Medicaid

Oregon's proposal for a managed health care delivery system that would serve more than 220,000 Medicaid clients statewide during the first year--triple the current enrollment--confronts a major hurdle in developing adequate health plan and physician capacity to handle a wave of new patients. Overall, Oregon's program has avoided many of the pitfalls encountered by other states. It is well accepted by providers and Medicaid clients, who are generally satisfied with access to and quality of care; program safeguards seem to be preventing inappropriate restrictions on health care access; and its quality assurance monitoring meets federal requirements. But GAO is concerned that Oregon may be unable to recruit enough doctors and health workers within the first year to deal with expanding patient rolls. Adequate capacity is needed if the project is to save enough money through managed care to extend Medicaid coverage to people without health insurance. In addition, the program could be improved by giving priority to improved child health screening services and by revising Oregon's client satisfaction surveys. Oregon also needs to beef up oversight of health plan insolvency and require better financial information from plans. GAO summarized this report and discussed additional concerns about states' managed care programs in testimony before Congress; see: Medicaid: Factors to Consider in Managed Care Programs, by Janet L. Shikles, Director of Health Financing and Policy Issues, before the Subcommittee on Health and the Environment, House Committee on Energy and Commerce. GAO/T-HRD-92-43, June 29, 1992 (nine pages).

GAO found that: (1) Oregon's current managed care program provides adequate access to health services, despite indications of strained capacity, which the state is working to address by recruiting more health plans; (2) Oregon's current program incorporates safeguards that help protect Medicaid managed care clients against inappropriate reductions in access to care; (3) the Oregon program meets federal requirements for safeguarding the quality of care through reviews of the quality assurance efforts of individual health plans and through annual reviews of patients' medical records; (4) the Oregon program also attempts to determine client views and problems through a grievance process, satisfaction surveys, and special hearings; (5) in 1991, Oregon officials found quality assurance activities at most participating health plans to be substantially in compliance and Oregon's opinion surveys and grievance procedures likewise disclosed few problems; (6) Oregon's independent medical record review process identified few quality problems in the program, but concluded that health screening services for children should be improved; (7) the effectiveness of Oregon's financial oversight systems could be improved by providing guidance on financial reporting, defining the state's solvency indicators and evaluation criteria, and extending reporting requirements to subcontractors; (8) Oregon could require contracting plans to disclose ownership, control, and other information, which could help program managers ensure that Medicaid funds are not diverted from the delivery of health services; and (9) concerns exist over whether Oregon's proposed demonstration project can develop adequate health plan and physician capacity within 1 year to serve three times its current managed care enrollment.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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