A study of 15 states with the greatest number of Medicaid managed care members found annual MCO withdrawal rates of 18 percent in 1997 and 15 percent in 1998, compared with 7 to 8 percent each year from 1994 to 1996.20 In 1998, on average, one commercial MCO entered the Medicaid market for every six MCOs that exited; in 1997, the ratio was closer to one entering for every two exiting.21 With fewer MCOs in the market, PCCM programs have become a long-term managed care alternative, even for states that originally intended to move all their Medicaid populations to risk-based MCO programs.
Several of the eight case-study states mentioned concerns about the MCO marketplace as a factor in their considerations about the role of PCCM in their Medicaid managed care programs. For example, the MaineNET/Partnership program's original approach called for contracting with an MCO, but the absence of potential bidders in the state called for the revised, PCCM approach. Iowa officials reported that they expect PCCM to take a larger role in the near future, due to the withdrawal of one MCO from Medicaid and the concerns that another may withdraw. Oklahoma officials noted that their original vision of eventually enrolling Medicaid beneficiaries throughout the state in MCOs was not realistic, especially in rural areas.