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Congressional Budget Office AcademyHealth’s Annual Research Meeting Seattle, Washington June 25, 2018 Alice Burns, Ben Lay...
1 CBO Medicaid is a federal-state program that provides health benefits to 70 million low-income individuals. In fiscal ye...
2 CBO States typically use two payment systems to provide Medicaid benefits:  Fee-for-service (FFS), and  Managed care.
3 CBO Why would states adopt managed care?  To make spending for Medicaid more predictable, or  To improve the coordinat...
4 CBO Managed Care’s Enrollment Rate and Share of Medicaid Spending Percent
5 CBO Changes in the Share of Medicaid Spending Attributable to Managed Care, 1999 to 2014
6 CBO CBO examined these questions:  To what extent does managed care deliver Medicaid services?  How and why has manage...
7 CBO A major challenge to understanding the growth of managed care is the variation in states’ programs and the lack of s...
8 CBO What Types of Managed Care Plans Are Beneficiaries Enrolled in?
9 CBO CBO used Medicaid Analytic eXtract data on beneficiaries’ spending and enrollment from 1999 to 2012 (the most recent...
10 CBO Comprehensive MCOs:  General comprehensive  Long-term services and supports  The Program of All-inclusive Care f...
11 CBO Medicaid Beneficiaries, by Type of Enrollment, 2012 Millions of Beneficiaries
12 CBO Rates of Enrollment in Managed Care and Fee-for-Service Medicaid, by Eligibility Group, 2012 Percent
13 CBO Why is Spending on Managed Care Less Than Spending on FFS?
14 CBO a. Comprises Medicaid spending and rebates that do not correspond to any particular beneficiary, such as supplement...
15 CBO Average Monthly Spending on Managed Care and Fee-for-Service Medicaid, by Enrollment, 2012 Dollars
16 CBO Managed Care’s Enrollment Rate and Share of Medicaid Spending Percent
17 CBO Managed Care’s Enrollment Rate and Share of Medicaid Spending (Continued) Percent
18 CBO FFS Spending for Comprehensive Managed Care Enrollees Who Were Nonelderly and Nondisabled, 2012 Millions of Dollars...
19 CBO Figure shows spending for elderly and disabled beneficiaries and beneficiaries also enrolled in Medicare who were e...
20 CBO How Has States’ Use of Medicaid Managed Care Changed Over Time?
21 CBO a. The Centers for Medicare & Medicaid Services did not collect data on PACE programs as part of its tracking of ma...
22 CBO Number of States With General Comprehensive Managed Care Programs, by Coverage Area
23 CBO Number of States With Mandatory Enrollment in General Comprehensive Managed Care Programs, by Eligibility Group
24 CBO Number of States With General Comprehensive Managed Care Programs, by Services Covered
25 CBO Key Takeaways
26 CBO Plan design matters. Both enrollment in and spending on Medicaid managed care grew rapidly from 1999 to 2014, even ...
27 CBO Data matters. By making it possible to compare states’ managed care programs and changes in those programs over tim...
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Government & Nonprofit
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Jun. 25, 2018

Exploring the Growth of Medicaid Managed Care

States may provide Medicaid benefits either by directly reimbursing providers or by paying private health insurance plans or provider groups (called managed care organizations, or MCOs) to provide services to enrollees. This presentation examines the extent to which Medicaid benefits are delivered through MCOs and the reasons for recent growth in enrollment in and spending for managed care. CBO found that although the overwhelming majority of Medicaid beneficiaries are enrolled in MCOs, payments to MCOs account for less than half of all Medicaid spending. As for the increase in the use of managed care programs to provide Medicaid benefits, the agency found that it is largely attributable to MCOs’ expanding the types of beneficiaries, geographic areas, and range of services that they cover.

Presentation by Alice Burns, an analyst in CBO’s Budget Analysis Division, and by Ben Layton and Lyle Nelson, both of CBO’s Health, Retirement, and Long-Term Analysis Division, at AcademyHealth’s Annual Research Meeting.

