S.C. Mandating Managed Care For Medicaid Patients

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Published: Tuesday, 11 Jan 2011 | 5:24 PM ET

COLUMBIA, S.C. – Most Medicaid patients in South Carolina will be required to choose a managed care plan starting this spring, a state agency announced Tuesday.

With few exceptions, the state Department of Health and Human Services is getting rid of the traditional fee-for-service model when it comes to Medicaid, the government health care program for the poor. Those who don’t have to choose include disabled and foster care children.

The mandate, which received federal approval last month, expands on what has been voluntary since 2005. The agency says the program, formalized in 2007, has saved the state more than $21 million. Critics say it should remain voluntary, at least until more companies come on board to increase competition.

About 80,000 Medicaid patients, along with new enrollees, will be required to choose a coordinated care plan. Five currently exist. All involve patients working with their primary care doctor.

The long-term goals of the coordinated care approach are saving taxpayers money and improving patients’ health, said agency spokesman Jeff Stensland.

Under the fee-for-service model, patients could “bounce around to any doctor,” he said.

The required coordination hopefully cuts back on patients using the emergency room for basic care, or waiting until a health problem becomes an emergency to seek care, as well as reducing mistakes or fraud caused by patients hopping between doctors, he said.

Still, the agency — which projects a $228 million shortfall this fiscal year alone — doesn’t expect short-term cost savings, partly because the mandate will be phased in over the next year, starting in April, with the anniversary of each Medicaid recipient’s initial enrollment.

The hope is to avoid future costs, Stensland said.

“It’s about establishing a relationship with a doctor you can trust,” he said, adding that doctor can educate them, for example, on the importance of taking prenatal vitamins or staying on top of their diabetes.

Under the four “managed care organization” options, patients are limited to providers within their networks. Under the other, called a “medical home network,” patients can be referred to any physician. The state recommends adding two more such case management systems to increase patients’ choices.

More than 524,000 Medicaid patients statewide already participate voluntarily in one of the five plans currently available, according to the agency.

Mandating Medicaid patients to choose a managed plan has been around for more than a decade. Most states already do so, said Rick Fenton, acting director of the division of health services at the American Public Human Services Association.

The system is generally believed to save money, he said.

But advocates for the poor argue the cost savings are unproven.

Sue Berkowitz of Appleseed Legal Justice Center said she fears it could end up costing more, at a time when the agency faces deepening budget cuts.

Berkowitz said the agency is not doing enough to help patients choose which option is best for them, so people don’t understand what they’re choosing. She said having more “medical home network” options could make the other managed care systems more competitive.

The agency plans to stop paying for Medicaid patients March 1 if it isn’t allowed to run a deficit and says it needs an extra $659 million just to run curtailed programs in the fiscal year starting July 1. Legislators are considering reducing provider rates, which some fear could cause doctors to stop accepting Medicaid patients.

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