Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Chapter 8. Medicaid Authorities for Delivering Home and Community Services Through Risk-based Managed CARE Systems


Managed care is an approach to financing and delivering health care that aims to enhance value by controlling costs while improving quality. Risk-based managed care is defined as a financing and delivery system in which a contractor is paid a set monthly fee per person enrolled (called a capitation rate), and bears financial risk for providing a defined package of services to the enrolled population. Forty-six states use risk-based Medicaid managed care; it is the most commonly used approach for organizing and financing primary and acute health care. But, apart from the Program of All-inclusive Care for the Elderly (PACE) model, only 11 states have applied risk-based managed care approaches in the delivery of long-term care--either institutional or home and community services and supports. Recently, however, the number of people receiving these services and supports through managed care delivery systems has grown significantly.

This chapter discusses the Medicaid authorities that states can use to provide home and community services through risk-based managed care delivery systems. It briefly decribes the history of programs that include long-term care services in managed care arrangements, and discusses how Medicaid authorities have evolved over time. Because the majority of Medicaid-eligible individuals who need long-term care also have Medicare coverage--known as people who are dually eligible--some programs are designed to integrate Medicaid and Medicare funding for these beneficiaries. Thus, this chapter also briefly discusses the Medicare authority for integrated service delivery models.1

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