Many states are looking to managed care partners to help them meet their expanded coverage responsibilities in 2014. As they address Medicaid spending and simultaneously prepare for expansion, being able to rely on effective purchasing from managed care entities has great appeal. This includes states turning to managed care for the first time, as well as states beginning to develop managed care approaches for high-need, high-cost populations, such as children with complex needs, seniors and adults with disabilities, adults in need of long-term care, awnd those dually eligible for Medicaid and Medicare.

In FY2010, more than a dozen states expanded managed care for Medicaid beneficiaries, with as many as 20 states planning managed care expansions in FY2011. For these states, the most critical ingredient for success is for Medicaid to be an active purchaser – from the request for proposal phase through setting contract expectations and monitoring performance.

This brief outlines eight lessons for effective managed care drawn from the Center for Health Care Strategies’ (CHCS) experiences in working with states over the past 15 years. These lessons are particularly important for managing the care of the program’s highest-cost subset of beneficiaries with chronic conditions and disabilities.