HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that significant state Medicaid reform efforts in Louisiana and Rhode Island will likely face challenges in light of the nation's economic downturn, particularly as Medicaid populations grow.
According to the recent Georgia, Alabama & Louisiana Health Plan Analysis, state officials believe that a re-structured Medicaid program, giving beneficiaries a choice of plans, will provide residents better health outcomes for less money than the present fee-for-service, one-size-fits-all program. Louisiana would contract with at-risk managed care plans and primary care networks. The plan is currently under review by the Centers for Medicare & Medicaid Services (CMS) and includes pilot programs in four regions with an expanded experiment in the state's Lake Charles region. Reform is much needed in the state as it currently ranks last or nearly last in national health rankings.
"With dismal health outcomes and rising Medicaid costs, managed Medicaid is past due in Louisiana, though plans will likely face hurdles in the coming year because of the economic climate and growing demand," said Jan Shuxteau, analyst with HealthLeaders-InterStudy. "However, once approved, the prospect of hundreds of thousands of covered lives will attract significant interest from managed care organizations, particularly those that already have experience in the state-sponsored insurance sector."
According to the Winter 2009 New England Health Plan Analysis, Rhode Island has received CMS approval to operate its Medicaid program under what is known as a "global cap." Under this five-year deal, the state receives a set amount of funding from the federal government, but is responsible for costs that go over that amount. In return, Rhode Island Medicaid would have flexibility to design benefits and manage the Medicaid program outside the usual rules.
"Gov. Carcieri is driving Rhode Island's Medicaid reform efforts, but there are many who feel the cap approach carries too much risk for the state, especially with the state's high unemployment rate," said Ric Gross, analyst with HealthLeaders-InterStudy. "However, the governor contends the expansion of at-home and community-based services for the elderly enabled under the plan's flexibility will help them avoid more costly, longer term costs, such as nursing home care."
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