Medicaid, Managed Care, and ACOs

Mar 04, 2013 | Labs Blog

lesliefrancisLast week, Florida Governor Rick Scott announced that Florida had been granted a waiver to allow greater flexibility in its Medicaid program.  Florida sought waivers for its medical assistance program demonstration project and for its long-term care program. Low income families, children in foster care, and Medicare/Medicaid dual eligibles, anong other groups, will be required to enroll in selected managed care plans. After receiving the waivers, Governor Scott supported Florida’s participation in the Medicaid expansion of ACA, at least for a three year period. The support came as a surprise to some, and it remains unclear whether Republicans in the Florida legislature will regard the expansion favorably.

Florida’s section 1915 long term care waiver has been fully approved by CMS and the waiver to allow a managed care demonstration project in Florida’s medical assistance program has been approved in principle.  The Florida legislation requiring the state to pursue managed care contains elaborate provisions to support access and care quality.  These issues were specifically addressed in the letter from CMS expressing agreement in principle to Florida’s waiver for its managed care demonstration project.  Florida’s demonstration project must also include selection of at least one provider group in every area where a group meeting standards applies.

Not surprisingly given rising Medicaid costs, Florida is not the only state pursuing managed care for Medicaid.  In 2011, Utah also passed a Medicaid managed care statute (SB 180), but one with far less detail about quality measures than Florida’s.  Utah’s waiver request was specific that the state sought to understand accountable care organizations in general terms as organizations that were willing to accept capitated payments and could meet quality standards. This understanding of accountable care organizations is very different from the federal sense of “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve. Coordinated care helps ensure that patients, especially the chronically ill, get the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.”  The federal ACO goals are coordination by providers to improve care quality and thereby reduce costs through better patient management; ACO receive financial incentives, but only if they achieve quality goals along with cost savings. Unlike Florida, Utah does not include the requirement to offer provider groups among the managed care options for patients. The concerns of critics are that together with the capitation reimbursement structure, Utah’s quality measures such as CAHPS and HEDIS are insufficient to prevent reversion to managed care of the more purely cost-saving variety. Utah has not yet decided whether to accept the ACA Medicaid expansion.

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Leslie P. Francis
Associate Dean for Faculty Research and Development and Alfred C. Emery Professor of Law, and Professor of Philosophy