Medicaid:

Factors to Consider in Expanding Managed Care Programs

T-HRD-92-26: Published: Apr 10, 1992. Publicly Released: Apr 10, 1992.

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GAO discussed the role of managed care in state Medicaid programs. GAO noted that: (1) managed care refers to a health care delivery system that provides its patients with a single point of entry and then refers the patients to a specialist or to a hospital, if necessary; (2) Medicare is being severely strained by the continued rise in the size of its population and cost; (3) between 1991 and 1992, program enrollment is expected to increase from $27.7 million to $30.1 million, and program expenditures are expected to increase from $92.2 billion to $127.2 billion; (4) patients are generally unhappy with the traditional fee-for-service Medicaid program; and (5) federal and state policymakers perceive managed care as a possible way of improving program access and quality. GAO also found that previous state-managed Medicaid program reviews identified problems in: (1) access to care; (2) service quality; (3) oversight of provider financial reporting, disclosure, and solvency; (4) utilization data; and (5) quality care problem followup. GAO believes that: (1) managed care programs can improve access to quality health care; (2) states should institute a set of safeguards to ensure adequate protection for recipients, which include a quality assurance system, a grievance procedure, and an outside independent review of medical records; (3) states need to monitor subcontracts and utilization data; and (4) effective state and federal oversight is needed along with prompt corrective actions when problems are identified.

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