State Medicaid Programs Bring Managed Care Tenets to Fee for Service

Rising numbers of enrollees in state Medicaid programs have resulted in the increased use of commercial managed care organizations by the states. Research shows that the implementation of these programs has produced mixed results. While many states have implemented managed care principles and have seen reductions in costs, some basic managed care tenets may not apply to a Medicaid population because of limited financial risk and responsibility. The application of commercial managed care organizations to these populations may not result in additional savings for those states already actively engaged in managed care. As such, the purpose of this article is to provide a synopsis of key managed care principles as applied to state Medicaid programs and discuss issues regarding the optimization of cost, access, and quality for this population.