Each Year States Develop Mco Capitation Rates That Must Be Actuarially Sound And May Include Risk Mitigation Strategies
States pay Medicaid managed care organizations a set per member per month payment for the Medicaid services specified in their contracts. Under federal law, payments to Medicaid MCOs must be actuarially sound. Actuarial soundness means that the capitation rates are projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the managed care plan for the time period and the population covered under the terms of the contract. Unlike fee-for-service , capitation provides upfront fixed payments to plans for expected utilization of covered services, administrative costs, and profit. Plan rates are usually set for a 12-month rating period and must be reviewed and approved by CMS each year. States may use a variety of mechanisms to adjust plan risk, incentivize plan performance, and ensure payments are not too high or too low, including risk sharing arrangements, risk and acuity adjustments, medical loss ratios , or incentive and withhold arrangements.
Figure 2: CMS Has Provided Guidance to States to Address MCO Payment Issues in Response to the COVID-19 Pandemic.
The Meaning And Origins Of Managed Care
The term managed care has different meanings depending on the context in which it is used. These multiple meanings can be confusing, especially to those who are not well versed in the terminology of health care delivery systems. Reduced to its fundamentals, however, managed care involves efforts to coordinate, organize, and rationalize the delivery of health care services and supports in a manner designed to improve service access and quality while avoiding unnecessary expenditures.
Managed health care emerged in the 1930s in response to the growing cost of medical services in the United States. Physicians and hospitals banded together in local or area-wide cooperatives to provide primary and acute care services to individual subscribers in exchange for the payment of a fixed monthly fee, or premium. As employer-based health insurance became the norm in the United States, commercial insurers and large employers came to recognize the advantages of a managed care approach to controlling the costs and quality of health services. By the early 1990s, a majority of American workers were enrolled in some type of managed care arrangement.
Apple Health Services Covered Without A Managed Care Plan
Some services are paid for by Apple Health without a managed care plan, also called fee-for-service . That’s what we call it when Apple Health pays providers directly for each service they do, using your ProviderOne services card.
Most Apple Health clients receive their regular health care coverage through a managed care plan. Apple Health coverage without a managed care plan is sometimes necessary due to the way other coverage works with Apple Health for instance, when clients have Medicare as their primary coverage.
The following services are always covered by Apple Health without a managed care plan.
- Inpatient psychiatric care for physician services
Your primary care provider or health plan will help you find these benefits and coordinate your care, when necessary.
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Over Time The Expansion Of Risk
States incorporate quality metrics into the ongoing monitoring of their programs, including linking financial incentives like performance bonuses or penalties, capitation withholds, or value-based state-directed payments to quality measures. In a 2021 KFF annual survey of Medicaid directors, over three-quarters of responding MCO states reported using at least one financial incentive to promote quality of care as of July 2021 . Financial incentive performance areas most frequently targeted by MCO states include behavioral health, chronic disease management, and perinatal/birth outcomes. These focus areas are not surprising given the chronic physical health and behavioral health needs of the Medicaid population, as well as the significant share of the nations births funded by Medicaid. A number of states reported making changes to their quality incentive programs due to the COVID-19 pandemic, as the pandemic has likely affected clinical practices and timely reporting of quality data. Despite activity in this area, detailed performance information at the plan-level is not frequently made publicly available by state Medicaid agencies, limiting transparency and the ability of Medicaid beneficiaries to assess how plans are performing on key indicators related to access, quality, etc.
Which Parts Of Medicare Are Included In Managed Care Plans
Managed care plans take the place of original Medicare. Original Medicare includes Medicare Part A and Medicare Part B .
When you have a managed care plan, all your costs will be included. You dont need to know whether Part A or Part B cover a service because your managed care plan will cover all the same things.
Managed care plans are also referred to as Medicare Part C plans. These plans cover everything original Medicare does, and they often cover additional services as well. For example, original Medicare doesnt cover routine dental care, but many managed care plans do.
Managed care plans sometimes include coverage for Medicare Part D, which is prescription drug coverage. Managed care plans often include this coverage with your plan. This means all your coverage will be under one plan. A managed care plan that includes Part D coverage is known as a Medicare Advantage Prescription Drug plan.
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Expansion Of Medicaid Managed Care
Most people in Texas who have Medicaid get their services through managed care. In this system the member picks a health plan and gets Medicaid services through that health plan’s network of providers. Most health plans offer Medicaid members extra services not available through traditional Medicaid.
Right now, there are three Medicaid managed care programs in Texas: STAR, STAR+PLUS, and STAR Health. The 2013 Texas Legislature approved several expansions of Medicaid managed care and directed HHSC to develop a performance-based payment system that rewards outcomes and enhances efficiencies. Managed care expansion plans include:
In Fy 2020 Payments To Comprehensive Risk
In FY 2020, state and federal spending on Medicaid services totaled over $662 billion. Payments made to MCOs accounted for about 49% of total Medicaid spending , an increase of almost three percentage points from the previous fiscal year. The share of Medicaid spending on MCOs varies by state, but over three-quarters of MCO states directed at least 40% of total Medicaid dollars to payments to MCOs . The MCO share of spending ranged from a low of about 2% in Colorado to 88% in Kansas. State-to-state variation reflects many factors, including the proportion of the state Medicaid population enrolled in MCOs, the health profile of the Medicaid population, whether high-risk/high-cost beneficiaries are included in or excluded from MCO enrollment, and whether or not long-term services and supports are included in MCO contracts. As states expand Medicaid managed care to include higher-need, higher-cost beneficiaries, expensive long-term services and supports, and adults newly eligible for Medicaid under the ACA, the share of Medicaid dollars going to MCOs will continue to increase.
