Kaiser Family Foundation Survey on State Medicaid Managed Care ...

A note on Medicaid managed care terminologyIn the private health insurance world, “managed care” usually refers to an arrangement in which a healthmaintenance organization (HMO) – a closed panel of physicians, hospitals, and other providers – provides acomprehensive set of contractually-defined covered services for an enrolled population, for which it is paid a permember per month premium, known as a capitation payment. The HMO is at financial risk for the full cost ofservices provided. In Medicaid, managed care encompasses more varied approaches to delivering and financingcare, including risk-based arrangements with HMOs, but also contracts with other health plans for a noncomprehensiveset of services, as well as non-risk or partial risk arrangements through state-administered primarycare case management programs (described below). The KCMU/HMA survey collected information from statesregarding the three basic models of Medicaid managed care recognized under federal law and regulations:Risk-based managed care organizations (MCOs) or health plans. States contract with MCOs to provide acomprehensive package of benefits to enrolled Medicaid beneficiaries, primarily on a capitation basis (i.e., thestate pays a per-member-per-month (PMPM) premium to the plan).* Medicaid MCOs may be commercial HMOsthat also serve people with employer-sponsored insurance, or they may be Medicaid-only plans with nocommercially insured members. States develop their own Medicaid standards of participation for MCOs, whichusually include adherence to specified protocols for enrollment and member support, requirements to ensureadequate to access to care, achievement of set benchmarks for quality and quality improvement, and datacollection and submission requirements. Medicaid MCOs may be licensed by the state, or they may operate undera contract with the Medicaid agency regardless of licensure.Primary Care Case Management (PCCM) programs. PCCM programs are also considered a form of comprehensiveMedicaid managed care. These state-administered programs build on the Medicaid fee-for-service system. Statescontract with Primary Care Providers (PCPs) who agree to provide case management services to Medicaidenrollees assigned to them, including the location, coordination, and monitoring of primary health services. Statesgenerally set specific requirements for PCPs, such as the ability to provide a set of primary care services, minimumhours of operation at each location, specific credentials or training, and responsibility for referrals to specialists. Inaddition to fee-for-service reimbursement for services delivered, PCPs are usually paid a nominal monthly casemanagement fee. PCPs are usually physicians, physician group practices or clinics (such as federally qualifiedhealth centers), but a state may also recognize nurse practitioners, nurse midwives, and physician assistants asPCPs. State Medicaid staff carry out (or sometimes contract out) the administrative functions related to PCCMprograms, from network development and credentialing to quality monitoring and improvement, and the stateusually (though not always) assumes full financial risk.Non-comprehensive prepaid health plans (PHPs). States contract with PHPs on a risk basis to provide eithercomprehensive or non-comprehensive benefits to enrolled Medicaid beneficiaries. Federal regulations that governMedicaid managed care refer to MCOs as a comprehensive type of PHP, and identify two types of noncomprehensivePHPs. A prepaid inpatient health plan (PIHP) provides, arranges for, or otherwise has responsibilityfor a defined set of services that includes some type of inpatient hospital or institutional services, such as inpatientbehavioral health care. A prepaid ambulatory health plan (PAHP) provides, arranges for, or otherwise hasresponsibility for some type of outpatient care only. Common types of non-comprehensive PHPs provide onlybehavioral health services or only dental services, which, in many instances, are “carved out” of the benefitpackage provided by MCOs. Like MCOs, non-comprehensive PHPs may be state-licensed or may operate under acontract with the Medicaid agency regardless of licensure.__________________________*“Comprehensive” is defined in federal regulations (at 42 CFR §438.2) as inpatient hospital services and any of thefollowing services, or any three or more of the following services: (1) outpatient hospital services; (2) rural healthclinic services; (3) FQHC services; (4) other laboratory and x-ray services; (5) nursing facility services; (6) early andperiodic screening, diagnostic, and treatment (EPSDT) services; (7) family planning services; (8) physician services,and (9) home health services.12 00