Funder: Kaiser Permanente Community Benefit with additional support from the Robert Wood Johnson Foundation

Author: Melanie Bella, Claudia Williams, Lindsay Palmer, Stephen A. Somers

November 2006 | Report


States are increasingly using managed care to provide accountable “medical homes” for Medicaid beneficiaries, not only for children and families, but also for adults with chronic conditions and seniors. Today’s definition of managed care, however, has broadened beyond the traditional capitated model. States are using a variety of innovative strategies, including enhanced primary care case management and comprehensive care management, to administer high-quality, cost-effective care.

This CHCS report provides a comprehensive look at the current Medicaid managed care environment from the perspectives of 14 states – California, Colorado, Florida, Georgia, Hawaii, Kentucky, Maryland, Michigan, Ohio, Oregon, Pennsylvania, Texas, Washington, and Wisconsin. Interviews with Medicaid directors and staff in these states offer valuable insights about states’ plans for managed care expansions, promising practices for improving quality through value-based purchasing, and innovative trends in the Medicaid managed care marketplace.

The interviews revealed that states have become more sophisticated purchasers in reaction to external budget pressures and through the realization that they can use their purchasing leverage to obtain better value. The interviewed states are adopting new tools to achieve quality and efficiency improvements, including: new approaches for managing care; incentives for improving performance; standardized measures; consumer engagement strategies; and methods of systematically collecting encounter data. By using a variety of innovative managed care models, these states are demanding more value for public health expenditures and are developing mechanisms to deliver high-quality, cost-effective care for Medicaid’s beneficiaries with the most complex and highest-cost needs.