preting new research findings (Gerbert et al., 2001). To address the problem of access to experienced providers, the Health Care Financing Administration (which is now the Centers for Medicare & Medicaid Services, or CMS) issued guidance to state Medicaid directors to work to “ensure access to experienced HIV providers in both the fee-for-service program and managed care” (CMS, 1999).

Another concern associated with capitation rates centers on the extent to which rates meet the cost of providing care for HIV disease (Conviser et al., 2000; Kates, 2004). To address this problem, some states have begun to apply risk adjustment strategies in determining capitation rates for patients with HIV disease (Lubinski et al., 2002; Kaye and Cardona, 2002). An evaluation of Maryland’s Medicaid HealthChoice Program, which pays managed-care organizations risk-adjusted capitation rates to ensure that plans are adequately compensated while serving a wide range of beneficiaries, provides some lessons from Maryland’s experience. Evaluation findings indicate that the HealthChoice program greatly expanded eligibility and services to a larger and more diverse population than previously was served. Financial performance levels of the HealthChoice plans were consistent with commercial HMO performance. However, the evaluation left unclear whether differential enrollment based on patient risk would be sufficient to justify the resources needed to make such adjustments (Chang et al., 2003).

State Medicaid programs are also experimenting with other strategies to mitigate inadequate provider reimbursement, including health-based payment systems that set capitation rates based on health status and “carveout” programs that exclude some expenses from the capitation rate (Conviser et al., 1998, 2000). In New York’s Medicaid program, for example, those physicians who meet the state-set criteria as HIV specialists receive an enhanced Medicaid reimbursement rate that comes closer to covering the actual cost of care (New York State Department of Health, 2003).

Perhaps the most troubling aspect of the Medicaid program is the tremendous variation in state Medicaid programs, which in turn results in different levels of services for individuals with HIV disease (Table 4-1). States vary in income eligibility thresholds and in the existence of medically needy programs, home and community-based services (HCBS) waiver programs,7 Section 1115 waiver programs, and Ticket to Work Programs that can help to expand access to services. States also vary tremendously in


Home and Community-Based Services Waivers (Section 1915(c)) allow states to bypass certain federal requirements that limit the development of Medicaid-financed, community-based treatment alternatives (Westmoreland, 1999).

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