oversight

Medicaid and SCHIP: States Use Varying Approaches to Monitor Children's Access to Care

Published by the Government Accountability Office on 2003-01-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO            Report to Congressional Requesters




January 2003
               MEDICAID AND
               SCHIP
               States Use Varying
               Approaches to
               Monitor Children’s
               Access to Care




GAO-03-222
                                               January 2003


                                               MEDICAID AND SCHIP

                                               States Use Varying Approaches to
Highlights of GAO-03-222, a report to          Monitor Children's Access to Care
Representatives Sherrod Brown; John
Conyers, Jr.; Diana DeGette; John D.
Dingell; Gene Green; William J. Jefferson;
Sander M. Levin; and Ted Strickland




Over 25 million children have                  Overall, states imposed more access-related requirements on participating
health insurance coverage through              providers and more actively monitored children’s use of services in their
Medicaid or the State Children’s               Medicaid managed care programs than in their Medicaid FFS or SCHIP
Health Insurance Program                       programs.
(SCHIP). Coverage alone, however,
does not guarantee that services
will be available or that children
                                               Medicaid managed care: State requirements for managed care plans ranged
will receive needed care. GAO was              from very broad provisions that health plans must have “adequate” physician
asked to evaluate states’ efforts to           networks for serving their enrolled members to very specific standards, such
facilitate and monitor access to               as the number and geographic proximity of physicians and maximum time
primary and preventive services for            frames within which a new beneficiary receives a first appointment. States
children in these jointly funded               less often verified data that plans submitted to show compliance with these
federal-state programs. The study              requirements or independently monitored physicians’ availability. In one
surveyed 16 states, covering over              instance of verification, a state found that a third of a health plan’s physician
65 percent of the Medicaid and                 network was not accepting new Medicaid patients, thus limiting access for
SCHIP population. GAO analyzed                 new beneficiaries. The value of plan-submitted data that states used to
requirements relevant to managed               monitor children’s use of services was often compromised by continuing
care and fee-for-service (FFS)
delivery systems, including the
                                               problems with their completeness and reliability. Furthermore, information
number and location of physicians              derived from beneficiary satisfaction surveys was not necessarily
and their availability to see                  representative of all Medicaid managed care beneficiaries.
beneficiaries, monitoring of health
plan or physician compliance with              Medicaid FFS: Most states did not set goals for or analyze the availability of
these requirements, and collection             participating primary care physicians even though a majority of Medicaid-
and analysis of beneficiary service            eligible children in half of the states reviewed are still served in FFS
utilization data.                              programs. In most FFS programs, beneficiaries may seek care from any
                                               providers participating in the Medicaid program and may change providers
                                               at any time if they are dissatisfied. However, when FFS payment rates are
                                               lower than those paid by other purchasers—which was the case in most
                                               states reviewed—providers can be discouraged from participating in
                                               Medicaid and thus restrict beneficiaries’ access. States did little to monitor
                                               the use of services by Medicaid-eligible children in FFS programs despite
                                               having a ready source of data in their claims payment systems.

                                               SCHIP: Nine of the 16 states used the same providers, administrative
                                               systems, and monitoring approaches for their SCHIP programs as they did
                                               for Medicaid. The remaining 7 states, whose SCHIP programs were distinct
                                               from Medicaid and used managed care almost exclusively, set few
                                               requirements for or monitored providers’ availability to SCHIP-eligible
                                               children. States with distinct SCHIP programs also reported fewer efforts to
                                               monitor children’s use of services than in their Medicaid programs.

                                               Comments on our report from the Department of Health and Human
                                               Services highlighted new federal requirements for state oversight of
www.gao.gov/cgi-bin/getrpt?GAO-03-222.
                                               managed care, and design differences between Medicaid and SCHIP that can
To view the full report, including the scope   affect monitoring approaches. States we reviewed provided clarifying or
and methodology, click on the link above.      technical comments regarding their oversight of access, which we
For more information, contact Kathryn G.
Allen (202) 512-7118.
                                               incorporated in the report as appropriate.
Contents


Letter                                                                                          1
                       Results in Brief                                                         4
                       Background                                                               6
                       In Medicaid Managed Care, States Focused More on Setting Plan
                          Network Requirements than on Monitoring Plans or Analyzing
                          Service Utilization                                                 14
                       For Medicaid FFS, State Requirements for Providers and
                          Monitoring of Service Utilization Were More Limited                 33
                       Distinct SCHIP Programs Had Fewer Network Requirements and
                          Less Monitoring of Service Utilization                              40
                       Agency and State Comments and Our Evaluation                           44

Appendix I             Medicaid HEDIS Measures Related to Service
                       Utilization                                                             50



Appendix II            Managed Care Plan Withdrawals from Medicaid in
                       Four States                                                             53
                       Massachusetts                                                          53
                       Ohio                                                                   54
                       Tennessee                                                              55
                       Texas                                                                  56

Appendix III           Analysis of Medicaid FFS Payment Rates in
                       Selected States                                                         58
                       Methodology for Comparison of FFS Payment Rates                        59

Appendix IV            Comments from the Department of Health and
                       Human Services                                                          61



Appendix V             GAO Contact and Staff Acknowledgments                                   65



Related GAO Products                                                                           66




                       Page i                                GAO-03-222 Medicaid and SCHIP Access
Tables
          Table 1: SCHIP Design Choices for 16 States, as of March 2002              7
          Table 2: Share of Children Enrolled in Medicaid and Separate
                   SCHIP Programs, by Service Delivery Method, for 16
                   States                                                          10
          Table 3: Examples of Specific State Standards for Plan Networks
                   and Appointment Waiting Times                                   17
          Table 4: Examples of Medicaid HEDIS Measures Related to Service
                   Utilization for Children                                        25
          Table 5: Estimated Percentage of Medicaid Children Excluded
                   from HEDIS                                                      27
          Table 6: Examples of Beneficiary Satisfaction Questions for
                   Children Covered by CAHPS                                       28
          Table 7: Estimated Percentage of Medicaid Children Excluded
                   from CAHPS                                                      29
          Table 8: Length of Medicaid Enrollment Required for Selected
                   HEDIS Measures for Children’s and Adolescents’ Use of
                   Services                                                        51
          Table 9: Examples of Plan Withdrawal Transition Activities
                   Conducted by Four State Medicaid Programs                       57
          Table 10: Medicaid FFS Payment Rates, Expressed as a Percentage
                   of Medicare Payments, in 13 States with Traditional FFS or
                   Primary Care Case Manager Delivery Systems That Serve
                   Children                                                        59
          Table 11: CPT 4 Codes Used in Comparing Medicaid and Medicare
                   Fees                                                            60


Figures
          Figure 1: Selected Medicaid Managed Care Plan Network
                   Requirements and Standards in 14 States                         16
          Figure 2: Variation in 14 States’ Monitoring of Medicaid Managed
                   Care Plans’ Provider Information                                19
          Figure 3: Selected Requirements for Medicaid PCCM Providers in
                   Seven States                                                    37
          Figure 4: Comparison of Seven States’ Requirements and Standards
                   for Providers in Medicaid and SCHIP Managed Care                42




          Page ii                                 GAO-03-222 Medicaid and SCHIP Access
Abbreviations

ACG         ambulatory care group
AHRQ        Agency for Healthcare Research and Quality
CAHPS       Consumer Assessment of Health Plans
CMS         Centers for Medicare & Medicaid Services
CPT 4       Current Procedural Terminology, 4th edition
EPSDT       Early and Periodic Screening, Diagnostic and Treatment
FFS         fee-for-service
HEDIS       Health Plan Employer Data and Information Set
HHS         Department of Health and Human Services
HRSA        Health Resources and Services Administration
NCQA        National Committee on Quality Assurance
PCCM        primary care case manager
PCP         primary care provider
SCHIP       State Children’s Health Insurance Program




Page iii                            GAO-03-222 Medicaid and SCHIP Access
United States General Accounting Office
Washington, DC 20548




                                   January 14, 2003

                                   The Honorable Sherrod Brown
                                   The Honorable John Conyers, Jr.
                                   The Honorable Diana DeGette
                                   The Honorable John D. Dingell
                                   The Honorable Gene Green
                                   The Honorable William J. Jefferson
                                   The Honorable Sander M. Levin
                                   The Honorable Ted Strickland
                                   House of Representatives

                                   Over 25 million children have health care coverage through Medicaid or
                                   the State Children’s Health Insurance Program (SCHIP), joint federal-state
                                   programs that finance health insurance for certain low-income adults and
                                   children. Medicaid and SCHIP provide the financial means for low-income
                                   children to receive primary, preventive, and specialty care, which are
                                   important to ensuring a healthy child and adolescent population. Having a
                                   regular provider, or usual source of care, also can help reduce the use of
                                   services from high-cost sources such as emergency rooms and inpatient
                                   hospital care.1

                                   While health insurance coverage can provide the financial means to obtain
                                   care, it does not by itself guarantee that health services will be available
                                   and accessible or that beneficiaries will receive needed care. Access to
                                   primary care services is significantly affected by local factors that vary
                                   across and within states, such as physician supply, location, and
                                   willingness to participate in a state’s Medicaid and SCHIP programs. While
                                   federal law establishes general requirements to ensure that Medicaid and
                                   SCHIP beneficiaries have access to covered health services, the extent to
                                   which children actually receive these health care services is influenced by
                                   how states implement their programs and monitor access at the state and
                                   local levels.

                                   The type of service delivery and financing system that states use in their
                                   Medicaid and SCHIP programs potentially affects beneficiaries’ ability to



                                   1
                                    A provider may be a physician, a group of physicians practicing together, or an outpatient
                                   clinic with physician services.



                                   Page 1                                            GAO-03-222 Medicaid and SCHIP Access
locate and obtain services. Managed care, which often entails states
making capitation payments to managed care plans to provide or arrange
for all services for enrolled beneficiaries, encourages participating plans to
offer and coordinate primary and specialty care for beneficiaries. Managed
care also may promote efficiency by attempting to ensure that only
necessary services are provided in the most appropriate setting.
Appropriate safeguards are important, however, as capitation payments
can also create an incentive to underserve or even deny beneficiaries
access to needed care since plans and, in some cases, providers can profit
from not delivering services for which they have already received
payment. In contrast, beneficiaries in fee-for-service (FFS) systems,
including those receiving care in a primary care case manager (PCCM)
system,2 may be at risk for the overprovision of services as providers seek
to increase revenue. However, if FFS payment levels are too low,
physicians may underserve their patients or be unwilling to participate at
all.

Our prior work has shown that access to care in Medicaid has been
problematic for certain services—such as health screening for children,
oral health, and mental health—and for particular populations, such as
children with special needs.3 Recent reports that some physicians are
unwilling to take more Medicaid patients and that some managed care
plans are exiting from the Medicaid program have raised additional
concerns about adequate access for eligible children. Now that SCHIP is
beginning its sixth year of implementation, a related concern is the
experiences of children in accessing care under SCHIP, where states have
greater flexibility to decide whom to cover, what services to provide, and
how to pay for services, including required beneficiary cost sharing.
Accordingly, you asked us to evaluate states’ efforts to routinely monitor
access to primary and preventive care services in (1) Medicaid managed
care, including actions selected states took when participating health
plans withdrew from the program, (2) Medicaid FFS-based delivery
systems, including PCCM systems, and (3) SCHIP.




2
 FFS systems include traditional FFS, in which a provider bills the program for services
provided to an eligible beneficiary, and PCCM systems, in which a physician, physician
group practice, or similar entity contracts with the state to locate, coordinate, and monitor
primary health services for Medicaid beneficiaries for a nominal monthly, per capita case
management fee (usually around $3).
3
See related GAO products listed at the end of this report.




Page 2                                             GAO-03-222 Medicaid and SCHIP Access
    To examine these issues, we analyzed 16 states’ approaches to monitoring
    access to primary and preventive health care services in their Medicaid
    and SCHIP programs. These states were Arkansas, California, Colorado,
    Florida, Illinois, Louisiana, Maryland, Massachusetts, Michigan, Nevada,
    New York, Ohio, Pennsylvania, Tennessee, Texas, and Washington. We
    selected these states to obtain wide representation of geographic regions,
    managed care and FFS systems, and SCHIP program designs.4 Over 65
    percent of all Medicaid and SCHIP beneficiaries resided in these 16 states.
    To evaluate state approaches to monitoring access to care, we focused our
    analysis of states’ managed care and FFS delivery systems in three key
    areas:

•   specific requirements for participating managed care plans and physicians
    to help ensure sufficient physician capacity and accessibility for eligible
    beneficiaries;
•   actions to independently verify or otherwise monitor provider
    participation; and
•   routine data collection and analysis of information on beneficiaries’ actual
    service utilization, including patient satisfaction surveys.

    For states’ Medicaid and SCHIP managed care programs, these service
    utilization data included encounter data, which are individual-level data on
    service use that plans are required to collect and report to the state; the
    Health Plan Employer Data and Information Set (HEDIS), developed by
    the National Committee for Quality Assurance (NCQA) to help purchasers
    and consumers compare the performance of health plans in providing
    selected services; and the Consumer Assessment of Health Plans
    (CAHPS), which is a standardized patient satisfaction survey developed by
    the federal Agency for Healthcare Research and Quality (AHRQ). We
    conducted site visits in four states where managed care plan withdrawals
    had been reported—Massachusetts, Ohio, Tennessee, and Texas—and
    analyzed information from primary care providers (PCP);5 representatives
    of advocacy groups; state insurance departments; and managed care plans
    participating in Medicaid, SCHIP, or both. At the federal level, we
    interviewed officials at the Centers for Medicare & Medicaid Services


    4
     States can take three approaches in designing their SCHIP programs: (1) expand Medicaid,
    (2) construct separate child health programs distinct from Medicaid, or (3) use a
    combination of both approaches.
    5
     For purposes of this report, PCPs are usually physicians trained in internal medicine,
    pediatrics, family medicine, or obstetrics and gynecology who participate in PCCM or
    managed care programs in Medicaid or SCHIP.




    Page 3                                            GAO-03-222 Medicaid and SCHIP Access
                   (CMS), which oversees states’ Medicaid and SCHIP programs, and the
                   Health Resources and Services Administration (HRSA), which has
                   responsibility for analyzing issues related to access to care, as well as joint
                   responsibility for oversight of SCHIP. We reviewed relevant documents,
                   including federal laws, federal regulations, state contracts with managed
                   care organizations, and various federal and state reports related to access.
                   We conducted our work from June 2001 through December 2002 in
                   accordance with generally accepted government auditing standards.


                   Each of the states we reviewed with Medicaid managed care programs set
Results in Brief   requirements for participating plans’ provider networks, which include the
                   physicians and specialists who have agreed to deliver or arrange for health
                   care services to beneficiaries enrolled in a health plan. These state
                   requirements ranged from broad provisions that health plans must have
                   “adequate” networks for serving their enrolled members, to very specific
                   standards that set, for example, a maximum number of beneficiaries per
                   primary care physician or maximum time frames within which a provider
                   must see a new beneficiary for a first appointment. The states less
                   frequently verified data that plans submitted to them or independently
                   collected or analyzed data to ascertain compliance with the requirements.
                   States that did routinely monitor plans’ compliance with network
                   requirements often identified potential access problems and took steps to
                   address them. For example, a state review of the physicians listed in a
                   plan’s network found that many physicians were not accepting new
                   Medicaid patients, resulting in too few physicians accessible to such
                   patients. Beyond setting requirements for or monitoring plans’ network
                   size and availability, states attempted to assess the extent to which
                   beneficiaries were actually receiving services through three key routine
                   data sources: encounter data that states require plans to submit on
                   individual-level service use, assessments of managed care plans’
                   performance on specified measures, and periodic beneficiary satisfaction
                   surveys. However, the value of these data was compromised by continuing
                   problems in most states with encounter data’s completeness and
                   reliability; additionally, standardized data on plan performance and
                   beneficiary satisfaction surveys were not representative of all Medicaid
                   managed care beneficiaries. Potential issues of access to care associated
                   with managed care plans withdrawing from Medicaid in four states we
                   visited affected significantly different shares of eligible beneficiaries,
                   ranging from about 1 percent of Medicaid beneficiaries in Texas to almost
                   50 percent in Tennessee. While these four states had taken various steps to
                   help minimize disruption in access to care for beneficiaries affected by
                   plan withdrawals, it was not clear to what extent these efforts had been


                   Page 4                                     GAO-03-222 Medicaid and SCHIP Access
successful in helping beneficiaries transition smoothly to new health plans
and avoid access-to-care problems.

