Overcoordinated: Tailored Health Plans in the Era of Medicaid Managed Care

• In Event: State and Local Evidence for Policy Change and Vulnerable Populations

Abstract

Nationally, more and more states have turned to large Managed Care Organizations (MCOs) to manage their Medicaid populations. As this transition occurs, there are important opportunities for researchers to investigate how resources are allocated to the most vulnerable patients. Managed Care Organizations often frame their value in terms of their capacity to do complex coordination in a cost-efficient manner. However, more analysis is needed of the strategies by which this coordination is actually accomplished, and the extent to which the services offered by MCOs intersect with the work already being done by other agencies and providers to coordinate the care of vulnerable populations.

Over the last 5 years, the state of Illinois has ramped up its transition to Medicaid managed care, rolling 80% of Medicaid beneficiaries into managed care plans in 2017. The process has been fraught with controversy, largely because of a concurrent 2 year state budget impasse, which led to extreme reimbursement lags, in addition to a 2018 audit of the Illinois Department of Healthcare and Family Services that revealed over $7 billion in unaccounted spending by insurance companies on Medicaid recipients, calling into question the state’s ability to oversee contract compliance.

The most recent drama in state politics around Medicaid managed care has been the creation of a health plan specifically for foster youth in the state. The contract for these 35,000 youth was awarded to the state subsidiary of insurance giant Centene, which has already created similar plans in 6 other states. Centene promises tailored care for this population, whose specific needs—particularly around behavioral health—have been poorly met through traditional Medicaid plans.

In this paper, I draw on 12 months of field work observing the transition of foster care youth in the state of Illinois to a single Medicaid managed care plan. I describe a number of coordination challenges, which indicate the need for more research into the implementation of specialized managed care plans.

First, I argue that tailored plans actually assume a significant degree of homogeneity between vulnerable populations in radically different contexts. I argue that claims about the health profiles of these patients disguise the extent to which geographic and bureaucratic contexts shape vulnerability.

Second, I consider how MCOs strategically alternate between the fee-for-service rationales of traditional Medicaid and value-based care rationales. The movement between these two rationales provides these organizations significant latitude in designating which services are medically necessary.

Third, I consider the administrative and staffing burden introduced by additional care coordination. In the case of foster care youth, the introduction of this coordination poses significant challenges to the state agencies and contracted providers already engaged in coordinating services for these patients. The MCOs must, for instance, staff this large health plan from the network of individuals who have experience caring for foster youth. As a result, the plan has been forced to poach employees from organizations already serving foster youth in the state, compromising their relationship with provider organizations.

Viewed together, these coordination challenges provide insights about how administrative factors may contribute to vulnerability in health care; they also indicate the need for more research into the implementation of tailored health plans for vulnerable patient populations.

Author

• Sorcha A Brophy, Columbia University