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Congressional Budget Office Association for Public Policy Analysis & Management Fall Research Conference November 2, 2017 ...
1CONGRESSIONAL BUDGET OFFICE Medicaid is a federal–state program that provides health benefits to over 70 million low-inco...
2CONGRESSIONAL BUDGET OFFICE States typically use two payment systems: fee-for-service (FFS) and Medicaid managed care (MM...
3CONGRESSIONAL BUDGET OFFICE This project aims to improve our understanding of:  Whether MMC is “the predominant delivery...
4CONGRESSIONAL BUDGET OFFICE Key to understanding the growth in MMC is understanding the difference between the percentage...
5CONGRESSIONAL BUDGET OFFICE Percentage of Total Medicaid Enrollment and Spending Accounted for by MMC 0% 20% 40% 60% 80% ...
6CONGRESSIONAL BUDGET OFFICE A major challenge to understanding the growth of MMC is the variation in state programs and t...
7CONGRESSIONAL BUDGET OFFICE Beneficiaries’ Enrollment in and Spending on Medicaid Managed Care
8CONGRESSIONAL BUDGET OFFICE CBO used Medicaid Analytic eXtract data on beneficiaries’ spending and enrollment from 1999 t...
9CONGRESSIONAL BUDGET OFFICE Types of Managed Care Organizations (MCOs) Comprehensive MCOs  General Comprehensive  Long-...
10CONGRESSIONAL BUDGET OFFICE Enrollment in Medicaid Payment Systems, 2012 Millions of Beneficiaries 6.3 11.8 10.2 6.5 15....
11CONGRESSIONAL BUDGET OFFICE Average Monthly Spending on Payments for MMC and FFS, 2012 Payments for MMC Payments for FFS...
12CONGRESSIONAL BUDGET OFFICE 1 2 1 3 2 8 2 3 8 22 3 2 12 31 6 7 Nonelderly Adults Children Elderly and Disabled Beneficia...
13CONGRESSIONAL BUDGET OFFICE Average Monthly Spending on Payments for MMC and FFS, 2012 $175 $117 $1,068 $1,169 $241 $125...
14CONGRESSIONAL BUDGET OFFICE Percentage of Total Medicaid Enrollment Accounted for by Comprehensive MMC and of Total Spen...
15CONGRESSIONAL BUDGET OFFICE Percentage of Total Medicaid Enrollment Accounted for by Comprehensive MMC and of Total Spen...
16CONGRESSIONAL BUDGET OFFICE Annual Per-Beneficiary FFS Medicaid Spending Among Nonelderly Adults and Children in Compreh...
17CONGRESSIONAL BUDGET OFFICE Annual Per-Beneficiary FFS Medicaid Spending Among Elderly and Disabled and Dual-Eligible Be...
18CONGRESSIONAL BUDGET OFFICE Changes in States’ MMC Programs Between 1999 and 2014
19CONGRESSIONAL BUDGET OFFICE Difference in Percentage of Spending Attributed to Payments for MMC
20CONGRESSIONAL BUDGET OFFICE Number of States With Any Type of MMC by Program Type 45 0 1 41 29 2 General Comprehensive P...
21CONGRESSIONAL BUDGET OFFICE Of States With General Comprehensive MMC, Percentage With Programs That Were Statewide or Re...
22CONGRESSIONAL BUDGET OFFICE Of States With General Comprehensive MMC, Percentage That Mandated Enrollment by Eligibility...
23CONGRESSIONAL BUDGET OFFICE Of States With General Comprehensive MMC, Percentage That Covered Various Types of Services ...
24CONGRESSIONAL BUDGET OFFICE Key Takeaways
25CONGRESSIONAL BUDGET OFFICE By integrating quantitative and qualitative data, CBO developed a more in-depth perspective ...
26CONGRESSIONAL BUDGET OFFICE Measurement matters:  MMC growth may be defined in terms of spending or enrollment.  Compr...
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Nov. 02, 2017

