MEDI-CAL: ‘Customized’ Managed Care Approach Provides Model for States
While "poorly designed systems" and "unethical practices" plagued Medi-Cal early in its inception, the state resuscitated the program by changing the design and implementation of managed care, according to a recent study in the September/October issue of Health Affairs. The study, "Customizing Medicaid Managed Care -- California Style," includes interviews from Medicaid program "stakeholders," such as health care advocates, HMO officials, providers and trade association representatives, as well as a review of relevant Medi-Cal documents. While California has used a Medicaid managed care system since the 1970s, the state developed and implemented in the early 1990s "locally customized models" to expand Medicaid HMO participation, helping to cut ballooning costs and improve access for patients. According to study authors Debra Draper and Marsha Gold of Mathematica Policy Research, California's "customization" approach offers a model for other states to follow at a time of "current instability [among] Medicaid managed care programs resulting from health plan withdrawals and other changing market dynamics." They also note that California's large, geographically dispersed population; ethnic and economic diversity; varying levels of managed care; and prevalence of "risk-bearing" medical groups and independent practice associations all contribute to its "complex" approach to Medicaid managed care. Within the Medicaid program, the state uses three basic managed care models in each county, known as the two-plan, county-organized health system and geographic managed care models. Synopses of these approaches appear below.
- Two-plan model: Operating in 12 counties, the two-plan model dominates in areas with large "safety net" programs and offers a choice between a "local-initiative" plan and an HMO plan;
- COHS model: The county's board of supervisors develops a health-insuring organization to contract with Medi-Cal on a capitated basis;
- GMC model: The state enters capitated contracts with multiple commercial plans "within a designated geographic area."