States did considerably less in their Medicaid FFS programs—which still
serve the majority of children in half of the states we reviewed—to
establish requirements for or monitor provider availability or to assess
beneficiaries’ utilization of services than in their managed care programs.
For traditional FFS programs, beneficiaries may seek care from any
providers participating in the Medicaid program and may change providers
at any time if they are dissatisfied. However, Medicaid beneficiaries’ ability
to easily change providers depends on the number, type, and location of
providers willing to take new Medicaid patients, which in turn is strongly
influenced by Medicaid payment rates and associated administrative
processes. We found that FFS payment rates in most states we reviewed
were significantly lower than those paid by other purchasers for
comparable services, which can discourage providers from participating in
the program and thus restrict beneficiaries’ access to a broad supply of
providers. Officials in several of the states we contacted with Medicaid
FFS programs said that anecdotal information and complaint data
suggested that low payment rates, slow payment, and other administrative
issues deterred physicians in primary care or in some specialties from
participating in the program. Most of the seven states we reviewed with
PCCM programs set certain requirements for participating physicians,
such as limiting the number of beneficiaries that a PCCM could enroll in
an effort to ensure that physicians had the capacity to serve each
beneficiary. However, these states did little to monitor the extent to which
beneficiaries were successful in obtaining appointments as needed. In
regard to routine data collection and analyses, all but one of these seven
states analyzed their FFS claims data and provided PCCMs with
comparative data on service utilization patterns for their own practices
and for other PCCMs. However, these comparative data often focused on
higher-cost services, such as inpatient hospitalization or emergency room
use.

The majority of the states we reviewed—9 of the 16—designed their
SCHIP programs to be an expansion of their Medicaid programs or
modeled them after Medicaid, with the same providers and administrative
systems. Therefore, in these states, the requirements for, and monitoring
of, SCHIP provider participation and beneficiary service utilization
mirrored that of their Medicaid programs. In contrast to these states, 7
states chose to serve all or most of their SCHIP beneficiaries through
programs that were distinct from Medicaid. These states did significantly
less in their distinct SCHIP programs in terms of setting requirements for,


Page 5                                    GAO-03-222 Medicaid and SCHIP Access
                          or monitoring, participating providers or beneficiary service use than they
                          did for their Medicaid programs.

                          We received comments on a draft of this report from the Department of
                          Health and Human Services (HHS), as well as from 13 of the 16 states that
                          were included in our review. In response to our findings, HHS highlighted
                          new federal requirements for state oversight of Medicaid managed care
                          that are to be fully implemented by August 2003. HHS also pointed out that
                          design differences between Medicaid and SCHIP may affect states’
                          approaches to monitoring access to care. State officials provided clarifying
                          and technical comments regarding their oversight of access to care, which
                          we incorporated as appropriate throughout this report.


                          States’ Medicaid and SCHIP programs are governed by various federal
Background                requirements regarding eligibility, covered services, and access to care.
                          Under these requirements, states generally have some discretion in
                          determining the amount, duration, and scope of services their programs
                          will provide, and the delivery and financing systems through which
                          beneficiaries will receive care—that is, FFS, managed care, or both.
                          Federal requirements relating to Medicaid beneficiaries’ access to care are
                          established in statute; for managed care service delivery systems, detailed
                          federal regulations regarding access were recently issued.6 SCHIP
                          requirements are also set out in statute but are less specific than those for
                          Medicaid and do not include detailed managed care requirements or
                          regulations comparable to those for Medicaid.


Populations Covered and   Since 1965, Medicaid has financed health care coverage for certain
Program Characteristics   categories of low-income individuals—including over 22 million children
                          in 2000. Federal law requires states to extend Medicaid eligibility to
                          children aged 5 and under if their family incomes are at or below 133
                          percent of the federal poverty level and to children aged 6 through 18 in
                          families with incomes at or below the federal poverty level. At their
                          discretion, most states have set income eligibility thresholds for families
                          with children that expand their Medicaid programs beyond the minimum
                          federal statutory levels.




                          6
                          67 Fed. Reg. 40989 (2002).




                          Page 6                                    GAO-03-222 Medicaid and SCHIP Access
In 1997, the Congress established SCHIP, which provides health care
coverage to low-income, uninsured children living in families whose
incomes exceed the eligibility limits for Medicaid. SCHIP covered over 4.6
million children in fiscal year 2001, generally targeting children in families
with incomes up to 200 percent of the federal poverty level.7 Compared
with Medicaid, which has specific minimum federal eligibility and benefit
requirements, the SCHIP legislation provides states more flexibility in how
they choose to structure their programs. States have three options in
designing SCHIP: They may expand their Medicaid programs, develop a
separate child health program that functions independently of Medicaid,
or create a combination of the two approaches. (See table 1 for the
program designs of the 16 states in our sample.) While Medicaid expansion
programs under SCHIP must use Medicaid’s provider networks and
delivery systems, SCHIP separate child health programs may depart from
Medicaid requirements particularly with regard to covered benefits and
the plans, providers, and delivery systems available to beneficiaries.8

Table 1: SCHIP Design Choices for 16 States, as of March 2002

    Design                              State
    Medicaid expansion                  Arkansas,a Louisiana, Ohio, and Tennessee
    Separate program                    Colorado, Nevada, Pennsylvania, and Washington
                                                                                b
    Combination                         California, Florida, Illinois, Maryland,
                                                         b
                                        Massachusetts, Michigan, New York, and Texas

Source: CMS.
a
 In February 2001, Arkansas received approval from CMS to implement a separate SCHIP program;
however, this program had not been implemented as of February 2002.
b
 The state’s separate SCHIP portion of its combination program provides coverage either through
(1) a premium assistance program for families with access to private insurance coverage or
(2) Medicaid providers and services. Premium assistance programs were not included in our study.


Medicaid and SCHIP differ in terms of the share of their program
expenditures that come from federal funds. No overall federal budget limit
exists for the Medicaid program; it is an open-ended entitlement whereby



7
 The SCHIP statute allows a state to expand eligibility to 200 percent of the poverty level or
up to 50 percentage points above its Medicaid eligibility standard as of March 31, 1997. As
of January 2002, states’ upper income eligibility thresholds for SCHIP ranged from 133 to
350 percent of the federal poverty level.
8
 Throughout this report, SCHIP beneficiaries enrolled in Medicaid expansion programs are
included in the discussion of Medicaid.




Page 7                                               GAO-03-222 Medicaid and SCHIP Access
                   state expenditures for services that are provided under a CMS-approved
                   state Medicaid plan are matched by the federal government using a
                   formula that results in federal shares that currently range from 50 to 76
                   percent of expenditures, depending on a state’s per capita income in
                   relationship to the national average. The federal share of Medicaid
                   expenditures is about 57 percent. In contrast to Medicaid, federal funding
                   for SCHIP is limited. The Congress appropriated $40 billion over 10 years
                   (from fiscal years 1998 to 2007), with a specified amount allocated
                   annually to each of the 50 states, the District of Columbia, Puerto Rico,
                   and 4 U.S. territories. State SCHIP expenditures are matched by federal
                   payments up to the state’s annual appropriated allotment.9 The SCHIP
                   statute provides for an “enhanced” federal matching rate, with each state’s
                   SCHIP rate exceeding its Medicaid rate. The federal share of each state’s
                   SCHIP expenditures ranges from 65 to 83 percent; the federal share of
                   total SCHIP expenditures is about 72 percent.


Delivery Systems   States provide Medicaid and SCHIP services through two distinct service
                   delivery and financing systems—managed care and FFS, with the latter
                   including PCCM.10 Under a capitated managed care model, states contract
                   with a managed care organization and prospectively pay the plans a fixed
                   monthly fee per patient to provide or arrange for most health services.
                   Plans, in turn, pay providers either retrospectively for each service
                   delivered on a FFS basis or through prospective capitation payment
                   arrangements. In contrast, in a traditional FFS delivery system, the
                   Medicaid program reimburses providers directly and on a retrospective
                   basis for each service delivered. The PCCM model is similar to a
                   traditional FFS arrangement except that PCCMs are paid a monthly, per
                   capita case management fee, usually around $3, to coordinate care for
                   beneficiaries, in addition to FFS reimbursement for any health care
                   services they provide. PCCMs, which are selected by beneficiaries upon
                   enrollment, are responsible for treating and coordinating the care for
                   those beneficiaries. Coordination may involve referrals to specialists and



                   9
                    Annual allotments are made to states for use over a 3-year period. For SCHIP annual
                   allotments that remain unspent after 3 years, the Secretary of HHS is required to determine
                   an appropriate procedure for redistributing any unused SCHIP funds to states that have
                   exhausted their allotments.
                   10
                    We included PCCMs as FFS-based arrangements because participating providers are
                   predominately paid on a FFS basis. Thus, throughout this report, the term managed care
                   only refers to capitated managed care arrangements.




                   Page 8                                            GAO-03-222 Medicaid and SCHIP Access
other providers. In some cases, receipt of specialty and other services may
require PCCM approval.

The 16 states we reviewed often structured their Medicaid and SCHIP
service delivery systems differently. As shown in table 2, the exclusive use
of managed care was less prevalent in Medicaid than in separate SCHIP
programs (3 and 6 states, respectively), with 3 states—Maryland,
Michigan, and Tennessee—using managed care for virtually all children in
both Medicaid and SCHIP. The states were more likely to use a
combination of managed care and FFS approaches for their Medicaid
programs than for SCHIP (11 and 5 states, respectively). Despite the
recent growth in states’ use of managed care, FFS is still a major
component of many states’ programs, especially for Medicaid.




Page 9                                   GAO-03-222 Medicaid and SCHIP Access
Table 2: Share of Children Enrolled in Medicaid and Separate SCHIP Programs, by Service Delivery Method, for 16 States

                                                  Medicaid                                           Separate SCHIP programa
                                         FFS-based                                                 FFS-based
                                  Traditional                                                  Traditional
State                                    FFS       PCCM              Managed care                     FFS      PCCM Managed care
                                            b                                                            c          c
Arkansas                                            100%                        --                                               --
                                                        b
California                               29%                                 71%                        --         --        100%
Colorado                                 28%         18%                     54%                        --         --        100%
                                            d                                                            b          e
Florida                                              53%                     47%                                 2%           98%
Illinois                                 87%           --                    13%                      99%          --          1%
                                                                                                         c          c
Louisiana                                88%         12%                        --                                               --
                                            d                                                                                      f
Maryland                                               --                   100%                        --         --
                                            d
Massachusetts                                        63%                     37%                        --      65%           35%
                                            d
Michigan                                               --                   100%                        --         --        100%
Nevada                                   41%           --                    59%                      13%          --         87%
                                                                                                         b
New York                                 61%           --                    39%                                   --        100%
                                                                                                         c                        c
Ohio                                     67%           --                    33%                                   --
                                            d
Pennsylvania                                         24%                     76%                        --         --        100%
                                                                                                                                  c
Tennessee                                  --          --                   100%                        --         --
Texas                                    42%         21%                     37%                        --         --        100%
                                                        b                                                           b
Washington                               34%                                 66%                      57%                     43%
Number of states using system              9           7                       14                       3          2            11
                                        Source: State data, as of December 2001, except for New York data, which are as of September
                                        2001.
                                        a
                                            Includes the separate child health programs in states with combination or separate SCHIP programs.
                                        b
                                        Although this delivery system exists in the state, it includes less than 1 percent of children enrolled in
                                        Medicaid or SCHIP and thus was not included in our study.
                                        c
                                        Not applicable. State’s SCHIP program is a Medicaid expansion; thus, delivery systems are the same
                                        as those in the state’s Medicaid program.
                                        d
                                         Delivery system exists for children with special needs, which is outside the scope of this study.
                                        Additionally, state enrolls children in FFS until they transition to a managed care or a PCCM delivery
                                        system. For example, families with eligible children in Florida are allowed 90 days in which to select a
                                        PCP in managed care or a PCCM; during these 90 days, they are enrolled in Medicaid FFS.
                                        e
                                         In Florida, delivery systems under SCHIP vary by age. Families with children under age 5 can select
                                        between managed care and a PCCM, while older children are limited to managed care service
                                        delivery.
                                        f
                                        Not applicable; Maryland’s separate SCHIP portion of its combination program was not operational
                                        when our study began and thus was not included in the study.




                                        Page 10                                                   GAO-03-222 Medicaid and SCHIP Access
Federal Requirements for   A state is required by federal statute to ensure that its payment and
Access to Care             delivery systems will afford beneficiaries’ access to services similar to that
                           of its general population;11 further, Medical assistance must be provided
                           with reasonable promptness.12 While Medicaid traditional FFS delivery
                           systems have no additional access requirements, managed care and PCCM
                           delivery systems do. States are required to ensure that beneficiaries’
                           access to care in managed care and PCCM is equal to that available to
                           beneficiaries in traditional FFS. On June 14, 2002, CMS published final
                           rules to implement new provisions the Balanced Budget Act of 1997 set
                           out for states’ Medicaid managed care programs. These new rules address
                           the requirements, prohibitions, and procedures for the provision of
                           different types of Medicaid managed care and PCCM delivery systems.
                           Under these rules, which became effective August 13, 2002, states have
                           until August 13, 2003, to bring all aspects of their state managed care
                           programs into compliance with the new requirements.13

                           States that wish to use managed care and PCCMs to deliver Medicaid
                           services must have CMS approval to do so. CMS approval is in part
                           intended to ensure that adequate protections are in place to safeguard the
                           interests of beneficiaries enrolled in managed care who may find their
                           freedom to seek the care of any participating provider at any time more
                           restricted than in FFS. In managed care, states may “lock in” beneficiaries
                           to one managed care plan and its network of providers for up to 1 year in
                           order to provide the plan sufficient time and opportunity to manage the
                           care of its enrollees most efficiently and appropriately. States request CMS
                           approval for their managed care programs through one of two methods:
                           (1) as a waiver from certain statutory requirements or (2) as an
                           amendment to the state’s Medicaid plan.14 Fifteen of the 16 states we
                           reviewed received CMS approval to provide managed care through two
                           types of waivers of statutory provisions, program and demonstration
                           waivers, while one state—Nevada—received approval through a state plan
                           amendment.


                           11
                            See 42 U.S.C. § 1396a(a)(30); 42 C.F.R § 438.2.
                           12
                            See 42 U.S.C. §1396a(a)(8).
                           13
                             The new Medicaid managed care rules have more detailed requirements for states than in
                           the past, such as requiring assurances from participating plans concerning the availability
                           of services, adequate capacity and services, coordination and continuity of care, and
                           coverage and authorization of services.
                           14
                            Implementing managed care service delivery by amending a state’s Medicaid plan has
                           been an option for states since passage of the Balanced Budget Act of 1997.




                           Page 11                                            GAO-03-222 Medicaid and SCHIP Access
Of the states we reviewed, 12 had approved “freedom-of-choice” program
waivers, under section 1915(b) of the Social Security Act, which permitted
them to direct beneficiaries to enroll in a managed care system.15 In
reviewing and approving program waivers, CMS requires states that wish
to limit beneficiaries’ enrollment to managed care to offer a choice of at
least two managed care plans or allow beneficiaries to choose between
one managed care plan and a PCCM system. CMS also requires states to
ensure that (1) managed care plans’ physician networks under the waiver
include approximately the same number or more physicians than were
available before the waiver’s implementation and (2) services under
program waivers are provided within reasonable time frames and are
furnished within reasonable distances for the beneficiaries to travel. As a
condition of waiver approval, during the period of our review CMS asked
states to specify whether they had established access-related requirements
for participating plans in areas such as provider capacity, or maximum
times frames for beneficiaries to schedule appointments, travel to
physicians’ offices, or wait in physicians’ offices to be seen. CMS did not
require states to establish specific requirements in these areas, but if they
did, they were asked to describe in their waiver applications how they
planned to monitor compliance with any established requirements. Initial
approval of a program waiver is for a 2-year period, at which time the
waiver can be reviewed and approved for renewal by CMS. Waiver
renewals can result in changes in specific requirements for states.

Six of the states we reviewed—Arkansas, California, Maryland,
Massachusetts, New York, and Tennessee—had approved comprehensive
research and demonstration waivers, authorized by section 1115 of the
Social Security Act, to test concepts likely to further program objectives.16
A demonstration waiver provides a state with greater flexibility to design
its Medicaid programs in areas such as eligibility standards, covered
benefits, and reimbursement rules. In reviewing and approving
demonstration waivers, CMS often establishes terms and conditions with
which states must comply that are more prescriptive than requirements for


15
 The freedom of choice waiver is established by section 1915(b) of the Social Security Act
and is set forth at 42 U.S.C. §1396n(b). The 12 states that we reviewed with program
waivers were Arkansas, California, Colorado, Florida, Louisiana, Michigan, New York,
Ohio, Pennsylvania, Tennessee, Texas, and Washington.
16
 The demonstration waiver is set forth at 42 U.S.C. § 1315(a). In addition to comprehensive
waivers, states can also use section 1115 waivers for specific populations or services, such
as pharmacy or extending coverage to parents. Four of the 15 states—California, Colorado,
Florida, and Illinois—have noncomprehensive section 1115 waivers.




