Medicaid Managed Care and Cost Containment in the Adult Disabled Population
Despite the increasing enrollment of adult disabled beneficiaries into Medicaid managed care organizations (MCOs), there is little evidence of its (hoped for) effectiveness at reducing Medicaid expenditures.
To evaluate the impact of Medicaid MCOs on healthcare expenditures for adults with disabilities.
I employ a repeated observations design comparing individual monthly Medicaid expenditures across beneficiaries who reside in counties with mandatory, voluntary, and no MCOs. County-level Medicaid MCO program status for adults with disabilities was merged with the Medical Expenditure Panel Survey and the Area Resource File for 1996-2004. Two-part regression models are used to estimate the probability and level of Medicaid expenditure.
Working age Medicaid beneficiaries who receive Supplement Security Income for disability comprise the sample of 1613 individuals.
Outcome measures include total and service-specific Medicaid expenditures.
On average, total monthly Medicaid expenditures per beneficiary do not differ between FFS and MCO counties although some service-specific spending differs. Relative to FFS counties, average monthly Medicaid spending per beneficiary is higher for prescription medications in voluntary ($24) and mandatory ($25) MCO counties. Average Medicaid monthly spending for other medical care and dental care is $4 to $11 higher per beneficiary in MCO relative to FFS counties.
Medicaid MCO programs as implemented are not associated with lower Medicaid spending; thus, state Medicaid programs should consider additional policy tools to contain healthcare expenditures in this population.
Overview of article
- The characteristics that make beneficiaries with disabilities expensive, their complex, chronic health conditions, have led to conflicting expectations about Medicaid managed care’s potential to contain spending in this unique population. This paper compares Medicaid health care expenditures for adults with disabilities (AWDs) across three Medicaid program types: FFS, mandatory managed care organizations (MCOs), and voluntary MCOs, and provides the first national estimates of Medicaid health care expenditures associated with mandatory and voluntary Medicaid MCO programs relative to FFS programs for adults with disabilities
- This study employs a repeated observations design comparing individual monthly Medicaid expenditures across beneficiaries who reside in counties with mandatory, voluntary, and no MCOs. County-level Medicaid MCO program status for adults with disabilities was merged with the Medical Expenditure Panel Survey and the Area Resource File for 1996–2004. Two-part regression models are used to estimate the probability and level of Medicaid expenditure
- The sample population are ages 18–64 who report enrollment in Medicaid and the federal cash assistance program for persons with disabilities, the Supplemental Security Income (SSI) program. Medicare beneficiaries are excluded from this study because they are not uniformly subject to the same requirements within Medicaid MCOs as are Medicaid-only beneficiaries
- This study’s principal finding suggests that states consider additional policy tools to contain healthcare expenditures in this population. Relative to FFS counties, average total per beneficiary Medicaid expenditures do not differ in mandatory or voluntary MCO counties. On average, the study finds that a shift from Medicaid FFS to Medicaid MCO care for adults with disabilities is not associated with a reduction in health care spending. Ideally, this finding will stimulate additional research on the relative effectiveness of Medicaid cost and care management strategies for this vulnerable and expensive population
- Enhanced home and personal care services, for example, may obviate the need for downstream (expensive) care in a population that has mobility impairments; whereas, integration of social support services into health care delivery may be an effective strategy to reduce ED visits among socially isolated or mentally ill individuals. These small, but growing, programs may offer a fruitful alternative to population-wide care management strategies
- Future research will ideally address both the heterogeneity of the adult disabled beneficiary population and the variety of care management strategies in place (or in development) to manage them. It is plausible that different models of care and financing may have differential effects depending on the beneficiary’s disabling condition or cluster of co-morbidities