, such as patient-to-primary-care-physician ratios; (5) patient-to-primary-care-physician ratios generally do not consider the number of networks a primary care physician participates in or a physician's capacity or willingness to see Medicaid patients; (6) the four states also require plans to provide a full range of specialty services, even if this means beneficiaries must be referred to providers outside the plan's network; (7) however, because there are no established standards for specialists, these states have not specified the types and numbers of specialists to include in plan networks, making it difficult for these states to measure the adequacy of plan specialist networks before awarding a contract; (8) given the difficulties associated with gauging the adequacy of a provider network, the four states GAO visited have taken additional steps to assess the adequacy of the medical care that beneficiaries enrolled in managed care receive; (9) Arizona, Tennessee, and Pennsylvania also have invested in developing encounter data, the individual-level data on all services provided to all patients; (10) all four states also use data from plan-conducted clinical studies to help assess patient care; (11) the four states also have sought to assess the adequacy of patient care by tapping into information provided directly by Medicaid beneficiaries enrolled in managed care, such as patient satisfaction surveys and data gathered from grievance processes; (12) while it is important to gauge patients' satisfaction with the care they receive, satisfaction data generally are not reliable measures of quality; and (13) regardless, GAO found that if the states it visited improved certain methodologies for designing satisfaction surveys and stratified their survey grievance data, they would have a better understanding of the needs and concerns of their Medicaid beneficiaries enrolled in managed care, especially those with special needs or chronic illnesses who may experience problems in accessing services.

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