Page 12                                           GAO-03-222 Medicaid and SCHIP Access
program waivers. For example, in approving demonstration waivers, CMS
has required states to (1) specify ratios that set the maximum number of
enrolled beneficiaries per participating PCP, (2) establish the maximum
time or distance for beneficiaries to travel to a physician’s office, and
(3) limit beneficiaries’ waiting times when scheduling appointments for
urgent, routine, or specialty care. Initial approval of a demonstration
waiver is for a 5-year period, at which time the waiver can be reviewed and
approved for renewal by CMS.

In contrast to Medicaid, in their SCHIP programs states may require
mandatory beneficiary enrollment in managed care without offering a
choice among health plans. Federal SCHIP access-related requirements
are also less extensive than those for Medicaid. The SCHIP statute requires
that states have methods in place to ensure access to covered services,
including emergency services, but does not specify precise requirements.17
States must describe their methods to ensure access to covered services,
including any monitoring procedures, in their SCHIP state plans. In
addition, the SCHIP statute required each state to submit to the Secretary
of HHS a one-time program evaluation in March 2000.18 States must also
submit to the Secretary annual reports that show their progress toward
reaching their strategic objectives and performance goals, some of which
may relate to access to care.




17
 See 42 U.S.C. § 1397bb.
18
  A state’s SCHIP evaluation was required to address several areas, including (1) the quality
of health coverage provided, (2) choices of heath benefits coverage, (3) activities to
coordinate SCHIP with other public and private programs, (4) changes in trends in the
states that affect the provision of health insurance, and (5) recommendations for improving
SCHIP.




Page 13                                           GAO-03-222 Medicaid and SCHIP Access
                       In attempting to ensure access to care in Medicaid managed care, states
In Medicaid Managed    focused more on setting requirements for managed care plans than on
Care, States Focused   monitoring compliance with these requirements or on analyzing
                       beneficiaries’ use of services. The 14 states we reviewed with Medicaid
More on Setting Plan   managed care programs reported varying levels of effort (1) to establish
Network                certain requirements and standards for participating plans’ physician
                       networks and to monitor their implementation and (2) to collect and
Requirements than on   analyze data on service utilization, such as encounter data from
Monitoring Plans or    participating plans and beneficiary satisfaction surveys. State
Analyzing Service      requirements for plans’ physician networks varied widely in their
                       specificity, from broad statements that health plans must have “adequate”
Utilization            physician networks serving their enrolled members to very specific
                       standards that set, for example, a maximum average number of
                       beneficiaries per PCP or a maximum time frame for scheduling a first
                       appointment. All but 1 of the 14 states required managed care plans to
                       routinely submit lists of physicians participating in their networks, ranging
                       from weekly to quarterly reporting. However, fewer states independently
                       verified or routinely monitored aspects of the submitted data on managed
                       care plans’ provider networks. For example, 8 of the 13 states receiving
                       plans’ routine lists of participating physicians periodically verified the
                       number of physicians accepting new Medicaid patients, but only 5 states
                       analyzed the number of physicians to identify those participating in
                       multiple plans, which could overstate overall physician capacity.
                       Moreover, only 5 states routinely or independently assessed plans’
                       compliance with maximum waiting times for beneficiaries’ scheduling
                       appointments. In some cases, states left it to plans to establish time frames
                       for scheduling appointments, rather than setting statewide standards for
                       all plans.

                       Beyond network-related requirements and any associated monitoring,
                       states attempted to assess beneficiaries’ actual use of services through
                       various routine data sources and occasional special studies. Routine data
                       sources included encounter data, where states require health plans to
                       submit data for each service provided to each enrollee, periodic
                       assessments of plans’ performance against standardized measures, and
                       beneficiary satisfaction surveys. But continuing problems with the
                       reliability of encounter data—and the fact that standardized data on plan
                       performance and beneficiary satisfaction surveys were not representative
                       of all Medicaid managed care enrollees—tended to undermine the utility
                       of these data sources in describing the experiences of beneficiaries and
                       their service utilization. The four states we visited that had experienced
                       the withdrawal of managed care plans from their Medicaid programs had
                       taken various steps to help minimize disruption in care for affected


                       Page 14                                   GAO-03-222 Medicaid and SCHIP Access
                            beneficiaries. However, it is not clear to what extent these states
                            monitored service utilization for beneficiaries affected by such changes
                            and their experiences in transitioning to new plans and physicians.


Most States Set Plan        To oversee access to care in their Medicaid managed care programs, the
Network Requirements but    states we reviewed established requirements for participating plans that
Less Frequently Monitored   most often focused on the size and structure of their physician networks,
                            such as the number and geographic location of PCPs and specialists, and
Plans’ Compliance           beneficiaries’ ability to schedule appointments. Some states, such as
                            Colorado, Texas, and Washington, had broad requirements that physician
                            networks must be adequate to serve beneficiaries, as shown in figure 1.
                            Among the 14 states that used managed care in their Medicaid programs,
                            broad network requirements were more prevalent for specialists than for
                            PCPs. In contrast, 11 of 14 states set specific standards or ratios relating to
                            the number of enrolled beneficiaries per PCP, and 13 set standards for
                            providers’ geographic proximity to beneficiaries, such as the maximum
                            distance or travel time for a beneficiary to reach a provider’s office. More
                            variation was evident in states’ requirements for plans in terms of
                            appointment scheduling for beneficiaries. All 14 states set maximum time
                            frames to schedule routine and urgent appointments, while 6 states also
                            set maximum time frames for a newly enrolled beneficiary’s first
                            appointment and 8 states set maximum in-office waiting times.




                            Page 15                                    GAO-03-222 Medicaid and SCHIP Access
Figure 1: Selected Medicaid Managed Care Plan Network Requirements and
Standards in 14 States


    State                           Network size and structure             Appointment waiting times
                                PCPs        Specialists Geographic First visit Appointment In-office
                                                        distribution            scheduling waiting time
     California                                                                                    a

     Colorado
     Florida
     Illinois
     Maryland
     Massachusetts                                                                                 a

     Michigan
     Nevada
     New York
     Ohio                                                                   b

     Pennsylvania
     Tennessee
     Texas                                                                                         a

     Washington
       Specific Standard
       General requirement that health plans’ networks be adequate to serve their members
       No standard
    Source: GAO analysis of states’ data, as of December 2001.


a
State does not have a specific standard but does require plans to monitor this measure.
b
State only has a standard for selected populations, such as children with special needs.


States took varying approaches in setting their requirements for plan
networks and appointment waiting times, as shown in table 3. For
example, Florida required physicians to certify that their overall practice
did not exceed 3,000 patients, whereas other states established specific
Medicaid beneficiary-to-PCP ratios ranging from 1,000 to 1 in Pennsylvania
to 2,500 to 1 in Tennessee. With regard to appointment waiting times,
some states required plans to set their own standards rather than
establishing a consistent statewide standard.




Page 16                                                          GAO-03-222 Medicaid and SCHIP Access
Table 3: Examples of Specific State Standards for Plan Networks and Appointment Waiting Times

Availability measure         Examples of standards used
Plan network
PCPs                         •   Florida requires physicians to certify that their overall practice does not exceed 3,000 patients.
                             •   Maryland requires each health plan to have enrolled beneficiaries-to-PCP ratios that do not exceed
                                 2,000:1 for adults and PCPs should have no more than 1,500 beneficiaries under age 21. Tennessee
                                 uses a maximum 2,500:1 beneficiaries-to-PCP ratio.
                             •   Ohio’s contracts with health plans specify a required number of PCPs based on the number of
                                 beneficiaries and plans in a county.
Specialists                  •   New York requires each participating plan to have 30 specialties: 14 with specific ratios of enrolled
                                 beneficiaries to specialists and 16 specialties for which health plans must have at least two providers.
                             •   Ohio requires health plans to have a specified number of 6 types of specialists, including dentists,
                                 allergists, and general surgeons, per county or service area.
                             •   Pennsylvania requires health plans to provide beneficiaries with a choice of at least 2 appropriate
                                 specialists within a reasonable geographic distance.
Geographic distribution      •   Ohio requires health plans to ensure that 40 percent of beneficiaries reside within 10 miles of a PCP.
                             •   Texas requires health plans to have a PCP within 30 miles of a beneficiary’s residence and specialty
                                 care within 75 miles.
                             •   Washington requires health plans in urban areas to have two PCPs within 10 miles of 90 percent of
                                 beneficiaries; plans in rural areas must have one PCP within 25 miles of most beneficiaries.
Appointment waiting times
First visit               • California requires that the first visit of newly enrolled beneficiaries be within 120 days.
                          • Michigan requires health plans to set a standard for when new beneficiaries should first visit a PCP.
                          • Pennsylvania requires that health assessments, general physical examinations, or first examinations
                            be scheduled within 3 weeks of enrollment.
Appointment scheduling    • California requires health plans to provide urgent care within 24 hours and to set a standard for
                            routine appointments.
                          • Nevada requires appointments for urgent care within 2 days, and that routine care be scheduled
                            within 2 weeks of request.
                          • New York requires that appointments be scheduled within 24 hours for urgent care, 4 weeks for
                            routine and preventive care, and 4 to 6 weeks for specialist care.
In-office waiting time    • Florida requires that explanations be given to beneficiaries if they must wait more than 30 minutes; if
                            the wait will exceed an hour, the provider is to reschedule the appointment.
                          • Michigan requires health plans to set an in-office waiting time standard.
                          • Pennsylvania requires that beneficiaries wait no more than 20 minutes on average or 1 hour
                            maximum past their scheduled appointment times.

                                             Source: GAO analysis of states’ data, as of December 2001.


                                             Routinely monitoring plan performance, especially with established
                                             network requirements and standards, is critical because providers can—
                                             and do—change their participation in Medicaid managed care, which in
                                             turn can affect beneficiaries’ access to care. In some cases, a state may not
                                             have set a specific network requirement but nonetheless independently
                                             monitors plan performance. States that monitor the extent to which
                                             participating plans’ network providers are actually available to
                                             beneficiaries are better able to systematically identify and respond to
                                             access problems. For example, see the following.




                                             Page 17                                              GAO-03-222 Medicaid and SCHIP Access
•   In 1999, Tennessee reviewed each managed care plan’s contracts with its
    providers and contacted providers directly to independently verify their
    participation with the plan and whether they were open to new Medicaid
    patients. The state found that, for one health plan, only 44 percent of the
    participating PCPs accepted new Medicaid patients; of the remaining 56
    percent of PCPs, 33 percent had Medicaid patients but would not accept
    any new ones, and 23 percent either did not accept any Medicaid patients
    or could not be reached by telephone. Determining that the plan did not
    comply with requirements for PCP availability, the state required the plan
    to add providers who would accept new Medicaid beneficiaries before
    assigning any additional beneficiaries to the plan. State officials also
    reported that they now conduct a regular telephone survey of providers to
    verify the provider data that participating plans submit.
•   Washington has a broad requirement that physician networks be adequate
    to serve enrolled beneficiaries but does not set as many additional specific
    standards as do some other states. The state does, however, require
    participating plans to routinely report which physicians are participating
    in their Medicaid networks and independently verifies plan reports by
    periodically placing test calls to physicians. Washington also compiles the
    physician-level information into a centralized database to review physician
    participation across health plans in order to better ensure that capacity is
    not overstated.

    To monitor plan performance in terms of provider availability to
    beneficiaries, 13 of the 14 states we reviewed routinely obtained periodic
    data from participating plans on the number of physicians in their
    networks, ranging from weekly reports in Maryland to quarterly reports in
    California, Massachusetts, and New York. As a part of this routine data
    collection, 12 states also reviewed the geographic distribution of
    physicians in their networks. Fewer states, however, took additional steps
    to determine, on an ongoing basis, whether the plan-submitted data
    adequately reflected network capacity to serve Medicaid beneficiaries. For
    example, in 9 states the plans’ provider lists identified those physicians
    who were accepting new Medicaid patients, which would help indicate the
    extent to which plan networks were open to new public beneficiaries, and
    7 states independently verified the accuracy of the submitted provider
    lists. Five states analyzed information across the plans’ provider lists to
    help identify the unduplicated number of PCPs available to the Medicaid
    managed care population and to help avoid overstating overall physician
    availability. (See fig. 2.)




    Page 18                                  GAO-03-222 Medicaid and SCHIP Access
Figure 2: Variation in 14 States’ Monitoring of Medicaid Managed Care Plans’
Provider Information

     State                           How frequently Do lists identify          Does the state Does the state
                                         do plans      providers                 verify the    account for
                                     submit provider accepting new               accuracy       providers
                                       lists to the    Medicaid                 of provider    enrolled in
                                          state?       patients?                   lists?     multiple plans?

     California                          Quarterlya                                                      b

     Colorado                                N/Ac                N/A               N/A             N/A

     Florida                               Monthly                                      d               d

     Illinois                              Monthly                                                      b

     Maryland                              Weekly
     Massachusetts                        Quarterly
     Michigan                             Bi-weekly
                                          Bi-weekly                                     d                d
     Nevada
     New York                             Quarterly
                                           Monthly                   e
     Ohio
                                           Monthly                                                       b
     Pennsylvania
                                           Monthly                                                       b
     Tennessee
     Texas                                 Monthly
     Washington                            Monthly
     Total                                    N/A                9                  7               5

         Yes
         No

    N/A Not applicable
    Source: GAO analysis of states’ data, as of December 2001.


a
    In some counties in California, plans are required to update their provider lists semiannually.
b
 The state imposed specific standards regarding the number of PCPs in a health plan’s network (such
as beneficiaries-to-PCP ratios) but did not account for providers that may be enrolled in multiple
plans.
c
 The state plans to reinstitute requirements for health plans to submit provider information quarterly in
the next contract period.
d
 The state requires health plans to limit the total number of patients a physician may have across all
lines of business (for example, private pay, Medicaid, and other types of insurance coverage), but the
state does not monitor compliance with this limit.
e
 The state does not obtain lists from health plans that indicate the number of providers accepting new
patients. Instead, it tracks the number of patients each provider is willing to accept through a health
plan and compares this information to the number of beneficiaries enrolled with a particular physician.
Based on this comparison, the state identifies which physicians should be accepting new patients.


Compared to state monitoring of provider network information, even
fewer states monitored compliance with their requirements for
appointment waiting times. Five of the 14 states with Medicaid managed


Page 19                                                                GAO-03-222 Medicaid and SCHIP Access
                            care—California, Massachusetts, New York, Tennessee, and Washington—
                            routinely collected data or otherwise independently verified health plans’
                            compliance with specific appointment-related standards such as maximum
                            time frames to schedule an initial health assessment (first visit) or routine-
                            care appointment and in-office waiting times. To determine whether
                            beneficiaries newly enrolled in a plan received initial health assessments
                            within 120 days of enrollment, California regularly reviews health plan
                            reports and physician office medical records for a sample of new
                            beneficiaries in each plan. To verify physician compliance with
                            appointment scheduling standards, New York makes random calls to
                            physicians (200 offices per plan service area per year), requesting
                            information on the next available appointment for a specified need, such
                            as routine care, urgent care, or after-hours care. In contrast,
                            Massachusetts directs plans to develop and monitor compliance with their
                            own appointment scheduling requirements, and the state annually reviews
                            and critiques the methodology and results reported by each plan.

                            Absent routine verification or monitoring of plans’ compliance with
                            network and availability requirements, states do not have an adequate
                            assurance that such requirements are having their intended effect on
                            beneficiaries’ access to managed care providers. Officials in one state that
                            did not verify requirements indicated that the standards served as a basis
                            for legal recourse in the event that beneficiaries raised complaints
                            regarding appointment availability. Undertaking additional measures to
                            verify plan compliance, as Tennessee did, can identify more
                            comprehensive network problems that limit access to care for Medicaid
                            beneficiaries and that might otherwise go undetected.


