Arizona Medicaid Plan Could Be National Model

Arizona Gov. Janet Napolitano (D) on Thursday testified to the Senate Special Committee on Aging that the state Medicaid reform plan could serve as a national model, CQ HealthBeat reports. Napolitano said that the plan could help other states reduce the cost of their Medicaid programs and improve the quality of care for beneficiaries.

According to the Lewin Group, the plan could save the Arizona Medicaid program $83 billion over the next 10 years through capitated contracting, in which managed care companies receive a set amount of funds per beneficiary to provide coverage, Napolitano said. Under the plan, managed care companies compete for Medicaid beneficiaries and provider networks, she said.

Napolitano added, "The need for a critical mass of enrollment and quality provider networks, while remaining profitable, forms a three-way tension that drives the necessary balance for high quality and cost-effectiveness."

However, Donald Marron, acting director of the Congressional Budget Office, said, "What works for one state may not work for others" because each state differs in age, income and population demographics (Estes, CQ HealthBeat, 7/13).