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The Managed Care Already Argument

2 min read

One argument against managed care organizations is that the state of Arkansas has already implemented many of the cost-saving methods in its Medicaid programs that managed care organizations use.

The issue can be confusing because health care professionals refer to these methods as “managed care,” but they don’t involve MCOs.

The methods include:

  • Utilization review, which is a process for determining whether a patient should get the care they or their doctors have requested.
  • Prior authorization, which requires a doctor to obtain approval from his or her patient’s health insurance plan before prescribing a therapy to the patient.
  • Provider networks, which are specific doctors and providers that an insurance plan has contracted with to provide medical care to its patients.

Dr. Dan Rahn, chancellor of the University of Arkansas for Medical Sciences, pointed out that the managed care practices the state uses now also include “bundled payments.” These pay health care providers for treating an episode of illness — for example, a heart attack — rather than paying them for each service provided, or a fee for service. Bundled payments reward providers for working as a team to provide quality care rather than a quantity of care.

Rahn also cited the Patient-Centered Medical Home Program, which primary care providers are also eligible to participate in. He said the program is yet another form of managed care employed by the state. This program offers incentives to providers for working together to prevent costly complications, paying them for patient results and outcomes rather than for services provided.

Jodiane Tritt of the Arkansas Hospital Association said that, since July 2011, more than three-fourths of the traditional Medicaid beneficiaries in Arkansas have been enrolled in at least one “managed care” program. These include:

♦ ConnectCare, established in 1994 as a primary care case management program that provides beneficiaries with health education and coordinated services. ConnectCare pays providers a monthly per-member case management fee in addition to a regular Medicaid fee-for-service reimbursement for medical services, she said.

♦ The Program for All-Inclusive Care for the Elderly, or PACE, which pays providers a per-member, per-month fee to provide all Medicare and Medicaid services to individuals over age 55 who require a nursing-home level of care.

♦ The Health Care Payment Improvement Initiative, in which Medicaid and private insurers use reports compiled from information that providers submit that show overall quality of care and the average cost to provide it. Medicaid and private insurers then use those reports to track spending and reward the most efficient providers. Providers and payers then share the savings that result from high quality care provided at a lower-than-average cost.

(Related: Managed Care Organizations Met With Skepticism by Some Health Care Professionals)

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