April, 1999

Looking Back at the Promises of Medicaid Managed Care

This article was written by the Consumers Union Southwest Regional Office.
Available in PDF Format

In Brief CU Review Determining Utilization & Quality of Care in Managed Care Plans Findings: Access & Quality of Care Data Quality Cost to the State   Recommendations Common Acronyms Footnotes

Medicaid managed care promised to improve access to doctors and increase continuity of care, all at a lower cost. Instead we have lost our ability to accurately track services provided, we cannot determine quality of care, and the state's savings figures don't add up. - Consumers Union Southwest Regional Office In Brief In 1993, Texas launched its first pilot project to enroll Medicaid recipients in commercial managed care organizations. Most people agreed that access to a commercial HMO should allow a Medicaid recipient to easily find a doctor (solving a major problem with the old fee-for-service system), while utilization management should lower program costs. In 1995, the state drafted an 1115 Waiver designed to cover more people through Medicaid, guarantee a period of continuous eligibility, and expand managed care across the state. While the 1115 Waiver failed, managed care expansion continued on a "pilot" basis. Recently, the Texas Department of Health submitted its Texas Medicaid Managed Care Report (Summary Report)1 to the Legislature. The report states that managed care has improved access to primary care providers and saved the state $35.6 million (for FY 1997). The report cites the mandatory, independent evaluations of the managed care program, as well as data submitted to the Texas Department of Health (TDH) by health plans and Maximus, the program's enrollment broker. But do these sources really support the findings outlined by the Department? Consumers Union Southwest Regional Office reviewed the independent evaluations of the Medicaid managed care program-focusing on two service areas and a series of specific questions about health care for women and children-and found that the independent researchers presented a much gloomier picture. Also, aggregate information about the program as a whole obfuscates critical problems in each of the service areas. Evaluators found serious problems with access to prenatal care and specialists, continuity of care, and delays in the enrollment process. Studies found significant inaccuracies in the state's data on managed care that undermine program evaluation. Two independent evaluations looked at the cost of the managed care program (as compared to fee-for-service Medicaid) and TDH used the most favorable figures. But the favorable evaluation excluded important cost factors that change the picture considerably. Taking all costs into consideration, there is little statistically significant savings due to managed care.   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 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. Consumers Union recommends that the state: stop and assess its progress addressing existing problems in the managed care program before contracting in any new expansion areas; create an accelerated enrollment process for pregnant women and newborns; enforce standards for data collection to ensure the state can assess quality of care and services utilized in the long term, including mandatory reporting from physician offices to managed care entities and to the state; increase TDH staff for contract supervision and compliance to ensure that HMOs and other state contractors address problems as they arise; make all independent evaluations, including actuarial studies of program costs, readily available to the public, including posting on the internet, and include adequate methodological information for advocates and the public to reasonably understand the information provided.

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