Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Challenges to Implementing MLTC Programs


Implementing MLTC programs has proven to be more challenging than traditional Medicaid managed primary and acute health care for families and children. Major issues are summarized below.

  • Consumers and advocates worry about underservice and loss of control. Despite efforts to emphasize person-centered concepts in MLTC programs, many consumers and their advocates worry that contractors will be financially motivated to reduce access to services, limit consumer choice, and provide service plans that are less tailored to members’ individualized needs. To address these and related concerns, states must engage consumers early on and throughout program development, implementation, and evaluation, recognizing that a meaningful engagement process with consumers requires a substantial commitment of time and resources.

  • Entities involved in delivering HCBS resist role changes. In particular, organizations to whom the state has delegated case management of waiver services, such as counties, Area Agencies on Aging, and Independent Living Centers, generally do not want to cede that responsibility to MCOs. States must work with these entities to help them redefine their roles, and in some programs, to forge formal partnerships with MCOs.

  • Infrastructure is lacking at the state and service delivery levels. Commercial MCOs generally lack experience providing long-term care services, while state Medicaid agencies and traditional HCBS providers lack experience managing risk. Additionally, because state legislatures often equate managed care with privatization, they may expect to reduce state administrative positions when MLTC is implemented. A major education effort may be needed for the state legislature to understand that implementing a managed care program does not result in a need for fewer state agency staff.

  • Rate setting is complex.Considerable variation in the needs of the population served presents a major challenge to the rate setting process. One person may need only a few hours of personal assistance per day, while another might need several months of nursing facility care; also, an individual’s needs can vary over time. Determining a capitation rate to pay appropriately for this potential range of services, while also building appropriate incentives to provide HCBS instead of institutional services, is a complex task.

  • High incidence of dually eligible persons. One of the greatest challenges is the high incidence of dually eligible persons among the population in need of long-term care. While a state may conclude that a Medicaid-only program will have too few participants--particularly in small states--and so is not worth the effort, on the other hand, finding a contractor that can provide the entire range of Medicaid and Medicare services may not be feasible or may require too much effort.

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