These figures are not much different from the findings of a 1992 Health Care Financing Administration (HCFA) study, when Medicaid was still predominantly a fee-for-service system. HCFA found that only about 36 percent of the eligible children were reportedly receiving the EPSDT program screens, although the actual numbers may have been higher because providers may not have been accurately coding encounters as EPSDT program screens (Koppelman, 1993).

In addition to covering the costs of EPSDT program services, states are required to provide outreach and education services to inform families of Medicaid-eligible children about services and to assist them in obtaining those services (NIHCM, 1996). These services are typically not provided by health care plans, and as more states move toward managed care, some groups are concerned that children may not get the comprehensive services included in the EPSDT program.

Medicaid Managed Care

The number of Medicaid beneficiaries enrolled in managed care plans increased fourfold between 1991 and 1996 (see Figure 5.6 and Table 5.1). Much of the increase was due to the granting of Medicaid waivers. The 1115 and the 1915 (b) and (c) waivers allowed states to limit Medicaid recipients to particular provider groups, thereby making it possible for them to contract with managed care plans.

As of September 1997, every state except Alaska and New Hampshire had acquired a waiver to begin managed care programs for Medicaid beneficiaries (Epstein, 1997; Zuckerman et al., 1997). More than one third of the nation's Medicaid beneficiaries were enrolled in some form of managed care program as of June 1996. The vast majority of these enrollees were children and single parents, who are generally more easily enrolled in health plans than aged, blind, or disabled Medicaid beneficiaries.

This national shift to managed care has had a tremendous impact on the nature of the program and has significantly changed the role of state Medicaid agencies. A turning point was reached in the early 1990s as states increasingly began to move their Medicaid programs into managed care in search of cost savings, but also to increase access to preventive services. Under a fee-for-service system, the traditional role of state Medicaid agencies was to provide oversight of financial performance and monitoring of providers for overutilization. In the market-driven systems of managed care, the Medicaid agencies' roles have been transformed. Billions of public dollars are being paid prospectively to managed care plans, raising issues of accountability and public trust.

As large-scale buyers of private managed health care coverage, Medicaid agencies are now challenged to use the bargaining skills of other large purchasers in order to negotiate reasonable rates while protecting enrollees. States must be able to develop specific contract language, define the scope of services within existing resources, and establish performance measures for health plans that assure access and quality of care (Landon et al., 1998; Rosenbaum et al., 1997).

There is really a shift from thinking of Medicaid as a welfare program, to thinking of it as a purchaser and a payer of services. The further along that road we get, the better we are going to do for our kids.

Shelly Gehshan

National Conference of State Legislatures, Washington, D.C.

Public Workshop, June 2, 1997

Under fee-for-service arrangements, Medicaid was a financing stream and a mechanism for reimbursing providers for services. Under Medicaid managed care, state Medicaid administrators are purchasing comprehensive, integrated delivery systems for the first time. This shift to managed care gives them



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