New Regulations May Alter   The new Medicaid managed care regulations, effective August 13, 2002,
States’ Approaches to       and to be fully implemented by August 13, 2003, will likely require some
Monitoring Managed Care     states to alter their approaches to requirements for their participating
                            plans and provider networks. In general, the regulations require that states
                            ensure—through their contracts with managed care plans—that
                            participating plans demonstrate their capacity to serve the needs of their
                            enrollees for any specific standards that states set for access to care.
                            Among other things, the regulations require states to ensure that
                            participating plans

                        •   maintain and monitor their networks of providers to provide adequate and
                            timely access to all services covered under their contracts with the states,
                            including monitoring the numbers of network providers who are not
                            accepting new Medicaid patients;


                            Page 20                                   GAO-03-222 Medicaid and SCHIP Access
                        •   ensure that network providers offer hours of operation that are no less
                            than the hours offered to commercial enrollees or comparable to those of
                            Medicaid FFS;
                        •   make services included in the contract available 24 hours a day, 7 days a
                            week, when medically necessary; and
                        •   establish mechanisms to ensure compliance by providers with state
                            standards for access to care.

                            The regulations require states to certify to CMS—at the time the state
                            enters into a contract with a plan or when there are significant changes
                            that would affect the ability of plans to provide adequate capacity or
                            services—that plans have complied with state requirements for the
                            availability of services covered by managed care contracts. To the extent
                            that states have not made specifications regarding health plan physician
                            network capacity or assurances of access to care, states may need to
                            revise their contracts with plans to comply with this new requirement.
                            States that verify or monitor participating plans’ actual compliance with
                            the terms of their contracts will likely have greater direct and routine
                            information on whether the access-related requirements they have set out
                            for participating plans are achieving their intended benefit for covered
                            beneficiaries.


Routine Monitoring of       Determining the extent to which Medicaid beneficiaries are utilizing—and
Service Utilization Often   are satisfied with—covered program services is an important test of the
Handicapped by Poor Data    effectiveness of any state requirements for managed care plans’ network
                            capacity and accessibility. To assess beneficiaries’ service utilization and
                            satisfaction, the states we reviewed generally required participating plans
                            to routinely provide data from two key sources: encounter data, which are
                            individual-level data on service use, and HEDIS, which provides
                            comparative information across participating plans for designated service
                            measures. Most states also administered CAHPS, which is a standardized
                            beneficiary satisfaction survey. However, for the majority of states we
                            reviewed, the utility of these data for routine monitoring was often
                            handicapped because of the frequent failure of plans to submit reliable
                            encounter data and the exclusion of significant shares of beneficiaries
                            from the HEDIS and CAHPS data. CAHPS survey results were further
                            limited by poor response rates in most states. A few states reported
                            making sufficient progress in their efforts to improve the quality of their
                            encounter data that they could use them to routinely analyze service
                            utilization in their Medicaid managed care programs. In addition to these
                            routine data sources, a few states reported conducting occasional special




                            Page 21                                  GAO-03-222 Medicaid and SCHIP Access
                 studies that enabled them to identify and focus on access issues pertaining
                 to beneficiaries’ use of services or satisfaction with services received.

Encounter Data   Encounter data are intended to capture information on beneficiaries’ use
                 of primary and preventive care as well as other services, such as
                 emergency room visits. These data can help states identify patterns of care
                 along several dimensions, such as by type of visit or patient (such as well-
                 child visits by age), by health condition or disorder (such as asthma or
                 diabetes), and by plan. As a condition of their approved federal managed
                 care waivers, states must require Medicaid managed care plans to submit
                 encounter data. But obtaining reliable and useful encounter data has
                 proven to be a difficult undertaking, as we have earlier reported.19
                 According to CMS and several of the states we reviewed, many states
                 continue to struggle with obtaining reliable and complete encounter data.
                 One state we contacted found that the lack of standardized provider
                 coding and formatting procedures resulted in missing and incomplete
                 data. As a result, only 16 percent of the provider identifiers in the
                 submitted encounter data could be matched to the state’s Medicaid
                 provider master file. Another state noted that its encounter data were of
                 limited use because many health plans were unable to obtain complete
                 data from their providers. Two of the 14 states we reviewed reported that
                 obtaining complete encounter data was more problematic for health plans
                 that paid their physicians a monthly capitated payment that is not linked
                 to the delivery of specific services.

                 For states providing Medicaid services through managed care, encounter
                 data often are the basis for states’ responses to federal reporting
                 requirements under Medicaid’s Early and Periodic Screening, Diagnostic
                 and Treatment (EPSDT) services. EPSDT is designed to provide children
                 and adolescents with access to comprehensive, periodic evaluations of
                 health, developmental, and nutritional status, as well as hearing, vision,
                 and dental services.20 The EPSDT annual reports that states must submit to
                 CMS are designed to capture, by age group, information such as the




                 19
                  See U.S. General Accounting Office, Medicaid Managed Care: Challenge of Holding
                 Plans Accountable Requires Greater State Effort, GAO/HEHS-97-86 (Washington, D.C.:
                 May 16, 1997).
                 20
                  Federal law requires that EPSDT include services that are necessary to correct or
                 ameliorate defects and physical and mental illnesses and conditions discovered through
                 screening, regardless of whether those services are covered by the state’s Medicaid plan.




                 Page 22                                           GAO-03-222 Medicaid and SCHIP Access
    number of children who (1) received EPSDT health screenings,21 (2) were
    referred for corrective treatment, (3) received dental treatment or
    preventive services, and (4) were enrolled in managed care plans.
    However, we have previously reported that managed care plans,
    particularly those that pay their participating physicians on a capitated
    basis, often had difficulty collecting and reporting complete and accurate
    EPSDT data.22 Thus, EPSDT reports that are based on encounter data are
    often incomplete or inaccurate, compromising the reliability of states’ data
    on use of these services.

    Despite these widespread problems with encounter data, a few states we
    reviewed noted that the reliability and usefulness of their encounter data
    have improved over time. Maryland, New York, and Michigan, for example,
    reported sufficient progress with improving the quality of their encounter
    data that they are now able to use them to analyze service utilization in
    their Medicaid managed care programs, as indicated below.

•   Maryland officials noted that after spending several years developing and
    refining its system for obtaining encounter data, the state is now able to
    use them as the basis to make risk-adjusted payments to plans and to
    routinely assess Medicaid managed care beneficiaries’ utilization of well-
    child, ambulatory, and emergency room visits. The state publicly reports
    performance information by health plan, creating a strong incentive for
    health plans to ensure that all encounters are reported. To ensure that the
    reported encounter data accurately portray services delivered, the state
    conducts validation studies on the data submitted by health plans. The
    state also reviews the distribution and frequency of diagnoses reported
    through the encounter data over time to monitor whether the mix of
    diagnoses across the population changes.
•   New York established a data warehouse for Medicaid managed care in
    1997. The warehouse includes encounter data submitted by health plans as
    well as data from other providers’ FFS claims for reimbursement for
    services provided to managed care beneficiaries outside of their health




    21
     The components of an EPSDT health screening include a comprehensive health and
    developmental history, a comprehensive unclothed physical exam, appropriate
    immunizations, laboratory tests (including a blood lead-level assessment), and health
    education.
    22
     See U.S. General Accounting Office, Medicaid: Stronger Efforts Needed to Ensure
    Children’s Access to Health Screening Services, GAO-01-749 (Washington, D.C.: July 13,
    2001).




    Page 23                                          GAO-03-222 Medicaid and SCHIP Access
            plan. A variety of reports on utilization and access data are generated and
            shared with plans on a restricted access web site.
        •   Michigan is developing a data warehouse that will combine managed care
            encounter data with FFS claims and public health data, such as vital
            statistics and immunization records, into a single information system that
            it will use to analyze beneficiaries’ service utilization. The data warehouse
            will also be able to create utilization profiles by managed care plan. The
            state has begun testing the data warehouse that is expected to be
            operational within the next year.

HEDIS       HEDIS is a set of standardized performance measures that helps
            purchasers and consumers compare the performance of managed health
            care plans.23 HEDIS performance measures are organized into eight
            categories, four of which include measures directly related to beneficiary
            service utilization.24 The Medicaid version of HEDIS includes various
            access-related measures that attempt to capture beneficiaries’ use, often
            by age, of various preventive and other services from specified providers,
            as illustrated in table 4. (See app. I for a more detailed list of Medicaid
            HEDIS measures related to service utilization.)




            23
              NCQA, an independent foundation, has managed HEDIS since 1992. Originally designed
            for private employers as purchasers of health care, it has been adapted for public
            purchasers, regulators, and consumers, including Medicaid.
            24
             The four general HEDIS categories that directly relate to service utilization are
            effectiveness of care, access/availability of care, use of services, and satisfaction with the
            experience of care. The remaining four general categories are health plan stability, cost of
            care, informed health care choices, and health plan descriptive information.




            Page 24                                             GAO-03-222 Medicaid and SCHIP Access
Table 4: Examples of Medicaid HEDIS Measures Related to Service Utilization for Children

General HEDIS
category               Specific HEDIS measure      Description
Effectiveness of       Childhood immunization      The percentage of enrolled children who turned 2 years old during the
care                   status                      measurement year, who were continuously enrolled for 12 months preceding their
                                                   second birthdays and who were identified as having the recommended number of
                                                   specific immunizations by their second birthdays.
                       Adolescent immunization     The percentage of enrolled adolescents who turned 13 during the measurement
                       status                      year, who were continuously enrolled for 12 months immediately preceding their
                                                   13th birthdays and who were identified as having had the recommended number of
                                                   specific immunizations by their 13th birthdays.
                       Use of appropriate          Whether members with persistent asthma are being prescribed medications
                       medications for people      acceptable as primary therapy for long-term control of asthma.
                       with asthma
Access/ availability   Children’s access to PCPs The percentage of enrolled members age 12 months through 24 months, 25
of care                                              months through 6 years, and 7 years through 11 years who had a visit with a
                                                     network PCP.
                       Annual dental visit           The percentage of enrolled members age 4 through 21 who were continuously
                                                     enrolled during the measurement year and who had at least one dental visit during
                                                     the measurement year (when dental services are a covered benefit under
                                                     Medicaid).
Use of services        Well-child visits in years 3, The percentage of members who were 3, 4, 5, or 6 years old during the
                       4, 5, and 6 of life           measurement year, who were continuously enrolled during the measurement year,
                                                     and who received one or more well-child visits with a primary care practitioner
                                                     during the measurement year.
                       Adolescent well-care visits The percentage of enrolled members who were age 12 through 21 years during the
                                                     measurement year, who were continuously enrolled during the measurement year,
                                                     and who had at least one comprehensive well-care visit with a PCP or an
                                                     obstetrician/gynecologist practitioner during the measurement year.

                                             Source: NCQA, HEDIS 2000: Technical Specifications (Washington, D.C.: 1999).


                                             Twelve of the 14 states we reviewed used HEDIS measures to help assess
                                             Medicaid beneficiaries’ utilization of services. Eleven states required
                                             participating plans to submit HEDIS performance results, while 1 state—
                                             Ohio—conducted its own HEDIS analysis using encounter data submitted
                                             by plans.25 Some states used the full set of HEDIS measures, while others
                                             used selected measures corresponding to areas of interest.

                                             Despite the potential of HEDIS to provide valuable information regarding
                                             beneficiaries’ use of managed care services, its narrow focus in identifying
                                             beneficiaries to be included in the assessments often limits the ability to
                                             generalize results to all beneficiaries within a plan or within a state. Many
                                             HEDIS measures require beneficiaries to have 12 months of continuous


                                             25
                                              Tennessee and Texas did not use HEDIS to assess plan performance.




                                             Page 25                                             GAO-03-222 Medicaid and SCHIP Access
enrollment in a single managed care plan in the assessment year in order
to be included in the measures.26 As a measurement criterion, the
continuous enrollment requirement is intended to ensure that
comparisons of performance across health plans are made on the basis of
sample populations that have been enrolled for similar periods of time.
However, because beneficiaries’ average length of time in the Medicaid
program can be less than 12 months—ranging from 6 to 9 months in three
states—this 12-month enrollment requirement excluded at least one
quarter of Medicaid beneficiaries from most of the states we reviewed and
more than half in four states, as shown in table 5.27 Consequently, HEDIS
measures may not provide a representative measure of service utilization
for a significant share of children covered by Medicaid managed care.
Another limitation of the HEDIS measures is that they are often based on
encounter data and are thus subject to the reliability concerns previously
raised.




26
  Although some HEDIS measures have a 12-month continuous enrollment requirement,
individuals with one gap in enrollment of up to 45 days or less can be included in the
sample. However, to be included, individuals must remain with the same health plan after a
break in enrollment.
27
  According to one report, at least one state—Iowa—analyzed HEDIS measures for
individuals that were continuously enrolled in Medicaid for less than 12 months. See
NCQA, Medicaid HMO and Fee-For-Service Comparison Strategy: Methodological Issues
(Washington, D.C.: NCQA, n.d.).
http://www.ncqa.org/Programs/qsg/medicaidcomparison.html (downloaded July 8, 2002).




Page 26                                          GAO-03-222 Medicaid and SCHIP Access
        Table 5: Estimated Percentage of Medicaid Children Excluded from HEDIS
                  a                                                                                          b
            State                                                  Percentage excluded from HEDIS
            Colorado                                                                           79
            Ohio                                                                               75
            Washington                                                                         52
            Florida                                                                            51
            New York                                                                           40
            Michigan                                                                           33
            Maryland                                                                           32
            Pennsylvania                                                                       31
            Massachusetts                                                                      29
            California                                                                         26
            Illinois                                                                           24
                                                                                                             c
            Nevada
                                                                                                             d
            Tennessee
                                                                                                             d
            Texas

        Source: GAO analysis of states’ data, as of December 2001.
        a
        States were asked for enrollment information for the most recent year for which data were available,
        which was generally 2001.
        b
         Percentages represent the portion of the population excluded from the required sample for some of
        the HEDIS measures because they were enrolled for less than 12 months.
        c
            State could not provide exclusion data.
        d
            State does not use HEDIS data.


        Several states we reviewed provided examples of how they used the
        HEDIS data they received from participating plans. These included using
        the information to compare each plan’s performance against national
        Medicaid averages for selected measures and developing report cards to
        compare results across plans. Given issues we identified with the
        completeness of the data, however, such uses and comparisons may not
        be reliable indicators of beneficiaries’ use of services and may render a
        false impression of beneficiaries’ actual experience in service utilization.

CAHPS   State Medicaid managed care programs are required to have an internal
        quality assurance system, which can involve administering beneficiary
        satisfaction surveys.28 Thirteen of the 14 states we reviewed reported using
        CAHPS to assess beneficiaries’ experiences with their Medicaid managed



        28
            42 C.F.R. § 434.34.




        Page 27                                                GAO-03-222 Medicaid and SCHIP Access
                                        care plans.29 CAHPS is a standardized survey designed to compare the
                                        performance of managed care plans on the basis of beneficiaries’
                                        perceptions regarding the care they received through their plans.30 The
                                        CAHPS survey covers a range of topics related to service utilization,
                                        including appointment scheduling, waiting time in a physician’s office, and
                                        the use of specialty services, as shown in table 6.

Table 6: Examples of Beneficiary Satisfaction Questions for Children Covered by CAHPS

Measure                             Question
First visit                         • Did you get an appointment for your child’s first visit to a doctor or other health care
                                      provider for a checkup, or for shots or drops, as soon as you wanted?
Appointment scheduling              • In the last 6 months, how often did your child get an appointment for regular or routine
                                      health care as soon as you wanted?
                                    • In the last 6 months, when your child needed care right away for an illness or injury, how
                                      often did your child get care as soon as you wanted?
Ambulatory care                     • In the last 6 months (not counting times your child went to an emergency room), how
                                      many times did your child go to a doctor’s office or clinic?
In-office waiting time              • In the last 6 months, how often did your child wait in the doctor’s office or clinic more than
                                      15 minutes past the appointment time to see the person your child went to see?
Referral to specialist              • In the last 6 months, how much of a problem, if any, was it to get a referral to a specialist
                                      that your child needed to see?

                                        Source: CAHPS 2.0, Child Medicaid Managed Care Questionnaire and Child Supplemental
                                        Questions, (Rockville, Md.: AHRQ, 1998).


                                        Like HEDIS, however, information from CAHPS is only gathered from a
                                        subset of beneficiaries. CAHPS has a 6-month continuous enrollment
                                        requirement for Medicaid beneficiaries to be included in the survey
                                        sample. While this is a shorter minimum enrollment period than for
                                        HEDIS, it still resulted in excluding about one quarter or more of covered
                                        beneficiaries in five states we reviewed, and nearly half or more in two
                                        states, as shown in table 7. Moreover, several states using CAHPS reported
                                        that they had low response rates from the sampled population; in some
                                        cases, surveys targeted only those beneficiaries with telephones, a




                                        29
                                         Tennessee opted to use a state-designed beneficiary satisfaction survey rather than
                                        CAHPS. In most cases, the states we reviewed administered CAHPS directly or through the
                                        use of an independent contractor. Three states—Colorado, Illinois, and Pennsylvania—
                                        required participating plans to administer CAHPS.
                                        30
                                         CAHPS was developed in 1995 by the federal AHRQ to provide information to help
                                        beneficiaries compare health plans.




