Managed Care - April 2008 - (Page 46) Insurers Rush to Fill States’ Medicaid Needs The government program is a big — and still growing — business. Millions of members are being enrolled in managed care plans. By Tom Reinke additional eligibility groups such as the aged and the disabled, often mandating that enrollees leave fee-for-service Medicaid and enroll in managed care.” Medicaid managed care contracts between states and health plans take multiple forms, from primary care case management, where primary care physicians coordinate care, to programs with capitation carve-outs for limited services such as inpatient or outpatient services, to comprehensive, capitated full-risk plans. “Comprehensive managed care contracting is attractive to the states because capitation guarantees price predictability,” says Robert Hurley, PhD, associate professor of health administration at Virginia Commonwealth University. “Most states contract with several plans because it stimulates performance and gives them the flexibility to implement multiple strategies tailored to specific operational goals or to specific populations.” M edicaid managed care programs have made considerable progress from a tarnished beginning in the 1990s that saw some health plans pull out of unworkable contracts with state Medicaid agencies. Plans are now looking to expand their Medicaid business, and states are increasingly moving their medically needy populations into managed care to cap their costs and implement performance requirements designed to improve services. Quality concerns still flair up, but experts say things are moving forward. In August 2007, Aetna demonstrated its interest in Medicaid as a growth vehicle with the $535 million acquisition of Schaller Anderson, a Medicaidfocused company with over 600,000 members in several states. Aetna previously had approximately 150,000 Medicaid members. “It fits with Aetna’s acquisition strategy by improving our local market presence in state and federal programs while strengthening our ability to improve quality and manage medical costs,” said Ronald A. Williams, Aetna chairman and CEO. Medicaid is big business; there are about 45 million active enrollees at any point in time, and annual federal and state expenditures exceed $310 billion. The Kaiser Family Foundation says there were 19.8 million Medicaid members enrolled in comprehensive managed care plans in 2006, up from 12.4 million in 1999. Millions more are enrolled in limited forms of managed care. Alaska, Mississippi, New Hampshire, and Wyoming were the only states without comprehensive Medicaid managed care programs in 2006. “Most states have continued and are, in fact, expanding partnerships with Medicaid managed care plans begun in the 1990s,” says David Rousseau, principal policy analyst at the Kaiser Family Foundation. “Many are also expanding managed care to Emergence of “pure plays” Medicaid managed care plans are diverse. There are over 300 plans throughout the country — not-for-profit provider sponsored plans, for-profit plans from national multi-product companies such as UnitedHealthcare or Aetna, and several publicly traded “pure plays.” Pure plays are multistate, investor-owned Medicaid-only plans that have shown phenomenal growth. The four companies in this group are AmeriGroup, Centene, Molina, and WellCare. In 2006 alone they added 1.5 million members to their rolls from managed care expansion in Georgia, Ohio, and Texas. “The pure plays along with the plans owned by the national insurers such as Well- 46 MANAGED CARE / APRIL 2008
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