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Find Out About Medicaid Managed Care Plans
Medicaid managed care plans provide the benefit of Medicaid coverage with the management of a local provider. Providing state-funded care to some 80 million people, Medicaid covers a wide scope of services. However, where possible, many people are turning to Medicaid managed care by state, due to the increased ease and efficiency by which they can access medical services. Medicaid managed care enrollment was implemented in 1982, though it was not until the 1990s that beneficiaries began to take notice of its advantages. The state-specific program was enacted to address issues pertaining to the quality of care provided by participating organizations by way of partnering with private health insurance companies. As such, Medicaid managed care providers came to include health insurance organizations previously limited to servicing only the privately insured.
Read on for further information about Medicaid managed care by state, including the following topics:
- What is a managed care organization ?
- Medicaid managed care plans: Which states offer it?
- Recent regulations for managed care organizations
- The challenges faced by state MCOs
Types Of Medicaid Managed Care Plans
Three different types of arrangements are commonly referred to as managed care within the Medicaid policy arena: comprehensive risk-based health plans, primary care case management programs, and limited-benefit plans.
- Comprehensive risk-based plans are the most commonly used type of Medicaid managed care arrangement. Typically, states employ an HMO model in which qualified health plans receive fixed per member per month payments from the state for furnishing a defined range of health services to plan enrollees. Enrollees receive services through a network of participating providers. If aggregate expenditures exceed total income, the health plan is responsible for absorbing the losses, although sometimes the health plan passes on a portion of the financial risk to participating providers. In addition, states sometimes agree to share financial risk with the health plan by assuming losses in excess of a specified level . Such arrangements are often referred to as risk corridors.
Twenty-three million Medicaid beneficiaries were enrolled in comprehensive at-risk managed care plans in 2009. Of this number, 56 percent were enrolled in Medicaid-only MCOs, while the balance were participating in plans operated by private health insurers that enroll both private and Medicaid-eligible individuals.
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We Know Youre Going To Have Questions
Ohio Medicaids new approach to managed care is based on extensive feedback we received from providers, patients, and other key stakeholders about the way the system was working for them.
It is designed to make access to care simpler, more personal, and more effective. But, we know youll still have questions. Feel free to contact us at with suggestions, questions and guidance on the changes ahead.
For information related to the next generation of managed care, please visit managedcare.medicaid.ohio.gov.
What Does A Managed Long
A Long Term Care Plan provides services to people with a disability or long-lasting health problem. Your plan will make sure you get the long term care services you need. Long term care includes help with day-to-day and personal activities, home health aides, adult day health, and other services. You will continue to use your Medicaid card for any services no covered by your Managed Long-Term Care Plan.
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Chapter 1an Overview Of Medicaid Managed Care
Medicaid plays an integral role in financing health care services in the United States, accounting for 16 percent of total health spending and providing coverage for one out of every six Americans. Among the more than 60 million citizens who rely on Medicaid are about 9 million nonelderly people with disabilities, including 1.4 million children. While people with disabilities constituted 16.5 percent of Medicaid enrollees in fiscal year 2008, expenditures on their behalf represented 44 percent of total Medicaid outlays.
The Medicaid program serves a diverse array of people with disabilities, ranging widely in age and type and severity of disability, and has an extraordinary impact on the health and quality of life of beneficiaries with disabilities. The program rolls include children with physical, sensory, intellectual, and developmental disabilities working-age adults with spinal cord and traumatic brain injuries children and adults with severe and persistent mental illnesses and low-income adults with other serious, chronic illnesses and disorders such as diabetes and cardiac and pulmonary diseases.
Medicaid: Managed Care Plans
What is a managed care plan?
A managed care plan is a health insurance company the Ohio Department of Medicaid pays to provide health care services to some people. In Ohio, most people who have Medicaid must join a managed care plan to receive their health care. Ohios five managed care plans are: Buckeye Health Plan, CareSource, Molina Healthcare, Paramount Advantage and United Healthcare. If you have a managed care plan, you should receive a managed care card in the mail.
Some people in Ohio are in a special managed care program called MyCare Ohio, which is supposed to coordinate both Medicare and Medicaid benefits. The MyCare Ohio plans include: Aetna, Buckeye, CareSource, Molina and United Healthcare. This factsheet does not discuss MyCare Ohio plans.
What services do managed care plans provide?
