The way states used to pay doctors and hospitals for treating Medicaid patients was by directly reimbursing them for the services they rendered. But spurred by criticism that the so-called "fee-for-service" method encouraged health care providers to rack up fees for unnecessary tests and procedures, states have been switching to managed care plans, in which contracted health care organizations agree to a flat monthly fee for covering Medicaid beneficiaries, regardless of the actual costs they incur. Connecticut, however, is going back to the old system. After struggling for years with managed care arrangements that state officials say were no longer saving the state money or providing patients adequate care, the state scrapped its Medicaid managed care system in January and began directly reimbursing providers again. The state's payment system may be a return to the past, but its method for providing care to Medicaid patients isn't. A non-profit organization - one of the state's former managed care organizations - provides care coordination for all Medicaid beneficiaries, including intensive case management for the elderly, blind and disabled. The state is also aggressively promoting "medical home" programs by providing grants to primary care physicians for hiring case managers to track patient care. And it is taking part in a federal grant program to improve care for individuals who qualify for both Medicaid and Medicare, as well as helping seniors transition out of nursing homes. Proponents of managed care don't put much stock in the state's efforts, however. "We see Connecticut as an anomaly," said Margaret Murray, executive director of the Association for Community Affiliated Health Plans. Most states are moving to managed care because it provides more budget certainty and flexibility than they can get running their own programs, Murray said. For instance, managed care organizations can create new types of services, like mental health counseling, to meet a community's needs as they arise, whereas states would have to get federal approval first, she pointed out. She also said many states don't have the personnel to coordinate care, develop a provider network and process claims efficiently. But according to Sylvia Kelly, CEO of Community Health Network, the organization managing Connecticut's new Medicaid program, the transition there has been "a non-event." Three months in, she said most providers are signing up and few patients have reported losing care. Moreover, the state expects the overhaul to save $41 million this year and $80 million in 2013. Oklahoma is the only one other state that has moved away from managed care. But its overhauled program, launched in 2003, is widely considered a success. (STATELINE.ORG)
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