Medicaid has a Managed Care Future

By 2020, an estimated 85% of Medicaid beneficiaries are expected to be enrolled in a managed care organization — a significant increase from the nearly 50% that are currently enrolled. "There is tremendous upside potential for serving this population going forward," said Dr Vern Smith, managing principal at Health Management Associates.

As the Affordable Care Act (ACA) seeks to control the growing trend of cost expenditures, states are looking to reform current healthcare programs like Medicaid. Nearly 78% of Medicaid reimbursements are based on the outdated fee-for-service model, which has “become a thing of the past” according to Michael Rashid, board chair to Medicaid Health Plans of America (MHPA).

A recent Kaiser Family Foundation survey found that 36 states currently contract with managed care organizations on at-risk basis, while another half contract with those organizations for provisional services like behavioral health or prescription drugs. Both the number of participating states and the extent of involvement is only expected to increase. Additionally, during 2014, 14 states are expected to make changes to their managed long-term care.

Of course, as managed care grows, so does the risk to providers as they become more accountable for the care they provide to patients.

"You need to have a single entity that's responsible for outcomes and hold that entity accountable for that, and that's what we're trying to do in Arizona," commented Thomas Betlach, Medicaid director in Arizona.

Matt Salo, executive director of the National Association of Medicaid Directors, added that as healthcare evolves and Medicaid expands under the ACA, more people can expect to be treated under a managed care organization’s care. To reach its full potential, current models will have to adjust. "The potential value both from a quality standpoint and also a cost standpoint is huge," Salo said. "But so is the leap in terms of the complexity that is required."

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Managed Care Seen as Future of Medicaid [Med Page]