MEDICAID MANAGED CARE: Unique California System Host to Problems
Because each county has implemented a unique program, California has one of the most complex Medicaid programs in the nation, according to a report from the Henry J. Kaiser Family Foundation and the Commonwealth Fund. The report is an extension of the ongoing study of managed care for low-income populations in seven states conducted by Mathematica Policy Research Inc. for the Kaiser Family Foundation and the Commonwealth Fund. The major findings of the study include:
- California's Medicaid enrollment has decreased by almost 7% since 1994. Declining AFDC/TANF rolls and immigrants' fears of joining the program have contributed to this decline.
- Using multiple Medicaid managed care models has contributed to an increasing administrative load and created potential for disruption in service and confusion for beneficiaries.
- California has the lowest Medicaid capitation rates in the country, leading plans, providers and other market observers to view the Medi-Cal program as severely underfunded. Others believe that low capitation rates and other demands might push plans and providers to abdicate the Medi-Cal program, destabilizing the entire system.
- Medi-Cal plans and providers often have trouble complying with various reporting requirement. Problems stem from data collection, as well as how the state processes and analyzes the information.
The Two-Plan Model
Los Angeles County's two-plan model is extremely complex and "varies substantially from the two-plan model first envisioned by the state." While the original design called for a local initiative and a commercial plan, Los Angeles County's multiple players and administrative layers have raised questions as to whether the "complexity adds value." Enrolling in the county's initiative is "viewed as complicated and burdensome," because beneficiaries must first complete an eligibility form and make several choices concerning subcontracting health plans and primary care physicians. Managed care beneficiaries who fail to complete the enrollment form or select a plan receive a default assignment, the rate of which has declined from 40% to 20% -- a rate some think is still too high. Access to care providers "has substantially improved under Medi-Cal managed care," but whether beneficiaries have more of a choice "is not as clear." However, many community clinics "have not fared well under managed care ... adding to the fragility of Los Angeles County's safety net."
Operating since 1995, Orange County's major Medi-Cal insurer, CalOPTIMA, faces a challenge "to balance its focus and resources appropriately between its core Medicaid business and new opportunities," according to the report. Findings concerning the CalOPTIMA plans are listed below:
- As CalOPTIMA has reduced the number of subcontractors, the reductions "appear to have led remaining subcontractors to focus on traditional providers." But whether this "ultimately leads to a lesser commitment by mainstream providers initially attracted to the CalOPTIMA model remains to be seen."
- While Supplemental Security Income recipients initially proved "challenging" for CalOPTIMA, the program maintains "it has worked hard to improve access for this population by substantially increasing the number of specialists" within the network.
- CalOPTIMA is "reluctant" to take responsibility for the medically indigent, a population whose "utilization and cost experience is not only unknown, but difficult to project."
The report concludes, "Whether California's approach to Medi-Cal managed care will prove successful in the long run is unclear," but the state's efforts "reflect a particularly ambitious strategy of providing all things to all people. Eventually, California may have to streamline and simplify its approach, and in so doing make some hard choices about what the state is able to provide. California's diversity and scale make it a particularly valuable setting for building understanding of many of the more challenging issues faced as states proceed to develop Medicaid managed care" ("Managed Care and Low-Income Populations: A Case Study of Managed Care in California," December 1999).