Health Conditions, Utilization, and Expenditures of Children in Foster Care. Managed Care Participation


Managed care participation rates varied widely across states and by category of Medicaid eligibility within states (Table III.6). About 1 in 10 foster care children in California and Pennsylvania and one in five in Florida were enrolled in Medicaid managed care in 1994. Across all categories of Medicaid eligibility, Florida had the highest level of managed care penetration in 1994 (35 percent), followed by Pennsylvania (30 percent), and California (20 percent). In all three states, the AFDC population was most likely to be enrolled in managed care (27-45 percent) and SSI children had the second-highest participation rates (12-25 percent). The rate was by far the lowest among children receiving adoption assistance.(4)

Table III.6:
Managed Care Participation Rates by Category of Medicaid Eligibility, 1994.
    Category of Medicaid Eligibility
All Children(a) Foster Care Adoption Assistance AFDC SSI
California 19.8 10.6 2.3 27.3 11.6
Florida 34.8 19.4 10.0 44.9 24.7
Pennsylvania 30.3 11.9 1.4 43.1 18.6
Source:  HCFA State Medicaid Research Files.
a.  Includes children in other categories of Medicaid eligibility.

How did managed care participation rates vary within the foster care population? The patterns varied by state, presumably reflecting variations in program rules (Table III.7). In California and Florida, the rate was lowest among infants, whereas in Pennsylvania, the opposite was found (one in five infants in foster care were enrolled in managed care). In Florida, the rate peaked among children between the ages of one and nine, and in California, among children ages five to nine. Adolescents (ages 15 to 18) had the lowest participation rates in all three states. As might be expected, there were no major gender differences.

Table III.7
Managed Care Participation Rates
Within the Foster Care Population, 1994.
Total 10.6% 19.4% 11.9%
Less than 1 1.7 2.0 20.0
1 to 4 11.0 24.6 15.4
5 to 9 14.2 24.4 11.2
10 to 14 11.5 17.5 10.5
15 to 18 7.7 11.2 10.9
Male 10.1 19.2 12.2
Female 11.1 19.6 11.6
White 9.4 16.4 4.2
Black 14.6 22.5 18.5
Hispanic 11.5 20.2 12.9
Other/Unknown 6.7 17.3 7.7
Urban/Rural Location
Large MSA 11.6 22.3 17.1
Small MSA 6.5 17.1 3.2
Rural-MSA 0.6 9.2 0.0
Source:  HCFA State Medicaid Research Files.

In all three states, managed care participation rates were highest among foster care children who were black or Hispanic and lowest among those who were white. In Pennsylvania, for example, 19 percent of black foster care children and 13 percent of Hispanic foster care children were enrolled in managed care, compared to 4 percent of white foster care children. One possible explanation is that a disproportionate share of black and Hispanic foster care children resided in communities with above-average Medicaid managed care penetration.

Managed care participation rates also followed a consistent pattern across geographic areas; the highest rates in all three states were observed in large urban areas and the lowest rates in rural areas. As an example, 22 percent of foster care children in large urban areas in Florida, but only 9 percent in rural areas, were enrolled in managed care. This reflects the focus of state Medicaid managed care programs in large urban areas due to the challenges of developing capitated programs in rural areas.

Subsequent analyses of patterns of diagnoses, utilization, and expenditures are based on claims data and exclude children enrolled in managed care. This is because managed care organizations are paid on a prospective, capitated basis, and thus, do not submit claims data to Medicaid for reimbursement for individual services. Only children enrolled in Medicaid on a fee-for-service basis have complete claims data; therefore, these children are the basis of all remaining analyses in this report.