First Ever Managed Care Payment Rate for People with Disabilities

Evaluation of the Medicaid working group initiative

The Chronic Illness and Disability Medicaid Working Group (WMG) at Boston University School of Public Health developed and implemented pilot projects in four states designed to help states develop cost-effective managed care models for chronically ill people with disabilities. Evaluators at the Medical College of Virginia evaluated the models.

The MWG developed criteria for selecting states to participate in the pilot and worked with federal officials to comply with their regulations. The pilots addressed the issue of many chronically ill Medicaid recipients with disabilities, who consume a disproportionate share of that program's resources, being enrolled in managed care plans with little attention to their special needs or the cost of their care.

Key Results

  • Changes in the political climate, resignation of key personnel, and difficulty in bringing various parties (health plans, Medicaid agencies, providers, and consumers) to agreement frustrated implementation.
  • Initially three states—Florida, Ohio, and Wisconsin—were chosen to participate; Florida later dropped out and New York and Missouri were added.
  • Ohio launched plans for people with physical disabilities in three cities, although the largest city, Cleveland, later dropped out.
  • Each of the other four plans was a partnership between a health maintenance organization (HMO) and a teaching hospital.
  • The MWG provided technical assistance to the Wisconsin Medicaid program, which started a managed care program for disabled recipients aged 15 to 65.
  • In the other participating states, Missouri and New York, the MWG's efforts did not result in any Medicaid-managed care models for the chronically ill and disabled.
  • In Missouri, the Medicaid Working Group project was coordinated with the Missouri Partnership for Enhanced Delivery of Services (MO-PEDS), which became part of the RWJF national program, Building Health Systems for People with Chronic Illnesses (ID# 035558). MO-PEDS is a rural health system of care for children with disabilities on Medicaid.
  • Overall, despite the limited state-specific accomplishments, the Medicaid Working Group project made a number of contributions to what had been an embryonic body of understanding and knowledge of how these programs should be conceptualized, designed, and operated.
    • The work done on rate setting and risk adjustment, begun in the MWG participating states, raised the understanding of cost patterns, the importance of attending to risk adjustment, and the potential for new, creative payment methods to foster extension of managed care for persons with special needs.
    • The MWG developed the first-ever Disability Payment System (DPS), a health-based reimbursement methodology that compensates health plans based on the costs of providing services to people with various disabilities, a necessary precondition for extending managed care to that population.

 

The MWG disseminated its findings through publications and conferences.

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