Medicaid

Several factors, including federal mandates that expand eligibility, medical price inflation, and creative financing schemes, have boosted Medicaid costs. To contain these expenses, 22 states have recently sought waivers from federal regulations that limit their ability to run extensive managed care programs. Some of these states have required the enrollment of their acute care patients--primarily low-income women and children--into managed care programs and have expanded coverage to previously ineligible persons. Arizona, which runs a Medicaid managed care program under a federal waiver obtained more than 10 years ago, has lowered Medicaid spending by millions of dollars. It also leads the states in its development of information systems for collecting medical encounter data essential for assessing quality of care.