Medicaid Managed Care for Children with Special Health Care Needs: Examining Legislative and Judicial Constraints on Privatization

• Published date: 01 March 2004
• Author: Kyle P. Meyer,Christine M. Reed
• Date: 01 March 2004
• DOI: http://doi.org/10.1111/j.1540-6210.2004.00364.x

234 Public Administration Review •March/April 2004, Vol. 64, No. 2

Christine M. Reed

University of Nebraska–Omaha

Kyle P. Meyer

University of Nebraska Medical Center

Medicaid Managed Care for Children with

Special Health Care Needs: Examining Legislative

and Judicial Constraints on Privatization

Over the past decade, much has been written about the results of reinventing government. Most

research has examined the effects of executive or managerial perspectives. Using David

Rosenbloom’s competing perspectives model, we examine Medicaid managed care programs for

children with special health care needs to illustrate the influence of legislative and judicial institu-

tional perspectives on the reinvention movement. Legislative and judicial responses to the reinven-

tion of Medicaid managed care reveal the outer limits of what managed care and related execu-

tive reforms can accomplish in a Constitutional system that is based on checks and balances

among competing institutional perspectives. Furthermore, relative to Medicaid managed care,

legislative and judicial responses conserve public responsibility to society’s most vulnerable popu-

lations. In the long run, the balance of institutional perspectives and values—not managerial inno-

vation per se—will influence public administration.

Medicaid managed care programs now operate in virtu-

ally all 50 states. They are based on waiver provisions in

federal law that permit state Medicaid agencies to limit a

client’s freedom of choice of physicians and other indi-

vidual rights. With a primary emphasis on competitive

contracting and performance measures, some argue the

adoption of managed care has reinvented the public health

care bureaucracy (Portz, Rocchefort, and Reidy 1999).

Although it originated in the private market, managed care

attracted the attention of public officials as a policy tool

for addressing the crisis in public health. Health services

research had suggested that many acute and chronic ill-

nesses associated with poverty are preventable and, as Long

and Coughlin (2001) point out, managed care became at-

tractive to the public sector for several reasons:

•To control Medicaid program costs

•To improve beneficiaries’ access to health care

•To improve quality of care

•To provide recipients with a medical home

•To promote primary (preventive) health care.

As a result of the Balanced Budget Act of 1997, states

have even greater flexibility in adopting mandatory man-

aged care (federal rules governing state programs were

not yet final at the time this paper was written). States

may no longer be required to periodically apply for waiv-

ers to operate Medicaid managed care programs; however,

they are likely to have to meet certain criteria, including

providing a choice of at least two managed care plans and

management systems for monitoring quality and appro-

priateness of care (Holahan et al. 1998). In addition, the

Christine M. Reed is a professor of public administration and chair of the

doctoral program committee of the School of Public Administration at the

University of Nebraska–Omaha. Her teaching and research interests include

administrative law, environmental policy, and environmental ethics. She is

the outgoing chair of ASPA’s Section on Public Law and Administration and

the chair of the Section on Natural Resources and Environmental Adminis-

tration. E-mail: creed@mail.unomaha.edu

Kyle P. Meyer is an assistant professor and director of clinical education in

physical therapy at the University of Nebraska Medical Center. He is a li-

censed physical therapist with more than 20 years of experience in services

for children with special health care needs. He is currently enrolled in the

public administration doctoral program at the University of Nebraska–

Omaha’s School of Public Administration. E-mail: kpmeyer@unmc.edu.