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Developing Integrated Managed Care Systems for Children with Disabilities: The State of the Art

Publication Date

U.S. Department of Health and Human Services

Developing Integrated Managed Care Systems for Children with Disabilities: The State of the Art

Executive Summary

Sara S. Bachman, Mimi Bernardin and Brian Burwell


December 1996

This report was prepared under contract between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the MEDSTAT Group. For additional information about the study, you may visit the DALTCP home page at or contact the ASPE Project Officer, Ruth Katz, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is:

In the last few years, state Medicaid programs have heartily embraced the principles of managed care as a strategy for increasing the value of their health care purchasing decisions. Although, states concentrated their first managed care enrollment initiatives on AFDC-related eligibility groups, more recently they have turned their attentions to enrolling SSI-related groups in managed care plans. Managed care for persons who are aged or have disabilities and receive SSI benefits is commonly perceived to pose a greater management challenge to states because: (1) the risks of managed care are considered to be greater for individuals with higher and more specialized health care needs; (2) most managed care plans have little or no experience in meeting the health and supportive service needs of SSI recipients; and (3) a significant percentage of SSI recipients are also eligible for Medicare, which complicates state initiatives to enroll SSI recipients in managed care plans for their Medicaid-covered benefits.

Children with disabilities are a population of significant policy interest in recent managed care initiatives by states. For one, very few children receiving SSI are dually eligible for both Medicare and Medicaid, so issues regarding dual enrollment are less of a concern for children receiving SSI. Moreover, managed care models may be particularly relevant for children with severe disabilities, who often receive fragmented care from a variety of service systems and provider types under the Medicaid fee-for-service model and from other state programs. With better care planning and management under integrated managed care models, continuity of care might increase, service utilization patterns may become more rational and efficient, and health outcomes may improve.

At the same time, states, and parents of children with disabilities, are aware of the risks associated with enrolling SSI-eligible children in managed care plans. The utility of managed care models in achieving greater efficiency and better health outcomes for persons with disabilities may not match their promise, given the financial incentives to reduce service utilization in their covered populations. These concerns are particularly pronounced for children with complex health and social support needs.

In response to the need for more information about the enrollment of children with disabilities in managed care, the Office of the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services sponsored this study. The purpose of the project was to support the Department's managed care policy initiatives by documenting characteristics of managed care systems that enroll children with disabilities.

The original objective of the project was to study managed care models created by states or by plans themselves that integrate acute and long-term care services for children with disabilities. However, when we began our research, we found that Arizona had the only operating managed care program that provided both acute and long-term care services to children with disabilities in an integrated plan. Since that time, the District of Columbia has implemented such an initiative for children with disabilities, and the Robert Wood Johnson Foundation has supported planning efforts for managed care systems targeted to children with disabilities in Michigan, South Carolina and Massachusetts. Because there was little operational experience with the type of integrated programs we originally targeted, we changed the focus of the study somewhat to examine the progress states and plans have made in developing managed care options for children with disabilities.

The specific objective of our research were to:

  • document the state of the art in developing managed care systems for children with disabilities;
  • learn where states and plans are in the process of meeting the needs of children with disabilities through managed care;
  • identify lessons/best practices from state experiences in using managed care plans to serve children with disabilities; and
  • identify managed care models that integrate acute and long-term care services for children with disabilities.

We begin our discussion by briefly describing the methods we used to conduct our research, identifying major characteristics of the population of interest in our analysis, and discussing the public programs that provide services to children with disabilities. We then discuss the broad range of issues that remain unknown or untested as states attempt to use managed care plans to serve children with disabilities. We describe barriers to moving ahead with the adaptation of managed care plans for children with disabilities, and describe the pockets of innovation we discovered in our research. We conclude by enumerating lessons from the experiences of several states and managed care plans in serving children with disabilities.

People with Disabilities | Children