                                        Page 28                                            GAO-03-222 Medicaid and SCHIP Access
practice that has the potential to bias the results for beneficiaries who
could not be reached by that method.31

Table 7: Estimated Percentage of Medicaid Children Excluded from CAHPS
          a                                                                                          b
    State                                                  Percentage excluded from CAHPS
    Colorado                                                                            61
    Ohio                                                                                49
    Texas                                                                               31
    Florida                                                                             30
    Washington                                                                          24
    Michigan                                                                            17
    Maryland                                                                            16
    Massachusetts                                                                       15
    New York                                                                            15
    Pennsylvania                                                                        13
    California                                                                          11
    Illinois                                                                            10
                                                                                                     c
    Nevada
                                                                                                     d
    Tennessee

Source: GAO analysis of states’ data, as of December 2001.
a
States were asked for enrollment information for the most recent year for which data were available,
which was generally 2001.
b
 Percentages represent the portion of the population excluded from CAHPS because this group was
enrolled for less than 6 months.
c
    State could not provide data.
d
 Tennessee does not use CAHPS, although it does conduct a state-designed survey of a sample of
all state residents about insurance coverage and satisfaction with services, including access to care.


Gauging beneficiary satisfaction with services solely through a satisfaction
survey is an inherently difficult process, especially when a sample is not
representative or response rates are low. To augment information on
beneficiary satisfaction, states also had available the results of their
complaints and grievances processes, which they are required to have as a
condition of their managed care programs. Nearly all of the states we
reviewed with Medicaid managed care operated a central hotline or
complaint number, where beneficiaries could obtain program information



31
  Among the nine states in our sample that reported their response rates, the response rates
for the CAHPS survey of families with children ranged from 27 percent in Nevada to 85
percent in Illinois.




Page 29                                                 GAO-03-222 Medicaid and SCHIP Access
                  or request assistance locating providers in addition to filing complaints.
                  The states we reviewed generally focused on ensuring that complaints and
                  questions raised by beneficiaries’ calls were addressed. For example, five
                  states—Ohio, Maryland, Michigan, New York and Washington—had
                  information databases that tracked complaints from their inception to
                  their resolution. New York, Ohio, and Washington complaint reports were
                  also analyzed by managed care plan, which allowed officials to identify
                  any trends in beneficiary complaints.

                  As a tool to assess overall problems with access to care, records of
                  complaints and grievances had several limitations. In some cases, states’
                  hotline or complaint data did not distinguish between requests for
                  assistance and complaints about provider services, thus making it difficult
                  to assess the extent of any systemic access problems. In addition, a small
                  number of complaints could be difficult to interpret at face value; while
                  few complaints or grievances could indicate overall satisfaction with care,
                  it could also indicate a general lack of knowledge about or ability to file a
                  formal complaint or grievance. A small number of complaints also could
                  limit the state’s ability to identify any specific trends of systemic problems
                  with access to care with a specific plan or within a state’s Medicaid
                  managed care program as a whole.

Special Studies   A few states we contacted reported that they occasionally conducted
                  special studies, in addition to any routine monitoring they did, to assess
                  service utilization issues for their Medicaid beneficiaries. For example,
                  Maryland’s 4-year evaluation of its Medicaid managed care program,
                  published in January 2002, concluded that providers and consumers felt
                  that PCP networks were “under stress” in certain areas of the state, with a
                  notable lack of physicians in rural areas of the state.32 The evaluation also
                  identified significant inaccuracies with plan-submitted data on physician
                  providers, including duplicate provider entries, incorrect provider
                  affiliation status with participating plans, and missing information. As a
                  result, the state took steps to develop and implement more rigorous
                  methods of monitoring plan-submitted data. In particular, the state now
                  monitors plans’ PCP networks, including verification calls to samples of
                  physicians, so that PCP shortage areas can be identified and addressed. In
                  the future, the state also plans to develop more specific standards for




                  32
                   Maryland Department of Health and Mental Hygiene, HealthChoice Evaluation, Final
                  Report and Recommendations (Washington, D.C.: Jan. 15, 2002).




                  Page 30                                       GAO-03-222 Medicaid and SCHIP Access
                             commonly used specialists and monitor plans’ compliance with these
                             standards.

                             In 2001, Washington conducted a survey of new Medicaid managed care
                             beneficiaries in 14 counties as a result of concerns raised by beneficiary
                             advocates in light of managed care plans’ withdrawal from program
                             participation. The study examined these beneficiaries’ experiences with
                             accessing medical care, including emergency room use. The study found
                             that 90 percent of new beneficiaries reported having a PCP after
                             enrollment in Medicaid, compared to 62 percent having a PCP before
                             enrollment in Medicaid managed care. Additionally, there were no
                             significant differences between the experiences of managed care and FFS
                             beneficiaries who had obtained medical, specialist, or emergency room
                             care. However, the study did find that the majority of beneficiaries were
                             unfamiliar with several key processes concerning their managed care
                             plans, such as how to change PCPs within a health plan, contact their
                             health plans when questions or problems arose, and make complaints.
                             Based on these findings, the state plans to work with managed care plans
                             to improve beneficiaries’ awareness regarding PCP selection and
                             communication with their health plans.


States Attempted to          The managed care industry—in the commercial as well as public sectors—
Minimize Impact of           has experienced considerable changes in recent years following periods of
Managed Care Plan            rapid entry of multiple managed care plans in certain markets and
                             subsequent retrenchment based on plans’ willingness or ability to compete
Withdrawals on Access to     in those markets. Many communities and states have experienced changes
Care, but Effect on          in the number of managed care plans as a result of numerous health plan
Beneficiaries Is Uncertain   mergers, acquisitions, and closures as the managed care industry has
                             evolved and matured. State Medicaid programs have often been affected
                             by the withdrawal of some managed care plans from their programs; in
                             some cases, states have intentionally acted to reduce the number of
                             participating plans. The four states we visited—Massachusetts, Ohio,
                             Tennessee, and Texas—had experienced such changes to varying degrees.
                             These states had taken various measures to help minimize any adverse
                             effects on beneficiaries’ access to care due to participating plans leaving
                             the Medicaid program. It is not clear, however, to what extent these states’
                             efforts had been successful in helping beneficiaries transition smoothly to
                             new health plans and physicians and thus avoid problems with access to
                             care.




                             Page 31                                  GAO-03-222 Medicaid and SCHIP Access
The potential amount of disruption that occurs when a health plan
withdraws from a state or community can vary considerably, depending on
a number of circumstances. Health plan mergers can result in minimal
changes for beneficiaries if they are able to maintain established
relationships with their providers and can even strengthen the network of
available providers within a plan. In Massachusetts, for example, a merger
between two health plans in the early 1990s was considered by state
officials to have increased physician availability for Medicaid beneficiaries
enrolled in managed care. Officials in Massachusetts also noted that
reductions in the number of health plans ensured that participating plans
have enough enrolled beneficiaries to spread the costs and risks
associated with capitation payments. In other cases, however, the extent
of disruption may be more severe, particularly when large numbers of
beneficiaries are affected and a significant number of plans struggle to
remain financially viable.

Each of the four states we visited experienced varying levels of health plan
withdrawals from their Medicaid managed care programs. Plan
withdrawals over several years have affected almost 50 percent of
beneficiaries in Tennessee and over 15 percent in Ohio, raising concerns
about the accessibility of care to beneficiaries in these states. The
magnitude of health plan withdrawals in Tennessee necessitated state
efforts to recruit additional plans, at least one of which was later found by
the state to have deficiencies related to failure to pay physicians
accurately and promptly. In Ohio, at least one health plan that withdrew
from the state program also failed to pay some of its network providers for
services already rendered. In such cases, delayed reimbursement by
managed care plans can seriously jeopardize providers’ willingness to
continue participating in the Medicaid program and provide services to
eligible beneficiaries. In contrast to Tennessee and Ohio, plan withdrawals
in Massachusetts and Texas have affected a smaller share of beneficiaries.
Massachusetts estimated that about 4 percent of its beneficiaries were
affected by an early period of plan fluctuation as the state was
implementing its mandatory managed care program; since 2000, however,
the program has been stable with the same four managed care plans
participating. In Texas, approximately 1 percent of beneficiaries have been
affected by withdrawals of participating plans since the state implemented
managed care in 1996.

To avoid disruptions in care for beneficiaries when plans ceased their
participation in the Medicaid program, these states had implemented
various procedures to help smooth beneficiaries’ transition to other plans
or providers. For example, in cases where a withdrawing health plan


Page 32                                   GAO-03-222 Medicaid and SCHIP Access
                        intended to sell its membership to another plan, Ohio first compares the
                        provider network of the withdrawing plan with the health plan that is
                        purchasing the membership. The state does not approve the sale of
                        membership unless most of the providers participating in the withdrawing
                        plan also participate in the purchasing plan. In other cases, a state’s
                        contract with its managed care plans required certain actions. Ohio’s
                        contract, for example, requires a minimum of 75 days advance notice of a
                        plan’s intention to terminate its participation in the program and includes
                        provisions to collect a monetary assurance from the withdrawing plan or
                        to withhold payments until all contractual requirements are completed,
                        including required payments to network providers. Ohio and Texas
                        provided examples of efforts to inform beneficiaries directly affected by a
                        plan’s withdrawal about options available to them to continue care, such
                        as information on other participating plans and how to choose another
                        plan. These four states indicated that they believed their efforts to respond
                        to changes in managed care participation were sufficient to minimize
                        disruption to care for Medicaid-eligible beneficiaries. However, the extent
                        to which the states’ efforts adequately ensured beneficiaries’ access to
                        continuous care was uncertain. Appendix II provides more detail on
                        managed care plan withdrawals in these four states.


                        For states’ FFS-based Medicaid delivery systems, which continue to serve
For Medicaid FFS,       the majority of children in half of the states we reviewed, requirements for
State Requirements      participating providers and monitoring of provider availability were
                        significantly more limited than for managed care. State analysis of service
for Providers and       utilization data to assess the frequency and patterns of care that
Monitoring of Service   beneficiaries received was also more limited, despite the ready availability
                        of such data through states’ claims payment systems. For traditional FFS
Utilization Were More   programs, beneficiaries may seek care from any providers participating in
Limited                 the Medicaid program and may change providers at any time if they are
                        dissatisfied. However, Medicaid beneficiaries’ ability to easily change
                        providers is dependent on the number, type, and location of providers
                        willing to take new Medicaid patients, which in turn is strongly influenced
                        by Medicaid payment rates and associated administrative processes. We
                        found that Medicaid FFS payment rates were significantly lower than rates
                        for comparable Medicare services in the majority of states we reviewed,
                        which can discourage provider participation and thus restrict
                        beneficiaries’ access to a broad supply of providers. States that used
                        PCCM programs as part of their FFS service delivery systems were
                        somewhat more prone to set certain requirements for participating
                        PCCMs, such as a maximum number of assigned beneficiaries and their
                        geographic proximity to beneficiaries, than were states with traditional


                        Page 33                                   GAO-03-222 Medicaid and SCHIP Access
                             FFS systems. States with FFS programs generally did not set requirements
                             for specialists or for physicians’ appointments, such as maximum waiting
                             times to schedule an appointment, as they did for their managed care
                             plans. States were more likely to conduct beneficiary satisfaction surveys
                             for their PCCM programs than for their traditional FFS systems; the survey
                             results, however, had the same constraints as previously discussed for
                             managed care due to the limited share of beneficiaries participating in the
                             surveys and low response rates.


Low FFS Payment Rates        States are required to ensure that their Medicaid service delivery and
Can Reduce Provider          payment systems will afford beneficiaries access to services similar to
Participation and Restrict   those provided to the state’s general population. To do this, states
                             determine which providers may enroll in the Medicaid program to provide
Access to Care               services, set payment rates for covered services, and pay claims that
                             providers submit for the services they provide. In several of the states we
                             reviewed with Medicaid FFS programs, program officials said that
                             provider survey information and beneficiary complaint data suggested that
                             low payment rates, slow payment, and other administrative issues
                             deterred physicians in primary care or in some specialties from
                             participating in the program. As we reported earlier, if payment rates
                             decline to the point that they cause physicians to leave Medicaid or to
                             reduce the number of beneficiaries they serve, then beneficiary access
                             may be restricted.33

                             Our analysis of payment rates indicated that Medicaid FFS payments to
                             physicians for primary and preventive services for children were often
                             significantly lower than what Medicare paid for comparable services in
                             many of the states we reviewed. For the 13 states that paid physicians on a
                             FFS basis for Medicaid-eligible children, payment rates ranged from 32
                             percent to 89 percent of Medicare rates. Nine of these states’ Medicaid
                             rates were two-thirds or less of Medicare rates for comparable services.
                             (See app. III for more detail.) Officials in many of these states said that
                             Medicaid rates were also below those of commercial payers, although they
                             generally had not conducted systematic studies to document these
                             differences.




                             33
                              See U.S. General Accounting Office, Medicaid and SCHIP: States’ Enrollment and
                             Payment Policies Can Affect Children’s Access to Care, GAO-01-883 (Washington, D.C.:
                             Sept. 10, 2001).




                             Page 34                                        GAO-03-222 Medicaid and SCHIP Access
Most Traditional FFS       Despite the potential for low FFS rates to limit the number of providers
Programs Set Few Goals     willing to participate in the program, the nine states we reviewed with
Regarding the Number of    traditional FFS programs did not set specific goals for the number of
                           physicians participating in their Medicaid programs and did not actively
Providers, and Conducted   monitor the number and location of providers.34 While states had lists of
Minimal Monitoring of      physicians who were enrolled as Medicaid providers and who submitted
Service Utilization        claims for services provided, in most cases these lists were not frequently
                           or comprehensively updated and thus did not provide an accurate count of
                           actively participating physicians. Some states’ Medicaid physician
                           databases included physicians who had not provided services to Medicaid
                           patients for years. In one state, the database doublecounted providers who
                           had more than one service location or billing identifier. In addition,
                           although states have claims data that serve as the basis for paying
                           providers for services rendered, only some analyzed this information to
                           identify PCPs, specialists, or other providers who were actively treating
                           Medicaid beneficiaries. Even when they did, states often defined “active”
                           providers to include those who submitted a single claim during the past
                           year. With respect to appointments, such as maximum waiting times to
                           schedule a routine or urgent appointment, none of the states we reviewed
                           with traditional FFS programs had specific standards comparable to those
                           we saw for managed care programs.

                           States also did little to monitor service utilization by Medicaid
                           beneficiaries participating in traditional FFS care despite having a ready
                           source of data in their claims payment systems. Claims data contain the
                           type and frequency of services Medicaid beneficiaries have received and
                           the type of provider delivering the care, which can be used to analyze
                           service utilization. States did report using claims data to develop
                           utilization statistics to meet federal requirements for annual reporting on
                           EPSDT services for children. However, we have reported earlier that state
                           EPSDT reports are often incomplete and unreliable, thus compromising
                           their utility in assessing whether children are receiving required services.35
                           Beyond EPSDT, only one state with a Medicaid traditional FFS system
                           reported analyzing claims data to evaluate access to care on primary and



                           34
                             These nine states were California, Colorado, Illinois, Louisiana, Nevada, New York, Ohio,
                           Texas, and Washington. The share of Medicaid-eligible children participating in these
                           states’ traditional FFS programs ranged from a low of about 30 percent in California and
                           Colorado to about 90 percent in Illinois and Louisiana. (See table 2 for more detail by
                           state.)
                           35
                            GAO-01-749.




                           Page 35                                           GAO-03-222 Medicaid and SCHIP Access
                             preventive services, such as annual well-child and dental visits.36 Rather
                             than evaluate access to primary care, at least three states used claims data
                             to assess inappropriate utilization of higher-cost services, such as
                             emergency room care. For example, Texas collects and analyzes
                             information on beneficiaries who potentially overuse care—defined as
                             those at or above the 90th percentile of use for particular services,
                             including physician, emergency room, and pharmacy services. Patients
                             suspected of misusing services may be restricted to using a specific
                             physician or pharmacy, with the goal of reducing their use of services to a
                             more appropriate level.

