Managed care; in it for the long term: using managed care for Medicaid long-term care is once again getting states' attention.

AuthorFoxhall, Kathryn

Pamela Parker, director of Minnesota's managed long-term care programs, has reason to be proud. Provider-contractors under her program for people with disabilities got 21 percent of the those they serve out of nursing homes. And she notes that some contractors who use nurse practitioners to coordinate care for nursing home residents apparently have cut hospitalization rates in half.

But she is just as quick to warn that Minnesota's eight-year-old effort, which serves several specific rural and urban areas in the state, is unique to Minnesota. That state's good luck doesn't mean managed long-term care will work in states with different options, she says.

After a slow period of about a decade, there's now scattered new interest across the states in trying managed care for Medicaid long-term care for the elderly and for younger disabled people.

The idea is that contractors--nonprofit, commercial or governmental--will have the incentive to keep people out of nursing homes and in the least expensive appropriate level of care.

But despite some movement in the 1990s, the idea has not caught fire. There are probably several reasons, according to experts watching these trends. The backlash against managed care in general made the movement toward such arrangements politically unattractive. Many patient advocates and health care providers worry that a managed care organization's incentive to save money will result in fewer and worse services. Health care providers, including nursing homes, have resisted the idea of states contracting with managed care organizations that could then contract with only selected providers and also set the rates for services.

Other problems, according to observers, are a lack of providers to take on the managed care organization role, an absence of infrastructure in the states to implement and oversee the efforts, and the long planning time needed to get the work underway.

Currently, only about 2.3 percent of Medicaid long-term care beneficiaries are in managed care programs where there is risk to the provider for controlling costs, according to recent research from Medstat and the Muskie School of Public Service at tire University of Southern Maine. Most of those programs are in one of eight states scattered across tire United States, and most are relatively small.

Only Arizona has its entire Medicaid long-term care population, about 23,000 people, under a managed care plan. And, as of 2004, that state had more than twice the...

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