States Turn to Private Insurance Companies for Managed Care - USATODAY.com

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By Phil Galewitz Kaiser Health News

Desperate to rein in rising Medicaid costs, Tennessee last year became the sixth state to require its frailest and costliest patients — the elderly and disabled who need long-term care — to enroll in managed care plans.

At least 10 other states, including Florida, Maryland, New Jersey and Rhode Island, are considering introducing or expanding the use of managed long-term care. The trend is sparking opposition from the nursing home industry and raising some concerns from AARP and other patient advocates.

Traditionally, states pay Medicaid providers, such as doctors and nursing homes, directly for individual services. But many officials say that system makes it hard for them to predict and control Medicaid spending. Under managed care, states pay health insurers a fixed monthly fee for each Medicaid patient. The lump sum is used for all the patient's costs, including physician and nursing home care.

Managed care companies, including UnitedHealthcare and Wellcare Health Plans, say they can save money for states by keeping Medicaid patients who need long-term care at home, whenever possible, rather than in more-expensive nursing homes. They use care coordinators to monitor patients to help ensure they're getting the right care in the most appropriate setting.

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