                             Four of the nine states with traditional FFS systems reported periodically
                             using beneficiary satisfaction surveys, such as CAHPS, to help assess
                             issues regarding access to care. These states were Colorado, Illinois, Ohio,
                             and Washington. As with Medicaid managed care, however, the utility of
                             these surveys is diminished when there are low response rates and a lack
                             of beneficiary representation in the sample selection. In one state, the
                             survey sample was limited to individuals who had received at least one
                             service in the prior 6 months, thus excluding individuals who may have
                             tried but failed to obtain services. Another state reporting a low
                             beneficiary response rate found that while the cooperation rate was high
                             among those who were reached, many potential respondents in the survey
                             sample could not be contacted because of address or telephone number
                             changes.


PCCM Programs Had            States’ PCCM programs are a hybrid of FFS and managed care service
Some Requirements for        delivery approaches. They emulate FFS programs in the sense that the
Providers, but Monitoring    state has a direct relationship with providers who are enrolled to
                             participate in the program and paid retrospectively for services actually
of Service Utilization Was   delivered. PCCM programs share characteristics of managed care in the
Limited                      sense that beneficiaries are assigned to a PCCM—a physician, or a
                             practice or other entity—that is responsible for coordinating their care as
                             a case manager. The seven states we reviewed with PCCM programs had
                             more requirements for participating PCCMs than they did for providers in
                             traditional FFS programs, but fewer than PCPs in managed care




                             36
                               Since 1995, Ohio has used HEDIS primary care access measures for beneficiaries in its
                             traditional FFS program.




                             Page 36                                          GAO-03-222 Medicaid and SCHIP Access
programs.37 Similar trends were evident in terms of states’ routine
monitoring of PCCM availability and beneficiaries’ service utilization:
more than FFS, less than managed care.

The states we reviewed with Medicaid PCCM programs most often set
requirements for the maximum number of beneficiaries that a PCCM could
serve and the geographic proximity of PCCMs to their enrolled
beneficiaries. None set limits on the number of beneficiaries a specialist
could serve, and few set specific standards for appointment waiting times
with their PCCMs; overall, PCCM programs had fewer standards than
those imposed under managed care, as shown in figure 3.

Figure 3: Selected Requirements for Medicaid PCCM Providers in Seven States

     State                    Number and location of providers                  Appointment waiting times
                              PCCMs          Specialists Geographic           First    Appointment In-office
                                                         distribution         visit     scheduling waiting time
     Arkansas
     Colorado                                                                                   a

     Florida                                          a              a                          a            a

     Louisiana                                                                                         b

     Massachusetts                                                   a             b            a

     Pennsylvania                                     a                            a            a            a

     Texas                                                                                                   b

     Total                        5               0              5             2        d   3          d 2
        Yes
        No
    Source: GAO analysis of states’ data, as of December 2001.


a
This type of standard exists in this state’s managed care program but not its PCCM program.
b
This type of standard exists in the state’s PCCM program, but not its managed care program.




37
  The seven states we reviewed with PCCM programs were Arkansas, Colorado, Florida,
Louisiana, Massachusetts, Pennsylvania, and Texas. Arkansas and Louisiana do not have
Medicaid managed care programs other than PCCM, whereas the other five states do. The
share of Medicaid-eligible children participating in the seven states’ PCCM programs
ranged from a low of 12 percent in Louisiana to a high of 100 percent in Arkansas. (See
table 2 for more detail.)




Page 37                                                                  GAO-03-222 Medicaid and SCHIP Access
States’ PCCM capacity requirements were most often based on setting a
maximum number of beneficiaries that a PCCM or practice could serve,
ranging from 1,000 beneficiaries per PCCM in Arkansas and Pennsylvania
to 1,500 in Florida and Massachusetts. Louisiana set a limit of 1,200
beneficiaries per PCCM, or 4,800 for a group practice, and allowed an
additional 300 beneficiaries to be enrolled for each nurse practitioner.
With regard to geographic requirements, all five of the PCCM programs
that had requirements for this standard specified a basic maximum of 30
minutes or 30 miles for beneficiaries to reach their PCCMs. Four of these
states set a higher maximum for rural areas—such as 50 miles in Colorado
or 60 minutes in Pennsylvania—or allowed general exceptions to the 30-
minute standard for beneficiaries living in some rural areas.

States typically monitored provider participation in their PCCM programs
by compiling weekly or monthly lists of participating PCCMs and the
number of beneficiaries each PCCM was assigned, which could serve as
the basis for paying the monthly PCCM fee. Monitoring these relative
numbers also allowed states to ascertain whether PCCMs could be
assigned additional beneficiaries. States therefore had current information
on those providers actively participating as PCCMs and the numbers of
assigned beneficiaries. This information alone, however, would not yield
insights into how easily beneficiaries could see their PCCMs.

When states had both managed care and PCCM delivery systems, they less
frequently set requirements for PCCM appointment waiting times than
they did for managed care.38 Three states that operated both PCCM and
managed care programs—Colorado, Florida, and Pennsylvania—did not
set any appointment waiting time standards for PCCMs as they did for
managed care. In contrast, Massachusetts required its PCCMs to see new
patients within a specific time frame in its PCCM program, but not in
managed care. Of the four states that did set specific requirements for
appointment waiting times, only Texas reported conducting routine
monitoring to assess PCCM compliance with those requirements. Texas
officials reported conducting audits of a random sample of 20 PCCMs per
quarter per service area to evaluate compliance with respect to
appointment scheduling and in-office waiting time.




38
 Some states’ contracts with PCCMs may include a general requirement that PCCMs
provide care on a “timely basis.”




Page 38                                       GAO-03-222 Medicaid and SCHIP Access
    To monitor service utilization within their PCCM programs, states most
    often relied on analyses of their FFS claims data. Six of the seven states
    with PCCM programs provided PCCMs that had a certain minimum
    number of assigned beneficiaries with periodic data profiles that compare
    service utilization patterns in their Medicaid practices with those of the
    overall program or other PCCMs.39 These data profiles often focused on
    high-cost services or those at risk of overutilization, such as inpatient
    hospitalization or emergency room use. Three states also included
    information related to primary and preventive services use. For example,
    see the following.

•   Massachusetts provided PCCM practices that had 200 or more enrolled
    beneficiaries with practice-specific and comparative information about the
    percentage of children who received a recommended number of well-child
    visits, by age group. The state further identified, for each practice,
    individual patients who had not received the recommended number of
    well-child visits. State program staff members met with each provider
    twice annually to discuss approaches to address problems identified in
    these data that may indicate limited access.
•   Texas provided participating PCCMs with comparative information on
    selected services per beneficiary, including EPSDT visits, family planning,
    and immunizations.

    In contrast, states typically did not monitor the utilization of services
    provided by specialists, although several state PCCM programs required
    documentation of PCCM referrals to specialists. Officials in several states
    were aware of problems with access to some types of providers and
    specialists in their PCCM programs, including dentists, dermatologists,
    and pediatric neurosurgeons. In an attempt to address such problems,
    Arkansas conducted a survey of dentists and Florida conducted a survey
    of physicians to identify obstacles to their willingness to accept Medicaid
    patients. While such one-time surveys can provide insightful information
    about problems and potential solutions in a specific period, they do not
    take the place of routine or targeted monitoring that can more
    systematically pinpoint problems for particular specialties, geographic
    areas, or beneficiaries.




    39
      Targeting such profiles and analyses to PCPs with a certain minimum volume of
    beneficiaries allows more meaningful data comparisons with the program and other PCPs
    than would be possible for PCPs with only a few beneficiaries.




    Page 39                                        GAO-03-222 Medicaid and SCHIP Access
                      Each of the states we reviewed with PCCM programs conducted
                      beneficiary satisfaction surveys. In addition, Colorado administers its
                      CAHPS survey to individuals participating in all three of the states’
                      Medicaid service delivery systems—managed care, traditional FFS, and
                      PCCM—in order to help assess experiences of program beneficiaries
                      relative to one another. However, given the shortcomings identified
                      earlier—low response rates and exclusions of certain beneficiaries from
                      sample selection—states could not with confidence generalize the results
                      of these beneficiary surveys to the larger population.


                      States have used the flexibility provided by SCHIP to take varying
Distinct SCHIP        approaches for their service delivery systems for eligible children. Of the
Programs Had Fewer    16 states we reviewed, 9 states chose to serve their SCHIP beneficiaries
                      through programs that were primarily designed as expansions of Medicaid
Network               or modeled on their Medicaid programs in terms of benefits and provider
Requirements and      networks.40 These 9 states used the same health plan contracts for
                      Medicaid and SCHIP managed care, and the same provider lists for both
Less Monitoring of    programs’ FFS-based delivery systems. In these cases, the extent of SCHIP
Service Utilization   monitoring would mirror that of the states’ Medicaid programs. On the
                      other hand, 7 states designed at least part of their SCHIP programs to be
                      distinct from Medicaid. These programs relied almost exclusively on
                      managed care to deliver services. Although most of these states also had
                      significant shares of their Medicaid beneficiaries in managed care, they set
                      significantly fewer provider network requirements for their distinct SCHIP
                      programs than for Medicaid and did less monitoring of providers enrolled
                      in their SCHIP programs and of children’s use of services in SCHIP. In
                      general, few states with distinct SCHIP programs routinely collected and
                      analyzed data to ensure that SCHIP-eligible children were receiving
                      covered services.




                      40
                       These states were Arkansas, Illinois, Louisiana, Maryland, Massachusetts, Nevada, Ohio,
                      Tennessee, and Washington.




                      Page 40                                          GAO-03-222 Medicaid and SCHIP Access
States with SCHIP           The seven states that chose to serve all or most of their SCHIP
Programs Distinct from      beneficiaries through programs that were distinct from Medicaid used
Medicaid Set Few Provider   managed care delivery systems almost exclusively.41 These states were not
                            bound by access-related requirements comparable to those for Medicaid
Requirements                PCCM or managed care programs. As such, they set provider network
                            requirements and monitored service utilization less often in their distinct
                            SCHIP managed care programs than they did in their Medicaid managed
                            care programs. As shown in figure 4, only two of these seven states set
                            specific beneficiary-to-PCP ratios for SCHIP, compared to five states for
                            Medicaid, and no state set specific requirements for specialists, compared
                            to three states for Medicaid. Similarly, only one of the seven states with
                            distinct SCHIP programs set a maximum waiting time for a first
                            appointment with a PCP and none had a requirement for in-office waiting
                            times; in contrast six of these states’ Medicaid managed care programs set
                            specific requirements for one or both of these access measures. Only four
                            of the distinct SCHIP programs in these states set any specific standards
                            for appointment scheduling, compared to all seven of the states’ Medicaid
                            managed care programs.




                            41
                              These states were California, Colorado, Florida, Michigan, New York, Pennsylvania, and
                            Texas. With the exception of Florida, all of the states used managed care delivery systems
                            for all of their SCHIP programs; Florida enrolled a small number of SCHIP children into a
                            PCCM program.




                            Page 41                                           GAO-03-222 Medicaid and SCHIP Access
Figure 4: Comparison of Seven States’ Requirements and Standards for Providers
in Medicaid and SCHIP Managed Care


     State                           Network size and structure                      Appointment waiting times

                                   PCP        Specialists        Geographic     First   Appointment In-office
                                                                 distribution   visit    scheduling waiting time
     California                                                                                                a

     Colorado
     Floridab
     Michiganc
     New York
     Pennsylvania
                                                                                                               a
     Texas
     Number of states
     with standards for             5               3                7           5            7            4
     Medicaid
     Number of states
     with standards for             2               0                6           1            4            0
     SCHIP

        Medicaid managed care provider availability standard
        SCHIP provider availability standard

        No standard for Medicaid or SCHIP
    Source: GAO analysis of states’ data, as of December 2001.


Note: Table does not include Medicaid and SCHIP programs that have only a general requirement
that health plans’ networks be adequate to serve their members.
a
    Although the state did not have a specific standard, it did require plans to monitor this measure.
b
 Florida’s separate SCHIP programs vary by beneficiary age category. The SCHIP column in this
table refers to the program for older children, as the program for children under age 5 is modeled
after Medicaid and thus has the same standards as the Medicaid program.
c
Michigan’s data reflect its arrangement with all participating health plans except for one plan, which
operates under different requirements.


The seven states with distinct SCHIP programs also monitored the
availability of PCPs in plan provider networks less frequently than in
Medicaid. In contrast to Medicaid managed care where nearly all states
monitored providers at least quarterly, just three states required plans to
submit provider lists periodically throughout the year—Colorado, New
York, and Texas. To confirm provider information submitted by plans
participating in SCHIP, only New York systematically contacted physicians




Page 42                                                                  GAO-03-222 Medicaid and SCHIP Access
                          to verify information about whether network PCPs were accepting new
                          SCHIP patients.42 Four states required SCHIP plans to submit physician
                          data annually or every several years during state licensure reviews or for
                          the contract renewal process. Among these, California’s SCHIP program
                          required plans to indicate the number and percentage of PCPs and
                          specialists accepting new patients and also to notify the state when there
                          was a change in the provider network that resulted in disruption of 25 or
                          more beneficiaries.

                          The extent of states’ monitoring of participating plans’ SCHIP provider
                          networks did not appear to be related to whether SCHIP-eligible
                          beneficiaries had access to commercial or noncommercial networks
                          within the plans. Some states—such as New York and Texas—did not
                          know whether SCHIP-eligible beneficiaries had access to the same
                          providers as were participating in plans’ commercial networks. Other
                          states—such as Florida, Michigan, and Pennsylvania—stated that most if
                          not all of their SCHIP populations did have access to the same providers
                          as in the plans’ commercial networks. However, without direct monitoring
                          of PCPs enrolled in SCHIP plan networks, states had little or no direct
                          knowledge of the extent to which PCPs would see SCHIP beneficiaries,
                          including whether enrolled PCPs would accept new SCHIP patients at all
                          or limited their practice to only a small number.


Distinct SCHIP Programs   States with SCHIP programs distinct from Medicaid reported fewer efforts
Monitored Service         to monitor children’s utilization of services than in their Medicaid
Utilization Less than     managed care programs. This held true for their use of encounter data as
                          well as for HEDIS measures and CAHPS beneficiary satisfaction survey
Medicaid                  data.

                          CMS does not require states to collect encounter data from managed care
                          plans participating in SCHIP, as it does in Medicaid managed care. Of the
                          states we reviewed with distinct SCHIP programs, we found that two
                          states—Florida and Texas—were attempting to collect as well as analyze
                          encounter data for SCHIP-eligible children in order to assess the type and
                          frequency of services they received. Florida’s distinct SCHIP program uses
                          encounter data to compare the number of ambulatory visits made by
                          SCHIP beneficiaries to the number of visits that would be expected for



                          42
                           To achieve this purpose, the state contacted a sample of 50 to 200 providers for each plan
                          participating in Medicaid and SCHIP, twice a year.




                          Page 43                                           GAO-03-222 Medicaid and SCHIP Access
                   those children based on their diagnoses.43 Texas’ distinct SCHIP program,
                   which was initiated in 2000, has used encounter data to compare
                   immunization rates by plan with rates in commercial plans.

                   Four of the seven states—California, Michigan, New York, and
                   Pennsylvania—required plans to submit HEDIS data so that the states
                   could assess plans’ performance with respect to access to various
                   preventive and other services.44 Compared to Medicaid, these HEDIS data
                   may be more complete in three of these states—California, Michigan, and
                   Pennsylvania—because they had opted to provide SCHIP-eligible children
                   with continuous eligibility for a 12-month period, thus increasing the
                   likelihood that a more representative share of eligible children and their
                   families would be included in the assessments.

                   Five of the seven states—California, Florida, Michigan, Pennsylvania, and
                   Texas—used CAHPS to assess beneficiaries’ satisfaction with care.
                   Compared to Medicaid, the CAHPS data for four of these states’ SCHIP
                   programs may be more complete than for their Medicaid programs
                   because these states provide continuous eligibility for a 12-month period.


                   We provided a draft of our report for comment to HHS, as well as to
Agency and State   Medicaid and SCHIP officials in the 16 states included in our analysis. We
Comments and Our   received comments from HHS and from 13 states. Three states did not
                   respond with comments.
Evaluation
HHS Comments       With regard to states’ Medicaid managed care programs, HHS highlighted
                   new requirements included in CMS’s June 2002 regulation implementing
                   Medicaid managed care provisions of the Balanced Budget Act of 1997.
                   HHS commented that, among other things, the regulation requires states to
                   develop a quality strategy setting access standards for network adequacy
                   and timeliness of access to care. HHS described this new regulation as
                   also making clear the states’ responsibility to continually monitor plans’
                   compliance with these standards. While many states, including 13 of the 14



                   43
                    Florida’s distinct SCHIP program uses the Ambulatory Care Groups (ACG) Case-Mix
                   Adjustment System to assign beneficiaries to 1 of 53 ACG categories for the purpose of this
                   analysis.
                   44
                    Although these four states used HEDIS in both their separate SCHIP and Medicaid
                   programs, only New York reported comparing the results across the two programs.