Managed care plans must provide the same services as traditional Medicaid. However, a managed care plan may have different rules for deciding whether you can get a service. They might also make you get approval ahead of time before you can get a service. Some managed care plans offer optional benefits that are not included in traditional Medicaid. When you enroll in a managed care plan, you should receive a member booklet with information about the benefits. Your doctor or other medical provider should also be able to help you find out these limits and how to request authorization for your medical services.
How do I enroll in and choose a managed care plan?
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Nc Medicaid Managed Care
In 2015, the NC General Assembly enacted legislation directing DHHS to transition Medicaid and NC Health Choice from fee-for-service to managed care. Under managed care, the state contracts with insurance companies, which are paid a predetermined set rate per enrolled person to provide all services.
In July 2020, legislation authorized NC Medicaid Managed Care to begin July 1, 2021, for Standard Plans and April 1, 2023, for Behavioral Health I/DD Tailored Plans.
How Does One Know That The Enrollment Is Complete And They Can Start Using The Plan
- New York Medicaid Choice will send a notice.
- The selected managed care plan will send the new enrollee a Member ID card directly to them along with a welcome letter and a plan handbook explaining the benefits.
- New York Medicaid Choice – 1-800-505-5678
- Contact the individual plan’s member services dept.
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Contact Your Apple Health Plan
Contact your plan to:
- Find a new doctor or see if the doctor you want to see is in your Apple Health plan.
- File a complaint because you’re not happy with the service you were provided by your doctor or the health plan.
- Replace your Apple Health plan benefits card.
- Find out more information about your Apple Health plan.
Federal And State Oversight Of Medicaid Managed Care Services
While Congress has afforded states flexibility in designing and operating managed care programs, states still must adhere to basic statutory provisions governing the administration of their Medicaid programs. Moreover, statutory requirements have been added under Section 1903 of the Social Security Act to ensure that states are held accountable for services delivered to participants in Medicaid managed care plans. These requirements are as follows:
- Plans must grant federal and state auditors access to their financial accounts and program records.
- In delivering and financing services, plans are prohibited from discriminating on the basis of an enrollees health status.
- Plan enrollees must be afforded the right to disenroll within the first 90 days without cause and every 12 months thereafter.
- Plans must maintain encounter data and provide this data at a level of detail and frequency specified by HHS.
In addition to any state-imposed stipulations governing noncompliance, federal law specifies that, if a managed health plan fails to provide medically necessary services as called for in its contractual agreement with the state, charges premiums in excess of permissible limits, or violates other contractual requirements, the secretary of HHS may impose certain penalties in addition to those specified in law, including monetary penalties and denial of Medicaid payments to the state for amounts paid under the contract ).
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What Are Types Of Managed Care Plans
Here are the basic types of managed care organizations or plans:
- Health Maintenance Organization manages care by requiring you to see network providers, usually for a much lower monthly premium. HMOs also often require you to see a PCP before going elsewhere, and do not cover you to see providers outside the network. Preventive care is covered at 100%. HMOs cost less, but offer less flexibility.
- Preferred Provider Organization gives you the option to see any doctor you like, in- or out-of-network. You may pay less in-network, though. There may be no requirements to get referrals from a PCP, either. Again, most preventive care is covered at 100% emphasizing routine health care as a means to lower health care costs now and in the future. For this flexibility, your costs are usually higher.
- Point of Service plans are a hybrid of HMOs and PPOs. You get the flexibility to see in- or out-of-network doctors like a PPO, but your share of the costs will be higher. Like an HMO, you may be required to see a PCP to manage your care and provide you with referrals. Goal of a POS is similaroffer you options, while still managing to keep costs lower.
- Exclusive Provider Organization plans also combine features of HMOs and PPOs. Like a PPO, you may not be required to see a PCP or get a referral, but like an HMO you are often required to see in-network doctors to be covered. Cost for an EPO plan is usually higher than an HMO, but less than a PPO.
Learn more about HMOs, PPOs, and EPOs
Get Important News & Updates
Sign up for email and/or text notices of Medicaid and other FSSA news, reminders, and other important information. When registering your email, check the category on the drop-down list to receive notices of Medicaid updates check other areas of interest on the drop-down list to receive notices for other types of FSSA updates.
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Executive Commissioner’s Commitment To Improving Member And Provider Experience In Medicaid Managed Care
Executive Commissioner Chris Traylor held stakeholder meetings in 2015 to gather input on ways to improve the managed care landscape, from both the member and provider perspective. According to Executive Commissioner Traylor, the purpose was to improve provider experience in managed care and ultimately to ensure the 4.5 million people relying on the Medicaid and Children’s Health Insurance Program programs have appropriate access to services to enable them to live strong, productive lives. He also shared thoughts that it is important as Texas evolves from fee-for-service to managed care, to project future needs to create the best system possible.
HHSC responses were shared directly with stakeholder groups in February 2016, updates were posted to the website on April 11, 2016, and July 22, 2016, and biannual updates on items in progress or under discussion will continue to be shared on the website. Items that are closed as of the last update will be provided in a separate file as there will be no further update. Items were closed either as complete, no action to be taken, or other . In each update, changes to previous responses are noted with red strikethrough for language that is being removed in order to provide an update, and new language is provided in red.
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