What Is Medicaid Managed Care?

Medicaid managed care is a federal program that provides Medicaid benefits through managed care organizations. The managed care organizations provide services to eligible Medicaid recipients while the government foots the bill. Medicaid managed care can be divided into two models - risk-based and primary care case management (PCCM). Medicaid managed care was designed to help Medicaid recipients get access to quality medical services and reduce health care costs.

Understanding Medicaid Managed Care

The Medicaid managed care is a cooperative program administered on both state and federal level. As the result, many of it's details differ on state-by-state basis. However, the program has certain common features throughout the entire country.

Medicaid managed care program is available to all Medicaid recipients. In some states, they can choose whether they want to sign up for Medicaid managed care. In other states, they are obligated to sign up for it, though many of those states also exempt certain types of Medicaid recipients from that obligation. In either case, Medicaid recipients get to choose certain aspects of their health care. In most states, Medicaid recipients are required to pay part of their health care costs. The Medicaid payments cover the rest. Usually, the former is smaller than the later, sometimes significantly so.

Medicaid managed care can take on two forms - risk-based Management Care Organizations (MCOs) and fee-for-service based Primary Care Case Management (PCCM). The two forms differ based on how the Medicaid recipients get their care and how the Medicaid payments are made.

Risk-Based Management Care Organizations

Under this form of Under this form of Medicaid managed care, the health care services are provided through Management Care Organizations. Each MCO is a group of doctors, clinics, hospitals, pharmacies and other health care providers. In most cases, the health care providers don't serve Medicare recipients exclusively. Each Medicaid recipient chooses an MCO based on location and the services it offers. The Medicaid recipients can't use health care facilities outside their MCOs for anything other than medical emergencies. In most cases, Medicaid recipients can't change their MCOs unless they move somewhere else.

Once the Medicaid recipient selects an MCO, he or she would have to choose a primary care provider. The primary care provider is the first doctor the Medicaid recipient would see for any sort of health problem. If the primary care provider doesn't have the means or the knowledge to address that problem, he or she will refer the Medicaid recipient to another health care provider within the MCO. The primary care provider also has the right to refer the Medicare recipient to a doctor outside the MCO should he or she deem it necessary.

With MCOs, Medicaid payments are made in the form of monthly fees. Each monthly fee covers a Medicaid recipient that signed up for that MCO. The fee remains fixed for the entire year. The MCO assumes either partial risk or full risk. If the Medicaid recipient has to get care outside the MCO, he or she will not be covered by the fee. He or she may still be able to get Medicaid to cover the costs, but that depends on whether or not the medical facility in question accepts Medicaid payments. 

Fee-for-service Primary Care Case Management

This form of Medicaid managed care essentially takes the concept of the primary care provider and amps it up. The primary care provider  approves and monitors all aspects of medical services the Medicaid recipient receives. As with MCOs, the primary care provider can refer his or her patient to other doctors, but in this case, the doctor isn't limited by an MCO. The primary care provider is paid monthly case management fees for every patient he or she sees. The provider assumes no financial risk.

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