The experience of states involved with Medicaid managed care programs continues to vary greatly. Some states have experienced considerable success with their managed care initiatives, as evidenced by a diverse and stable set of participating plans. Other states have experienced disappointments and difficulties marked by declining viability and participation among health plans. A growing body of research indicates that Medicaid managed care is a complex undertaking that is being implemented and operated in an unstable and uncertain managed care marketplace.
This study updates earlier findings in terms of plan participation and performance in Medicaid and explores the variation in experiences among the states. Rate adequacy, which receives considerable attention in Medicaid managed care, clearly influences plan success and sustainability. However, capitation rates alone do not seem to determine success or failure. Our earlier study’s interviews with health plan executives suggested that many other factors influence their decisions to enter the Medicaid market and determine the success or failure of their Medicaid endeavors. These factors include program design, implementation, and operational management, as well as larger market forces that affect the readiness and willingness of plans to enter or to remain in Medicaid. Perhaps even more significant is the extent to which states project a desire to develop long-term partnerships with contracting plans.
Based on our earlier findings, we concluded that how and how well a state designs, operates, and manages its Medicaid managed care program is very important to its ultimate success. By focusing on the experiences in a selected set of states, we have attempted to develop a more comprehensive picture of what factors are causing variation in the state experiences. Building on our previous study, we initially developed a conceptual model of Medicaid managed care implementation that incorporates a broad range of factors. We devised an instrument to explore and enrich this model through interviews with representatives in eight states. A discussion of the implications of this research is presented with the goal of aiding states in achieving greater success in their Medicaid managed care initiatives.
This is part of a series of CHCS reports exploring the evolving managed care industry within publicly financed care (see the links below for additional reports in this series).