A conflict of strategies: Medicaid managed care and Medicaid maximization

To examine the influence of state strategies aimed at increasing federal Medicaid matching dollars on the design of states' Medicaid managed care programs. Data obtained from the 1996-1997 case studies of 13 states to examine how states have adapted the design of their Medicaid managed care programs in part because of maximization strategies, to accommodate the many roles and responsibilities that Medicaid has assumed over the years. Our study showed that as states made the shift to managed care, some found that the responsibilities undertaken in part through maximization strategies proved to be in conflict with their Medicaid managed care initiatives. Among other things, the study revealed that most states included provisions that preserved the health care safety net, such as adapting the managed care benefit package and promoting the participation of safety net providers in managed care programs. In addition, most of the study states continued to pay special subsidies to safety net providers, including hospitals and clinics. States have made real progress in moving a large number of Medicaid beneficiaries into managed care. At the same time, many states have specially crafted their managed care programs to accommodate safety net providers and existing funding mechanisms. By making these adaptations states, in the long run, may compromise the central goals of managed care: controlling costs and improving Medicaid beneficiaries' access to and quality of care.