Press Release April 5, 1999	Contact: Lisa McGiffert or Rafael Ayuso (512) 477-4431 Consumers Union's Southwest Regional Office

 Report: Medicaid pilot programs
full speed ahead despite ailments

AUSTIN, TX -- Serious problems plague the state's Medicaid managed care pilot program six years after it was launched, but the problems get brushed aside as the Texas Department of Health (TDH) launches new pilots around the state, a study released by Consumers Union today says.

The study found fundamental differences between TDH's claim that managed care has improved access to care and saved millions of dollars in Texas and recent independent evaluations of the pilot program.

"One could say that rumors of the program's success have been vastly exaggerated," said Lisa McGiffert, a senior policy analyst with CU's Southwest Regional Office. "Program evaluations released this year and last indicate that Medicaid patients in managed care may not be able to get the care they need, when they need it."

The study reviewed the findings of independent evaluations by the Texas A&M Public Policy Research Institute, the Texas Health Quality Alliance (THQA) and Rudd and Wisdom, a TDH consultant actuary. In a nutshell, problems were found with:

· access to prenatal care and specialists
· continuity of care
· delays in the eligibility and enrollment process
· data collection and interpretation.

Moreover, cost savings due to managed care may be insignificant. Two studies compared costs under managed care pilots to projected costs of fee-for-service Medicaid in these areas. Rudd and Wisdom found that managed care saves money, but did not consider all the system costs. A&M considered more of the system costs and found minimal savings. Neither study considered the extra costs for the enrollment broker and the Preliminary Care Case Management administrator, among other costs. Consumers Union reviewed the cost issues and found that additional costs reduce savings estimates to an insignificant level.

"Until now, the state has rolled out managed care programs in one city after another, always focused more on the next implementation phase than the repercussions of the existing pilots for Medicaid enrollees and their doctors," the report says. "The Department of Health, as both implementing agency and supervisor of the evaluation process, has a strong interest in demonstrating that the system works. While the new pilots rolling out in Dallas and El Paso may be too far along to halt, the Department should focus on fixing the existing problems quickly."

The program evaluation by Texas A&M surveyed doctors and found that HMO doctors in Bexar were significantly more likely to say that managed care had decreased continuity of care and report a loss in quality of care than PCCM doctors. In Travis, HMO providers were more likely to believe that state policies restrict medical services than providers in fee-for-service.

Access to health care for those with an immediate need - particularly women who become eligible for Medicaid at the time of their pregnancy - may have actually declined under managed care due to a much more complex enrollment process before they can see a doctor. In Travis, A&M reported a significant gap between the time a woman enrolls and the time she gets her first prenatal visit which compromises prenatal care. And, HMO recipients in Bexar were less likely to rate the medical care they received while pregnant as good or excellent compared to PCCM or fee-for-service recipients.

Significant problems were also found with available data about the services Medicaid clients are getting, hampering efforts to establish whether access and quality have improved or declined in managed care areas. The audit of HMO "focus studies", which were designed to enable people to compare plans on issues relating to prenatal care and child health, found that different interpretations of the study design by plans, along with data collection and sample size problems, significantly limit their usefulness. Encounter data, the record of services actually received by enrollees, is incomplete. Only 30.2 percent of "encounters" in patient medical records appear in the HMO database.

CU's chief recommendation is for the Legislature to assess whether the program whether is cost effective, improves access and warrants further expansion. Also, the Legislature should pass a bill to expedite eligibility and enrollment of pregnant women and newborns so they get the care they need, when they need it. The report also called on TDH to substantially improve data collection and quality to better monitor the effectiveness of the Medicaid pilot program.

Copies of the report are available upon request.