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1992.11.30 :  Medicaid Enrollment in Managed Care Plans

Contact: Bob Hardy (202) 690-6145
November 30, 1992

     The number of Medicaid recipients in managed-care plans
increased nearly 35 percent during the past year, HHS Secretary
Louis W. Sullivan, M.D., announced today.
       "Every year, more states use managed care as a strategy to
achieve cost-effective, high quality health care for the poor,"
Secretary Sullivan said.
       Nearly 12 percent of Medicaid recipients are enrolled in
managed-care plans this year.  That's up from approximately 9.6
percent in 1991 and only 2 percent in 1982.
       Managed-care plans, which include health maintenance
organizations and other arrangements, are now used by 36 states
to serve Medicaid recipients. Medicaid enrollees in such plans
reached 3,634,516 this year, up from 2,696,397 in 
1991.
       "Managed-care plans enable states to expand access to
quality health care, provide appropriate primary care without
duplication of services, and reduce excessive use of hospital
emergency rooms," said William Toby Jr., acting administrator of
the Health Care Financing Administration. 
       Toby added, "The preventive and primary care services
offered by managed-care plans result in early detection and
treatment of health conditions before they become major and
costly problems." 
       More than 30 million people are enrolled in the Medicaid
program, under which the federal government provides matching
funds to the states to help finance health care services for the
poor. 
       HCFA requires that a Medicaid managed-care plan comply
with federal quality standards and cost no more than the amount
that would be spent on comparable fee-for-service care.          
       Most of the growth in Medicaid managed care reflects
increased enrollment in HMOs and primary care case-management
programs.  Under case management, physicians contract with the
state to be responsible for primary care for specific Medicaid
recipients and for coordinating referrals for any needed
specialist or hospital care.  HMOs and other prepaid health plans
contract with a state to provide part of the Medicaid benefit
package on a prepaid risk basis. 

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EDITOR'S NOTE: HCFA, an agency of the U.S. Department of Health
and Human Services, directs the Medicare and Medicaid programs,
which help pay the medical bills of 62 million Americans.  HCFA's
estimated fiscal year 1993 expenditures are $230 billion, the
12th largest government budget of any kind in the world.