April, 1999

Looking Back at the Promises of Medicaid Managed Care

This article was written by the Consumers Union Southwest Regional Office.

In Brief

CU Review

Determining Utilization & Quality of Care in Managed Care Plans

Findings:

Recommendations

Common Acronyms

Footnotes

Consumers Union Review

Consumers Union reviewed the findings of studies by the Texas A&M Public Policy Research Institute (A&M)2, the Texas Health Quality Alliance (THQA)3, and Rudd and Wisdom, consulting actuary.4 These reports, as well as the TDH report to the legislature, cover fiscal year 1997.

Texas A&M conducted the biennial program review required by the federal Health Care Financing Administration. Texas A&M researchers estimated savings to Medicaid due to managed care. In addition, they conducted a telephone survey of randomly selected health care providers in managed care and a parallel survey of providers in fee for service Medicaid. They also conducted a survey of Medicaid clients in both managed care and fee-for-service (FFS). They followed these phone surveys with on-site interviews with clients, nurses, doctors, physician assistants and billing staff.

The Texas Health Quality Alliance is the contracted External Quality Review Organization for the state of Texas. For each contracting HMO, the Texas Health Quality Alliance audited medical records, reviewed managed care organization focus studies, attempted to audit and validate managed care organization encounter data and utilization reports, and conducted on-site review of HMO compliance with the requirements of the TDH contract.

Rudd and Wisdom, a private firm, contracted to provide an actuarial estimate of the savings to Medicaid due to the managed care pilots. As part of that analysis, Rudd and Wisdom produced a separate analysis of the effect of the managed care pilots on the Vendor Drug Program.

CU reviewed existing studies on the cost of the program and access issues particularly affecting pregnant women and children, and limited our review of access and care issues to the Travis County Service Delivery Area (Travis) and Bexar County Service Delivery Area (Bexar) pilots. We elected to highlight issues relating to women and children because these are the largest population groups in the Medicaid program. We selected Travis because it hosts the oldest Medicaid managed care program, and Bexar because it is a large program that hosts both HMO and PCCM plans.

We did not re-evaluate underlying data or information incorporated into these studies, although we did consider cost information not incorporated into the cost analyses. Instead we merely read them, and report here many findings that we believe cry out for attention from the Legislature, the Department of Health, and the Health and Human Services Commission, State Medicaid Office. In cases where data problems outlined by the researchers clearly undermine the quality of the information, we note these problems.

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