Managed Care:

Oregon Program Appears Successful but Expansions Should Be Implemented Cautiously

T-HRD-91-48: Published: Sep 16, 1991. Publicly Released: Sep 16, 1991.

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GAO discussed Oregon's proposal to expand its prepaid managed care activities as part of a demonstration that would restructure its entire Medicaid program, focusing on the existing managed care program that will serve as the foundation for the proposed demonstration project. GAO noted that: (1) since 1985, Oregon's Medicaid program has increased to an enrollment of about 65,000 and Oregon has contracted with 16 health service providers to provide Medicaid services; (2) all but one of those providers were capitated for physician and outpatient services only; (3) Medicaid clients received inpatient services on a fee-for-service basis; (4) Oregon designed its Medicaid demonstration project to expand Medicaid eligibility to all persons with incomes up to 100 percent of the federal poverty level while redefining the scope of health care services it will reimburse; (5) the project is aimed at providing services through a managed care system that is moving toward full service prepaid health plans capitated to provide inpatient and ambulatory care; (6) Oregon has avoided many problems that other states had experienced by instituting safeguards against inappropriate service delivery and quality and complying with federal quality assurance requirements; and (7) although Oregon anticipates full implementation of the project by 1992, it was unclear whether Oregon could implement the statewide system needed to serve the threefold increase in Medicaid managed care enrollments by 1992.

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