Exploring the Growth of Medicaid Managed Care

States typically use two types of payment system to provide Medicaid benefits: fee-for-service (FFS) and managed care. In FFS Medicaid, the state reimburses health care providers for the services they deliver to beneficiaries. In contrast, in Medicaid managed care, states pay private health insurance plans or provider groups (called managed care organizations or MCOs) to provide services to enrollees. In this presentation, we use individual-level data to examine trends in the proportion of Medicaid beneficiaries who receive benefits through managed care and the proportion of Medicaid spending that consists of payments for managed care. We also use qualitative data about state programs’ characteristics to examine the changes in state policies that have affected enrollment in and spending for Medicaid managed care.
From 1999 to 2012, the share of Medicaid beneficiaries enrolled in managed care grew from 64 percent to 89 percent. The share of Medicaid spending attributed to payments for managed care was much smaller, however, rising from 15 percent to 37 percent during that period. The percentage of beneficiaries enrolled in managed care exceeds the percentage of Medicaid spending that pays for managed care for three main reasons. First, although many beneficiaries are enrolled in MCOs that cover a broad range of benefits (under “comprehensive” Medicaid managed care programs), many of those beneficiaries receive some benefits through FFS Medicaid. Second, many beneficiaries are enrolled in MCOs that cover only a narrow range of benefits and receive most of their services through FFS Medicaid. Third, enrollment in managed care is more common among beneficiaries in eligibility groups that have lower average Medicaid spending.
Medicaid managed care grew primarily because state policies expanded the scope of comprehensive managed care programs in three ways. First, comprehensive managed care programs became more likely to cover an entire state rather than only certain counties, cities, or regions. Second, mandatory enrollment in comprehensive managed care became more common among all eligibility groups. Third, states increased the scope of services included in their contracts with MCOs; the most pronounced increases occurred for long-term services.

Presentation by Alice Burns, Ben Layton, Noelia Duchovny, and Lyle Nelson, all of CBO’s Health, Retirement, and Long-Term Analysis Division, at the Association for Public Policy Analysis and Management’s Fall Research Conference.

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Exploring the Growth of Medicaid Managed Care