                   Page 44                                          GAO-03-222 Medicaid and SCHIP Access
states we reviewed with Medicaid managed care delivery systems, were
already subject to certain access requirements as a condition of receiving
waivers of federal Medicaid requirements to operate their managed care
programs, these requirements were not consistent from state to state. This
new regulation, which must be fully implemented by August 13, 2003, has
the potential to bring a more systematic approach to access requirements.
More importantly, its emphasis on state monitoring could better ensure
that such requirements are achieving their intended purposes.

For states’ Medicaid FFS delivery systems, HHS acknowledged the
relationship between reimbursement rates and provider participation,
noting that states can increase payment rates in geographic areas and
specialties where access has been demonstrated to be a problem. Beyond
reimbursement rates, HHS commented that our draft report pointed out a
lack of data to quantify whether there is an access problem in Medicaid
FFS. To the contrary, our report indicates that despite a ready source of
information—claims data—for evaluating access to care in a FFS
environment, states generally did not do so.

HHS agreed that our placement of PCCM programs in the FFS category
was accurate from a reimbursement standpoint, but stated that PCCM
should be considered a managed care delivery system because PCPs are
expected to coordinate care. We continue to believe that a PCCM program
is better described as an FFS-based delivery system because the
differences between PCCM and managed care reimbursement approaches
can differentially affect provider incentives in providing covered services.
Our report does distinguish, however, the degree to which managed care,
traditional FFS, and PCCM programs employ access standards and
monitoring. Overall, states with PCCM programs tended to establish more
standards and conduct somewhat more monitoring than for their
traditional FFS programs, but less than for their managed care programs.

With regard to our finding that states with distinct SCHIP programs did
significantly less to monitor access to care than for their Medicaid
managed care programs, HHS stated there was a key difference in design
and intent by the Congress between SCHIP and Medicaid. HHS
commented that SCHIP allows states to have the flexibility to design
programs that mirror private insurance and rely on private insurance
mechanisms to ensure access to and quality of care, rather than laying out
specific requirements. Acknowledging that states may not have
comparable requirements for SCHIP and Medicaid monitoring provider
participation and beneficiary service utilization, HHS said that states are
monitoring enrollment, health access, and outcomes in their SCHIP


Page 45                                  GAO-03-222 Medicaid and SCHIP Access
                 programs. However, with regard to access, we found that few states with
                 distinct SCHIP programs monitored provider network participation or
                 routinely collected and analyzed data to ensure that SCHIP-eligible
                 children were receiving covered services. We did not intend to suggest
                 that states should use the same processes for their SCHIP and Medicaid
                 programs, but rather simply to contrast states’ monitoring of access to
                 care for low-income children eligible for these two programs.

                 HHS’s comments are reprinted in appendix IV. Additionally, HHS provided
                 technical comments, which we incorporated as appropriate.


State Comments   Several states provided clarifying comments regarding their oversight of
                 access to care in Medicaid and SCHIP. These comments generally
                 pertained to additional factors affecting access to care, the relationship
                 between monitoring and access, and the extent of monitoring in traditional
                 FFS and distinct SCHIP programs.

                 Two states identified factors that affect access to care within their
                 Medicaid and SCHIP programs but are not easily controlled by the states.
                 One state noted that the supply of physicians is severely limited in some
                 states and in some regions of states, affecting all payers, including
                 commercial payers as well as Medicaid and SCHIP. Another state raised
                 the point that the extent to which children receive health care services is
                 influenced by how well their parents or guardians understand and comply
                 with recommended levels of health care set by providers or by the
                 Medicaid program. We agree that provider supply and parental decision
                 making are important determinants in children’s access to care and can be
                 difficult factors for state programs to address. However, the type of
                 monitoring activities addressed in this report can help to identify such
                 factors and areas or locations where problems may be more pronounced,
                 thus leading to more targeted solutions.

                 Four states identified certain activities that they believed facilitated access
                 to care, but were not addressed in the report. One state, for example,
                 noted that its Medicaid program helped beneficiaries locate a source of
                 medical care, and another state described an initiative to send letters to
                 parents of beneficiaries reminding them to schedule medical
                 appointments. Although we recognize that these activities may help
                 promote access to care for the Medicaid and SCHIP populations, this
                 report did not address activities that primarily facilitated access, such as
                 providing outreach to beneficiaries or offering provider payment
                 incentives. Instead, we focused on states’ efforts to (1) establish and


                 Page 46                                    GAO-03-222 Medicaid and SCHIP Access
monitor requirements for provider availability and (2) gather and analyze
data on receipt of care. In this regard, one state commented that the report
had a “narrow perspective” on what constitutes monitoring in managed
care and cited a range of indicators that it used, including beneficiary
complaints, grievance reports, state fair-hearing requests, utilization data,
and immunization rates. While such sources of data and activities hold
strong potential for providing information concerning access to care, this
report identified certain shortcomings of some of these indicators as
programwide measures of access. For example, complaint and grievance
system data can yield important information about problematic providers
or services, but are not reliable measures of programwide access.

Four states cautioned against what they saw as a correlation made in the
report between the amount of monitoring that a state does and the degree
of access to care for program beneficiaries. For example, one state said
that the report suggested that if monitoring is limited, access is also
limited, and disagreed that this is necessarily the case. We did not intend
to present such a direct correlation. However, if a state does not monitor
data related to its access standards and to utilization of services, it may
not know the extent to which beneficiaries encounter problems locating
and obtaining services. During the course of our work, we identified
instances where state data collection and monitoring revealed access
problems that were then addressed to improve beneficiary access.

A few states emphasized that they considered HEDIS and CAHPS
important tools that had helped them monitor health plan performance or
achieve improvements in quality of care for Medicaid and/or SCHIP
beneficiaries. One state noted that HEDIS was important in identifying and
helping to reduce gaps between commercial and Medicaid plan
performance. Another state questioned whether the continuous
enrollment requirements for HEDIS (12 months) and CAHPS (6 months)
would in fact bias the results of any analysis of beneficiaries’ access to
care because it excludes some beneficiaries. In particular, this state
believed that the benefits of improvements made by health plans are not
limited to individuals enrolled for the full 6- or 12-month period. We agree
that HEDIS and CAHPS are important tools in monitoring and comparing
performance across plans, which necessitates that the sample population
be defined by a comparable enrollment period. However, we do not
believe that states can assume that all beneficiaries have access to care on
the basis of HEDIS and CAHPS results that exclude a significant portion of
the program population from their samples.




Page 47                                   GAO-03-222 Medicaid and SCHIP Access
Two states discussed the extent to which they monitored access in
Medicaid traditional FFS compared with Medicaid managed care delivery
systems. One state said it analyzes data on key health outcomes for
children, such as ambulatory-sensitive hospital admissions and trends in
health care utilization. Both states specifically noted their efforts to
comply with federally required reporting of EPSDT utilization for their
FFS programs. Nevertheless, most of the states in our sample had few or
no goals regarding the number of providers available to FFS beneficiaries
and, with the exception of federally required EPDST reporting, few
analyzed data related to access to primary care.

Similar to HHS’s view, one state noted that the report did not account for
the fact that distinct SCHIP programs may choose approaches to program
design and monitoring that differ from Medicaid, including approaches
used in monitoring states’ commercial managed care plans. For example,
this state and others reported relying on state insurance department
licensure of health plans as the means of monitoring provider network
adequacy, rather than imposing additional SCHIP-specific requirements.
We acknowledge in our report that states’ SCHIP programs may rely on
different design and monitoring options than Medicaid. Overall, however,
states with distinct SCHIP programs reported fewer efforts to monitor
children’s access and use of services than in their Medicaid managed care
programs.

Several states also provided technical comments, which we incorporated
as appropriate.


As arranged with your offices, unless you release its contents earlier, we
plan no further distribution of this report until 30 days after the issue date.
At that time, we will send copies of this report to the Administrator of the
Centers for Medicare & Medicaid Services and the Administrator of the
Health Resources and Services Administration. We also will make copies
available to others upon request. In addition, the report will be available at
no charge on the GAO Web site at http://www.gao.gov.




Page 48                                    GAO-03-222 Medicaid and SCHIP Access
If you or members of your staffs have any questions regarding this report,
please contact me on (202) 512-7118. Other contributors to this report are
listed in appendix V.




Kathryn G. Allen
Director, Health Care—Medicaid
 and Private Health Insurance Issues




Page 49                                  GAO-03-222 Medicaid and SCHIP Access
             Appendix I: Medicaid HEDIS Measures
Appendix I: Medicaid HEDIS Measures
             Related to Service Utilization



Related to Service Utilization

             Four of the eight general categories of the Health Plan Employer Data and
             Information Set (HEDIS) measures for Medicaid managed care plan
             performance relate directly to beneficiary service utilization. These four
             categories include effectiveness of care, access/availability of care, use of
             services, and satisfaction with the experience of care.1 Many of the
             measures in these categories require beneficiaries to be continuously
             enrolled for some period, often 12 months, in order to be assessed. Table 8
             details selected HEDIS measures that pertain to service utilization for
             children and adolescents enrolled in Medicaid managed care programs and
             the length of continuous enrollment required.




             1
              The remaining four general categories are health plan stability, cost of care, informed
             health care choices, and health plan descriptive information.




             Page 50                                            GAO-03-222 Medicaid and SCHIP Access
                                             Appendix I: Medicaid HEDIS Measures
                                             Related to Service Utilization




Table 8: Length of Medicaid Enrollment Required for Selected HEDIS Measures for Children’s and Adolescents’ Use of
Services

                                                                                                            Length of continuous
                                                                                                                       a
Category                 Measure name                                                                       enrollment
Effectiveness of care    Childhood immunization status                                                      12 months
                         Adolescent immunization status                                                     12 months
                         Cervical cancer screening                                                          12 months
                         Chlamydia screening                                                                12 months
                         Prenatal care in first trimester                                                   About 9 months prior to delivery
                         Checkups after delivery                                                            About 2 months after delivery
                         Comprehensive diabetes care                                                        12 months
                         Use of appropriate medications for people with asthma                              24 months
                         Follow-up after mental illness hospitalization                                     1 month after discharge
                         Antidepressant medication management                                               12 months
                         Advising smokers to quit                                                           6 months
Access/availability of   Children’s access to primary care providers                                        12 monthsb
care                     Initiation of prenatal care                                                        From 1 to 9 months prior to
                                                                                                                     c
                                                                                                            delivery
                         Annual dental visit                                                                12 months
                         Availability of language interpretation services                                   None
Use of services          Frequency of ongoing prenatal care                                                 None
                         Well-child visits in the first 15 months of life                                   From 1 to 15 months of aged
                         Well-child visits in the third, fourth, fifth and sixth year of life               12 months
                         Adolescent well-care visits                                                        12 months
                         Inpatient utilization—general hospital/acute care                                  None
                         Ambulatory care                                                                    None
                         Inpatient utilization—nonacute care                                                None
                         Discharges and average length of stay—maternity care                               None
                         Cesarean section rate                                                              None
                         Vaginal birth after cesarean section rate                                          None
                         Births and average length of stay, newborns                                        None
                         Mental health utilization—inpatient discharges and average length of stay          None
                         Mental health utilization—percentage of members receiving inpatient,               None
                         day/night care, and ambulatory services
                         Chemical dependency utilization—percentage of members receiving                    None
                         inpatient, day/night care, and ambulatory services
                         Outpatient drug utilization                                                        None
Satisfaction with the
experience of care       Consumer Assessment of Health Plans (adults and children)                          6 months

                                             Source: National Committee for Quality Assurance, HEDIS 2000: Technical Specifications
                                             (Washington, D.C.: 1999).
                                             a
                                              For measures listed with a continuous enrollment requirement, HEDIS guidelines indicate that the
                                             managed care entity must assess on a measure-by-measure basis whether the measure may be
                                             reported in the current measurement year. Partial year reporting for the measures in this table was
                                             considered acceptable or possible by the HEDIS guidelines.




                                             Page 51                                                GAO-03-222 Medicaid and SCHIP Access
Appendix I: Medicaid HEDIS Measures
Related to Service Utilization




b
    Older age groups (7 to 11 years) require 24 months enrollment.
c
Measure requires continuous enrollment of at least 43 days prior to delivery but no more than 279
days.
d
    Measure requires that child is enrolled from 31 days through 15 months of age.




Page 52                                                   GAO-03-222 Medicaid and SCHIP Access
                Appendix II: Managed Care Plan Withdrawals
Appendix II: Managed Care Plan Withdrawals
                from Medicaid in Four States



from Medicaid in Four States

                Four states we visited—Massachusetts, Ohio, Tennessee, and Texas—had
                varying experiences in terms of the number and impact of managed care
                plan withdrawals from their Medicaid managed care programs. In some
                cases, as in Massachusetts, the changes occurred early in the states’
                implementation of their programs and the number of plans has been stable
                in recent years; in other cases, as in Ohio and Tennessee, the changes in
                participating plans continued over time and presented ongoing challenges
                to the states in managing their programs and ensuring appropriate access
                to care for their beneficiaries. The proportion of Medicaid beneficiaries
                affected by withdrawals of participating managed care plans ranged from
                about 1 percent in Texas to almost 50 percent in Tennessee. Following is a
                brief description of managed care plan withdrawals in each of the four
                states and examples of some of the measures states took to minimize
                disruption to beneficiaries’ care as a result of the changes.


                Health plan participation in Massachusetts’ Medicaid managed care
Massachusetts   program has slowly stabilized, with four plans participating in the program
                since 2000. Earlier fluctuations occurred, however, as the state shaped its
                program to limit the number of participating plans and as some health
                plans decided to consolidate or leave the market. These early changes in
                participating plans affected about 4 percent of the state’s Medicaid
                population.

                Massachusetts began its current Medicaid managed care program in July
                1997 with nine participating health plans.1 Two of the health plans, created
                by hospital systems that had traditionally provided services to lower
                income individuals, were formed specifically for this program. Of the
                remaining seven plans participating in the state’s Medicaid program, many
                were commercially available. Within the first 2 years of the program,
                however, the number of participating health plans declined to five. This
                reduction was partially a result of the state’s decision to contract with
                fewer health plans and to provide each health plan with a greater volume
                of beneficiaries. As a result of this decision, contracts were not renewed
                with two health plans and approximately 42,000 beneficiaries (about 4



                1
                 Prior to 1997, Massachusetts had a managed care program with voluntary enrollment for
                most Medicaid beneficiaries. As many as 13 health plans participated in the state’s
                Medicaid managed care program during the early 1990s. However, since enrollment was
                not mandatory, only a small number of Medicaid beneficiaries joined health plans. These
                low enrollment figures, coupled with health plan consolidations, resulted in some plans
                leaving the Medicaid program.




                Page 53                                         GAO-03-222 Medicaid and SCHIP Access
       Appendix II: Managed Care Plan Withdrawals
       from Medicaid in Four States




       percent of the state’s Medicaid population) had to select other plans. In
       addition, during this period several health plans merged and at least one
       plan left the Massachusetts health care market altogether. State officials
       reported that some plans lost interest in participating because of
       Medicaid’s administrative and reporting requirements. Additionally,
       commercial plans found that the Medicaid benefit package included
       certain services—such as behavioral health services—that the health plans
       did not provide their other members. This meant that health plans had to
       establish networks specifically for Medicaid beneficiaries; without a
       “critical mass” of Medicaid beneficiaries, however, health plans had
       difficulty remaining financially viable in the program. When participating
       plans withdrew from the state’s Medicaid program, state officials said that
       beneficiaries enrolled in the affected plans were informed that the plans
       would no longer be participating in the program and were provided an
       opportunity to choose other plans or enroll in the state’s primary care case
       manager program.


       Since the inception of its mandatory managed care program in 1996, Ohio
Ohio   has faced a large number of health plan withdrawals. As of January 2002,
       10 plans had completely withdrawn from program participation, while 3
       additional plans had withdrawn from specific counties in the state. Over
       224,000 Medicaid beneficiaries—over 15 percent of the state’s Medicaid
       population—were affected by plan withdrawals. As a result of these
       withdrawals and providers’ growing reluctance to participate in managed
       care, Ohio changed from mandatory to voluntary managed care enrollment
       in some counties and fee-for-service (FFS) in others. As of April 2002,
       Ohio had 7 managed care plans serving Medicaid beneficiaries in 15
       counties, with mandatory enrollment in only 4 of the counties.

