Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 6.2. How Medicaid Managed Care Is Evolving and What It Means for PSH


Medicaid managed care began in many states with a focus on enrolling children and families. However, a growing number of states now allow people with disabilities to enroll in managed care plans, and some states require that most seniors and people with disabilities do so. Frequently people who are "dualeligibles," enrolled in both Medicaid and Medicare, are not required or permitted to enroll in Medicaid managed care, although some states, including California, are moving in the direction of enrolling this group into managed care arrangements. States also may exclude or exempt some groups of particularly vulnerable people with disabilities or very costly or life-threatening illnesses from the requirement to enroll in Medicaid managed care.
Many states are using managed care plans to provide coverage to people who became newly eligible for Medicaid in 2014 under the terms of the Affordable Care Act.
Some states have separate managed care arrangements for medical care and behavioral health care, administered by different MCOs, and delivered by different provider networks using separate payment systems. Managed care plans may be required to coordinate care with other Medicaid services that are financed or delivered separately, particularly care for seniors and people with disabilities. Either the health plans or the other providers may be responsible for long-term services and supports, including nursing home services and home and community-based services, as well as mental health benefits and other behavioral health services.
States often implement Medicaid managed care under a waiver of some Medicaid rules, including a waiver of "freedom of choice" requirements. These waiver provisions allow MCOs to contract with a limited set of providers and to establish rules and procedures that govern where members may receive services that will be reimbursed by the plan.
Medicaid managed care arrangements are evolving rapidly in most states and are increasingly important in nearly all of the states and communities included in this case study. Since 2011, more than 200,000 seniors and people with disabilities have been enrolled in Medicaid managed care plans in California, and tens of thousands have been enrolled in managed care plans in Minnesota and parts of Illinois. In each case, the shift from fee-for-service to managed care payment arrangements has been implemented in phases for different parts of the state, different beneficiary groups, and various managed care arrangements.
  • In 2010, California made enrollment into managed care plans mandatory for most seniors and persons with disabilities enrolled in Medicaid in Los Angeles and most other urban counties. The health plans are responsible for managing medical services, while most mental health services and substance use treatment services remain under separate county-administered systems.
  • Minnesota state legislation enacted in 2011 requires that people with disabilities be assigned to a Special Needs Basic Care health plan unless individuals opt out of enrollment. These plans are responsible for covering both health and behavioral health services.
  • Illinois is taking several approaches to move at least half of all Medicaid beneficiaries into care coordination arrangements, as required by a 2010 state law. The process started with beneficiaries who are seniors or persons with disabilities, for whom managed care entities must provide a benefit package that includes medical and behavioral health services. The first phase began with managed care plans in the "collar counties" that surround the city of Chicago.
  • Louisiana has established a statewide behavioral health system of care administered by an MCO responsible for delivering and financing behavioral health care services. Medicaid beneficiaries qualifying for behavioral health services began getting their care through this MCO in phases beginning in March 2012.
  • The State of Connecticut has taken a different approach to managing care, creating a self-insured administrative services organization (ASO) for Medicaid-covered health services and a separate ASO for behavioral health services. Both were in the early implementation stages at the end of the study period.

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