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Exploring the Growth of Medicaid Managed Care

  1. 1. Congressional Budget Office AcademyHealth’s Annual Research Meeting Seattle, Washington June 25, 2018 Alice Burns, Ben Layton, and Lyle Nelson Budget Analysis Division and Health, Retirement, and Long-Term Analysis Division Exploring the Growth of Medicaid Managed Care
  2. 2. 1 CBO Medicaid is a federal-state program that provides health benefits to 70 million low-income individuals. In fiscal year 2015, it accounted for $348 billion in federal spending and $205 billion in state spending.
  3. 3. 2 CBO States typically use two payment systems to provide Medicaid benefits:  Fee-for-service (FFS), and  Managed care.
  4. 4. 3 CBO Why would states adopt managed care?  To make spending for Medicaid more predictable, or  To improve the coordination of care, which may reduce costs or improve outcomes.
  5. 5. 4 CBO Managed Care’s Enrollment Rate and Share of Medicaid Spending Percent
  6. 6. 5 CBO Changes in the Share of Medicaid Spending Attributable to Managed Care, 1999 to 2014
  7. 7. 6 CBO CBO examined these questions:  To what extent does managed care deliver Medicaid services?  How and why has managed care grown in recent years?
  8. 8. 7 CBO A major challenge to understanding the growth of managed care is the variation in states’ programs and the lack of systematic data. CBO constructed, and will soon publish, a new dataset to make comparing states’ Medicaid managed care programs easier.
  9. 9. 8 CBO What Types of Managed Care Plans Are Beneficiaries Enrolled in?
  10. 10. 9 CBO CBO used Medicaid Analytic eXtract data on beneficiaries’ spending and enrollment from 1999 to 2012 (the most recent year for which data were available). Only data for beneficiaries who were eligible for full Medicaid benefits were analyzed.
  11. 11. 10 CBO Comprehensive MCOs:  General comprehensive  Long-term services and supports  The Program of All-inclusive Care for the Elderly (PACE) Noncomprehensive MCOs:  Behavioral  Dental  Case management  “Other” Types of Managed Care Organizations (MCOs)
  12. 12. 11 CBO Medicaid Beneficiaries, by Type of Enrollment, 2012 Millions of Beneficiaries
  13. 13. 12 CBO Rates of Enrollment in Managed Care and Fee-for-Service Medicaid, by Eligibility Group, 2012 Percent
  14. 14. 13 CBO Why is Spending on Managed Care Less Than Spending on FFS?
  15. 15. 14 CBO a. Comprises Medicaid spending and rebates that do not correspond to any particular beneficiary, such as supplemental payments to providers and prescription drug rebates; those amounts are not included in the data on Medicaid beneficiaries. Total Medicaid Spending, by Category, 2014 Billions of Dollars
  16. 16. 15 CBO Average Monthly Spending on Managed Care and Fee-for-Service Medicaid, by Enrollment, 2012 Dollars
  17. 17. 16 CBO Managed Care’s Enrollment Rate and Share of Medicaid Spending Percent
  18. 18. 17 CBO Managed Care’s Enrollment Rate and Share of Medicaid Spending (Continued) Percent
  19. 19. 18 CBO FFS Spending for Comprehensive Managed Care Enrollees Who Were Nonelderly and Nondisabled, 2012 Millions of Dollars Figure shows spending for nonelderly, nondisabled adults and children who were enrolled in comprehensive managed care for their entire period of eligibility.
  20. 20. 19 CBO Figure shows spending for elderly and disabled beneficiaries and beneficiaries also enrolled in Medicare who were enrolled in comprehensive managed care for their entire period of eligibility. FFS Spending for Comprehensive Managed Care Enrollees Who Were Elderly, Disabled, or Also Enrolled in Medicare, 2012 Millions of Dollars
  21. 21. 20 CBO How Has States’ Use of Medicaid Managed Care Changed Over Time?
  22. 22. 21 CBO a. The Centers for Medicare & Medicaid Services did not collect data on PACE programs as part of its tracking of managed care programs in 1999, but the agency has done so since at least 2005. Number of States With Managed Care Programs, by Type of Program
  23. 23. 22 CBO Number of States With General Comprehensive Managed Care Programs, by Coverage Area
  24. 24. 23 CBO Number of States With Mandatory Enrollment in General Comprehensive Managed Care Programs, by Eligibility Group
  25. 25. 24 CBO Number of States With General Comprehensive Managed Care Programs, by Services Covered
  26. 26. 25 CBO Key Takeaways
  27. 27. 26 CBO Plan design matters. Both enrollment in and spending on Medicaid managed care grew rapidly from 1999 to 2014, even though the number of states with general comprehensive managed care programs declined over that period. That discrepancy reflects the increasing scope of states’ contracts with MCOs.
  28. 28. 27 CBO Data matters. By making it possible to compare states’ managed care programs and changes in those programs over time, CBO’s dataset provides a more nuanced perspective on the growth of managed care. Such data will improve future research and inform expectations about the future of Medicaid managed care.

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