       Ohio Medicaid officials expected to see some fluctuations in plan
       participation in the early years of its program. They anticipated that some
       plans would withdraw due to the state’s requirement that plans that did
       not have significant enrollment—from 10 to 15 percent of the eligible
       population—within 2 years of the program’s inception would be required
       to leave the program. Several reasons were provided for the number of
       plans that eventually withdrew from the program, including voluntary
       withdrawal and court-ordered liquidations. In many cases, health plans
       sold their Medicaid membership to other plans. State officials
       acknowledged that the relatively large number of plan withdrawals
       affected individuals’ perception of the program and led to changes in the
       state’s managed care enrollment policy, with some counties switching
       from mandatory to voluntary managed care enrollment. Concerns about


       Page 54                                      GAO-03-222 Medicaid and SCHIP Access
            Appendix II: Managed Care Plan Withdrawals
            from Medicaid in Four States




            the program’s viability and stability were increased when the state
            insurance department liquidated one Medicaid health plan in 1998 and
            some of its network providers did not receive compensation from the plan.

            State officials did not believe that beneficiaries’ access to care was
            affected by these plan withdrawals. In cases where a health plan’s
            membership was sold to another plan, the state attempted to ensure
            continuity of care by requiring that at least 90 percent of the current plan’s
            primary care providers (PCP) were included in the provider network of
            the purchasing plan.2 In other cases, we were told, beneficiaries were
            notified of their health plan’s impending withdrawal and provided an
            opportunity to select another plan if available. If a beneficiary did not
            select a health plan, or there was no alternative plan available, then the
            beneficiary returned to the state’s FFS program. In areas with mandatory
            managed care enrollment, however, beneficiaries were not allowed to
            remain in FFS indefinitely; they were required to select another plan or be
            automatically assigned to one.


            In establishing its mandatory managed care program in January 1994,
Tennessee   Tennessee expanded Medicaid eligibility to hundreds of thousands of
            previously uninsured individuals and enrolled them into 1 of 12 capitated
            managed care plans. Four plans left the program or were sold from 1994
            through 1999.3 Since 2001, plan withdrawals have increasingly been an
            area of concern, with large numbers of Medicaid beneficiaries affected by
            changes to the state’s 2 largest health plans. For example, in 2001, almost
            580,000 beneficiaries, or 41 percent of the state’s Medicaid population,
            were affected when 1 plan withdrew from the western and central
            portions of the state and a second plan’s contract was terminated due to
            solvency issues. In response to the first of these two withdrawals, the state
            took two actions: (1) it recruited two new health plans to join the market
            and (2) it created a self-insured plan to serve as a backup in areas of the
            state where beneficiaries could not be adequately served by other health
            plans.




            2
             Of the beneficiaries affected by plan withdrawals in Ohio from 1996 to January 2002,
            nearly half were involved in withdrawals that were the result of a plan selling its
            membership to another plan.
            3
             Plan withdrawals during this period affected approximately 105,000 beneficiaries, about 7
            percent of the state’s Medicaid population.




            Page 55                                          GAO-03-222 Medicaid and SCHIP Access
        Appendix II: Managed Care Plan Withdrawals
        from Medicaid in Four States




        As of April 2002, 10 health plans were participating in Tennessee’s
        Medicaid managed care program although 2 plans, covering 21 percent of
        the state’s Medicaid beneficiaries, were considered to be at financial risk.
        The state announced its intention in March 2002 to terminate its contract
        with 1 health plan, which would necessitate the transfer of approximately
        135,000 beneficiaries to other health plans.4 A second plan, with over
        160,000 beneficiaries, was under rehabilitation by the state’s insurance
        department.

        In view of the instability of the program and participating plans, Tennessee
        has taken several steps to help ensure continuous access to care for
        Medicaid beneficiaries. In order to provide time to plan ahead in the event
        of plan withdrawals, the state’s contract with participating plans requires 6
        months of advance notice of an intended withdrawal and a transition plan
        to assure uninterrupted care to beneficiaries. When plans stopped
        participating in the program, beneficiaries were either provided the option
        to select new health plans or were assigned to health plans.


        Texas began its capitated Medicaid managed care program in1996 in four
Texas   areas of the state. Since 1996, managed care was expanded to three
        additional service areas and now exists in 46 of the state’s 254 counties.
        Since the rollout of managed care began, only three plans have withdrawn
        from participation in Texas’ Medicaid managed care program, affecting
        less than 20,000 beneficiaries, or approximately 1 percent of the state’s
        Medicaid population.5 Two of these withdrawals were from the same
        service delivery area, leaving three plans participating in that area.6
        However, the state contends that prior to the withdrawals there was a
        saturation of health plans in that service delivery area. As of July 2002, 11
        plans were participating in the Medicaid managed care program.




        4
         According to the state, the decision to terminate the contract was based on problems
        including the plan’s financial solvency and failure to pay accurate and timely claims. As of
        May 1, 2002, the state was working with the health plan in an attempt to resolve these
        problems.
        5
         Over 50,000 additional beneficiaries were affected when their health plan was acquired by
        another participating health plan.
        6
         There are seven service areas, each consisting of multiple counties, in Texas’ Medicaid
        capitated managed care program. Health plans are contracted by service area, with some
        health plans having contracts in multiple service areas.




        Page 56                                            GAO-03-222 Medicaid and SCHIP Access
                                          Appendix II: Managed Care Plan Withdrawals
                                          from Medicaid in Four States




                                          In one instance, a participating plan gave the state less than 3 weeks’
                                          notice of its intent to leave the program. Because of the limited notice,
                                          beneficiaries were automatically assigned to other plans in order to
                                          minimize disruption in their access to care. Although these assignments
                                          were initially made without direct input from the affected beneficiaries,
                                          their prior PCP and specialist utilization patterns were taken into account
                                          during this assignment process and beneficiaries were later given an
                                          opportunity to change plans. The state paid particular attention to the
                                          number of complaints during these transition periods and did not see a
                                          dramatic change. As such, state officials believe that the transitions went
                                          smoothly. Texas has a number of other measures in place to facilitate
                                          beneficiaries’ enrollment in alternative plans when their plans leave the
                                          program, as illustrated in table 9 along with additional examples from
                                          other states we visited.

Table 9: Examples of Plan Withdrawal Transition Activities Conducted by Four State Medicaid Programs

Type of action                            Examples of action
Contractual requirements of managed       • Massachusetts takes responsibility for notifying beneficiaries of the health plan’s
care plans                                  withdrawal from the program and the process beneficiaries must undergo to continue to
                                            receive services; however, health plans must continue to provide services until the
                                            beneficiary is disenrolled and participating in another plan.
                                          • Ohio’s contract requires the collection of monetary assurance or the withholding of
                                            payments from withdrawing health plans until all contract requirements are completed.
                                          • Texas requires health plans to provide the state 90 days notice of their intention to
                                            terminate participation, Ohio requires 75 days notice, and Tennessee requires 6
                                            months advanced notice.
                                          • Tennessee’s contract requires withdrawing health plans to submit transition plans to
                                            ensure uninterrupted care to beneficiaries.
Notification of beneficiaries and other   • Ohio, Tennessee and Texas send letters to beneficiaries informing them of the health
stakeholders                                plan’s withdrawal. The letters may include a list of the other health plans, important
                                            telephone numbers, and actions beneficiaries must take.
                                          • Texas notifies stakeholders, including the enrollment broker and other health plans, of
                                            the impending withdrawal. Remaining health plans in the area are provided with a list of
                                            PCPs that are only participating with the exiting plan. Additionally, the state or health
                                            plan notifies providers of the plan’s intention to withdraw from the program.
Coordination between plans                • In Texas, the withdrawing plan identifies individuals with special needs and a dialogue
                                            between the current and future case managers begins. In addition, the withdrawing
                                            health plan provides instructions for providers on seeking authorization for continued
                                            services from new health plan.

                                          Source: GAO analysis of states’ data, December 2001.




                                          Page 57                                                GAO-03-222 Medicaid and SCHIP Access
              Appendix III: Analysis of Medicaid FFS
Appendix III: Analysis of Medicaid FFS
              Payment Rates in Selected States



Payment Rates in Selected States

              Nationally, low Medicaid physician fees have been a long-standing area of
              concern because they can affect the degree to which physicians
              participate in Medicaid, and thereby affect beneficiaries’ access to care.
              The relative fees paid by different insurers—Medicare, Medicaid, and
              SCHIP—can also affect providers’ willingness to participate in these
              programs. Since many children in Medicaid remain in fee-for-service
              (FFS)-based programs, we compared Medicaid fees for selected office visit
              and pediatric preventive medical care services to the corresponding
              Medicare fees. While Medicare is a federal health insurance program
              primarily for the elderly and persons with disabilities, some children do
              receive Medicare benefits and thus its fee schedule includes fees for
              pediatric medical services. Among the 13 states we reviewed that used
              FFS-based delivery systems as a key care delivery system for Medicaid
              children,1 Medicaid fees for primary and preventive care ranged from 32
              percent to 89 percent of what Medicare would pay for similar services.
              (See table 10.) Concerns with the adequacy of Medicaid physician payment
              levels were also identified in studies of Medicaid physician payment in
              California, Washington, and Maryland.2




              1
               Tennessee enrolls nearly all beneficiaries in managed care; therefore, we did not collect a
              Medicaid FFS payment schedule that can be compared to Medicare rates.
              2
               See PriceWaterhouseCoopers, Comparing CPT Code Payments for Medi-Cal and Other
              California Payers (Oakland, Calif.: June 2001) and University of Washington, State
              Primary Care Provider Study, Health Policy Analysis Program (Seattle, Wash.: February
              2001). A study was also conducted in Maryland because, even though most beneficiaries
              are served through managed care, the state Medicaid program’s FFS payment rates for
              some groups of beneficiaries are considered to affect what managed care plans pay
              physicians. See State of Maryland Department of Health and Mental Hygiene, Report on the
              Maryland Medical Assistance Program and Maryland Children’s Health Program –
              Reimbursement Rates Fairness Act (Baltimore, Md.: September 2001).




              Page 58                                            GAO-03-222 Medicaid and SCHIP Access
                    Appendix III: Analysis of Medicaid FFS
                    Payment Rates in Selected States




                    Table 10: Medicaid FFS Payment Rates, Expressed as a Percentage of Medicare
                    Payments, in 13 States with Traditional FFS or Primary Care Case Manager Delivery
                    Systems That Serve Children

                                                                      Medicaid FFS payments as a percentage
                        Statea                                          of Medicare FFS payments (weighted)
                                     b
                        Massachusetts                                                                    89
                        Arkansas                                                                         71
                        Florida                                                                          71
                        Texas                                                                            71
                        Nevada                                                                           66
                        Ohio                                                                             64
                                b
                        Illinois                                                                         61
                        Washington                                                                       60
                        Colorado                                                                         57
                        Louisiana                                                                        57
                        New Yorkb                                                                        54
                        California                                                                       48
                        Pennsylvania                                                                     32

                    Source: GAO analysis of Medicare data and states’ data, as of December 2001.
                    a
                     Other study states not shown on this table include the following: Tennessee enrolls nearly all
                    beneficiaries in capitated managed care, and therefore, we did not collect a Medicaid FFS payment
                    schedule that can be compared to Medicare rates. Maryland uses a FFS-based delivery system for
                    less than 5 percent of children and includes only those children requiring case management for rare
                    and expensive conditions, or who are technology dependent. Michigan uses FFS-based care only for
                    children in an eligibility category for special needs.
                    b
                     Illinois, Massachusetts, and New York provide payment enhancements for some services, in addition
                    to the regular fee for the service; where appropriate, these enhancements were included in the
                    analysis.




                    For our comparative analysis of Medicaid and Medicare FFS payments, we
Methodology for     obtained fee schedules from 13 of the 16 states we reviewed, compiling
Comparison of FFS   fees for 12 medical services using selected codes from a commonly used
                    procedural coding system—the standard Physicians Current Procedural
Payment Rates       Terminology, 4th edition (CPT 4). (See table 11.) For each state, we
                    weighted the Medicaid and corresponding lowest Medicare fees3 for that
                    state by the relative utilization of the service among pediatricians,
                    identified from a 1999 American Academy of Pediatrics survey.4 The sum


                    3
                        States can have more than one Medicare payment rate for a service, varying by locality.
                    4
                    Monique Morris and Suk-fong Tang, Pediatric Service Utilization, Fees and Managed
                    Care Arrangements: 2001 Report Based on 1999 Data (Elk Grove Village, Ill.: American
                    Academy of Pediatrics, 2001).



                    Page 59                                               GAO-03-222 Medicaid and SCHIP Access
Appendix III: Analysis of Medicaid FFS
Payment Rates in Selected States




of the weighted Medicaid fees was then expressed as a percentage of the
sum of the Medicare payments in order to develop a single, weighted
payment rate.

Table 11: CPT 4 Codes Used in Comparing Medicaid and Medicare Fees

CPT 4 code                               Description
Office or other outpatient visit
99201                                    New patient, 10 minute visit
99202                                    New patient, 20 minute visit
99203                                    New patient, 30 minute visit
99213                                    Established patient, 15 minute visit
99214                                    Established patient, 25 minute visit
Preventive medical services
99381                                    New patient, under 1 year
99382                                    New patient, 1 to 4 years
99383                                    New patient, 5 to 11 years
99391                                    Established patient, under 1 year
99392                                    Established patient, 1 to 4 years
99393                                    Established patient, 5 to 11 years
99394                                    Established patient, 12 to 17 years

Source: CPT 4.




Page 60                                       GAO-03-222 Medicaid and SCHIP Access
             Appendix IV: Comments from the Department
Appendix IV: Comments from the
             of Health and Human Services



Department of Health and Human Services




             Page 61                                     GAO-03-222 Medicaid and SCHIP Access
Appendix IV: Comments from the Department
of Health and Human Services




Page 62                                     GAO-03-222 Medicaid and SCHIP Access
Appendix IV: Comments from the Department
of Health and Human Services




Page 63                                     GAO-03-222 Medicaid and SCHIP Access
Appendix IV: Comments from the Department
of Health and Human Services




Page 64                                     GAO-03-222 Medicaid and SCHIP Access
                  Appendix V: GAO Contact and Staff
Appendix V: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Carolyn L. Yocom, (202) 512-4931
GAO Contact

                  Catina Bradley, Karen Doran, Laura Sutton Elsberg, Mary Giffin, Michelle
Acknowledgments   Rosenberg, and Ann Tynan made key contributions to this report.




                  Page 65                                 GAO-03-222 Medicaid and SCHIP Access
             Related GAO Products
Related GAO Products


             Mental Health Services: Effectiveness of Insurance Coverage and Federal
             Programs for Children Who Have Experienced Trauma Largely
             Unknown. GAO-02-813. Washington, D.C.: August 22, 2002.

             Children’s Health Insurance: Inspector General Reviews Should Be
             Expanded to Further Inform the Congress. GAO-02-512. Washington, D.C.:
             March 29, 2002.

             Medicaid and SCHIP: States’ Enrollment and Payment Policies Can
             Affect Children’s Access to Care. GAO-01-883. Washington, D.C.:
             September 10, 2001.

             Medicaid: Stronger Efforts Needed to Ensure Children’s Access to Health
             Screening Services. GAO-01-749. Washington, D.C.: July 13, 2001.

             Medicaid Managed Care: States’ Safeguards for Children With Special
             Needs Vary Significantly. GAO/HEHS-00-169. Washington, D.C.:
             September 29, 2000.

             Oral Health: Factors Contributing to Low Use of Dental Services by Low-
             Income Populations. GAO/HEHS-00-149. Washington, D.C.:
             September 11, 2000.

             Medicaid and SCHIP: Comparisons of Outreach, Enrollment Practices,
             and Benefits. GAO/HEHS-00-86. Washington, D.C.: April 14, 2000.

             Oral Health: Dental Disease Is a Chronic Problem Among Low-Income
             Populations. GAO/HEHS-00-72. Washington, D.C.: April 12, 2000.

             Children’s Health Insurance Program: State Implementation Approaches
             Are Evolving. GAO/HEHS-99-65. Washington, D.C.: May 14, 1999.

             Medicaid Managed Care: Challenge of Holding Plans Accountable
             Requires Greater State Effort. GAO/HEHS-97-86. Washington, D.C.:
             May 16, 1997.




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             Page 66                                GAO-03-222 Medicaid and SCHIP Access
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