  1. 1. Congressional Budget Office Association for Public Policy Analysis & Management Fall Research Conference November 2, 2017 Alice Burns, Ben Layton, Noelia Duchovny, and Lyle Nelson Health, Retirement, and Long-Term Analysis Division The information in this presentation is preliminary and is being circulated to stimulate discussion and critical comment as developmental work for analysis for the Congress. Exploring the Growth of Medicaid Managed Care
  2. 2. 1CONGRESSIONAL BUDGET OFFICE Medicaid is a federal–state program that provides health benefits to over 70 million low-income individuals and accounted for $348 billion of federal spending and $205 billion in state spending in fiscal year 2015.
  3. 3. 2CONGRESSIONAL BUDGET OFFICE States typically use two payment systems: fee-for-service (FFS) and Medicaid managed care (MMC). States may adopt MMC to:  Increase predictability of spending or  Improve coordination of care, which may reduce costs or improve outcomes.
  4. 4. 3CONGRESSIONAL BUDGET OFFICE This project aims to improve our understanding of:  Whether MMC is “the predominant delivery system in Medicaid” and  How and why MMC has grown over time. The project will therefore inform expectations for future growth.
  5. 5. 4CONGRESSIONAL BUDGET OFFICE Key to understanding the growth in MMC is understanding the difference between the percentage of Medicaid enrollment in MMC and the percentage of Medicaid spending that is attributed to payments for MMC.
  6. 6. 5CONGRESSIONAL BUDGET OFFICE Percentage of Total Medicaid Enrollment and Spending Accounted for by MMC 0% 20% 40% 60% 80% 100% 1999 2001 2003 2005 2007 2009 2011 Enrollment Spending
  7. 7. 6CONGRESSIONAL BUDGET OFFICE A major challenge to understanding the growth of MMC is the variation in state programs and the lack of systematic data. We constructed and plan to disseminate a new dataset to support comparisons of states’ MMC programs.
  8. 8. 7CONGRESSIONAL BUDGET OFFICE Beneficiaries’ Enrollment in and Spending on Medicaid Managed Care
  9. 9. 8CONGRESSIONAL BUDGET OFFICE CBO used Medicaid Analytic eXtract data on beneficiaries’ spending and enrollment from 1999 to 2012 (the most recent period for which the data were available). Analyses included beneficiaries who were eligible for full Medicaid benefits.
  10. 10. 9CONGRESSIONAL BUDGET OFFICE Types of Managed Care Organizations (MCOs) Comprehensive MCOs  General Comprehensive  Long-Term Services  The Program of All-inclusive Care for the Elderly (PACE) Noncomprehensive MCOs  Behavioral  Dental  Case Management  “Other”
  11. 11. 10CONGRESSIONAL BUDGET OFFICE Enrollment in Medicaid Payment Systems, 2012 Millions of Beneficiaries 6.3 11.8 10.2 6.5 15.0 6.3 1 Comprehensive MCO only Comprehensive MCO, multiple MCOs Comprehensive MCOs, multiple MCOs, and FFS 1 Comprehensive MCO and FFS Noncomprehensive MCO(s) and FFS FFS only
  12. 12. 11CONGRESSIONAL BUDGET OFFICE Average Monthly Spending on Payments for MMC and FFS, 2012 Payments for MMC Payments for FFS Medicaid $118 $526 $1,329 $321 $27$439 $553 $1,329 Comprehensive MMC Noncomprehensive MMC FFS Only
  13. 13. 12CONGRESSIONAL BUDGET OFFICE 1 2 1 3 2 8 2 3 8 22 3 2 12 31 6 7 Nonelderly Adults Children Elderly and Disabled Beneficiaries Dual-Eligible Beneficiaries Enrollment by Medicaid Eligibility Group, 2012 Millions of Beneficiaries Comprehensive MMC FFS Only Noncomprehensive MMC
  14. 14. 13CONGRESSIONAL BUDGET OFFICE Average Monthly Spending on Payments for MMC and FFS, 2012 $175 $117 $1,068 $1,169 $241 $125 $534 $233 $416 $242 $1,602 $1,402 Nonelderly Adults Children Elderly and Disabled Beneficiaries Dual-Eligible Beneficiaries Payments for MMC Payments for FFS Medicaid
  15. 15. 14CONGRESSIONAL BUDGET OFFICE Percentage of Total Medicaid Enrollment Accounted for by Comprehensive MMC and of Total Spending Accounted for by MMC 0% 25% 50% 75% 1999 2001 2003 2005 2007 2009 2011 Percentage Nonelderly Adults Enrollment Spending 0% 25% 50% 75% 1999 2001 2003 2005 2007 2009 2011 Percentage Children Enrollment Spending
  16. 16. 15CONGRESSIONAL BUDGET OFFICE Percentage of Total Medicaid Enrollment Accounted for by Comprehensive MMC and of Total Spending Accounted for by MMC 0% 25% 50% 75% 1999 2001 2003 2005 2007 2009 2011 Percentage Elderly and Disabled Enrollment Spending 0% 25% 50% 75% 1999 2001 2003 2005 2007 2009 2011 Percentage Dual-Eligible Enrollment Spending
  17. 17. 16CONGRESSIONAL BUDGET OFFICE Annual Per-Beneficiary FFS Medicaid Spending Among Nonelderly Adults and Children in Comprehensive MMC, 2012 $84 $81 $53 $49 $35 $34 Mental/ Substance Use Prescription Drugs Clinic/ Outpatient Nonemergency Dental Other Acute Care Inpatient Hospital Total Spending per Beneficiary $2,783 Payments for MMC $2,408 Payments on FFS Medicaid $374
  18. 18. 17CONGRESSIONAL BUDGET OFFICE Annual Per-Beneficiary FFS Medicaid Spending Among Elderly and Disabled and Dual-Eligible Beneficiaries in Comprehensive MMC, 2012 $1,002 $450 $440 $429 $385 $261 Home/ Community Services Mental/ Substance Use Other Acute Care Prescription Drugs Institutional Care Inpatient Hospital Total Spending per Beneficiary $14,912 Payments for MMC $11,509 Payments on FFS Medicaid $3,403
  19. 19. 18CONGRESSIONAL BUDGET OFFICE Changes in States’ MMC Programs Between 1999 and 2014
  20. 20. 19CONGRESSIONAL BUDGET OFFICE Difference in Percentage of Spending Attributed to Payments for MMC
  21. 21. 20CONGRESSIONAL BUDGET OFFICE Number of States With Any Type of MMC by Program Type 45 0 1 41 29 2 General Comprehensive PACE Long-Term Services 16 2 4 27 8 16 7 12 21 7 Behavioral Dental Transportation Case Management Other Comprehensive Noncomprehensive 1999 2014
  22. 22. 21CONGRESSIONAL BUDGET OFFICE Of States With General Comprehensive MMC, Percentage With Programs That Were Statewide or Regional 47% 62% 83% 32% Statewide Programs Regional Programs 1999 2014
  23. 23. 22CONGRESSIONAL BUDGET OFFICE Of States With General Comprehensive MMC, Percentage That Mandated Enrollment by Eligibility Group 76% 73% 44% 18% 93% 88% 76% 41% Nonelderly Adults Children Elderly and Disabled Beneficiaries Dual-Eligible Beneficiaries 1999 2014
  24. 24. 23CONGRESSIONAL BUDGET OFFICE Of States With General Comprehensive MMC, Percentage That Covered Various Types of Services 100% 98% 73% 71% 76% 58% 11% 4% 95% 90% 78% 78% 68% 66% Hospital and Acute Care Postacute care Prescription Drugs Mental/Substance Use Nonemergency Transportation Nonemergency Dental Institutional Care Home/Community Services 1999 2014
  25. 25. 24CONGRESSIONAL BUDGET OFFICE Key Takeaways
  26. 26. 25CONGRESSIONAL BUDGET OFFICE By integrating quantitative and qualitative data, CBO developed a more in-depth perspective on the growth of MMC and created a dataset to support future empirical research.
  27. 27. 26CONGRESSIONAL BUDGET OFFICE Measurement matters:  MMC growth may be defined in terms of spending or enrollment.  Comprehensive MMC has different levels of comprehensiveness. Such considerations have significant implications for developing policy analysis and expectations for future growth.

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