Auto-Assignment and Enrollment in Medicaid Managed Care Programs

Regarding the financial pressure on state governments brought about by the growth of Medicaid expenditures, see, for example, Freund D. Hurley R. , “Medicaid Managed Care: Contribution to Issues of Health Reform,” Annual Review Public Health, 16 (1995): At 474. For a discussion of the impact of proposed federal spending reductions on state Medicaid programs, see Holohan J. Liska D. , The Impact of the “Medigrant” Plan on Federal Medicaid Payments to States (Washington, D.C.: Kaiser Commission on the Future of Medicaid, Dec. 1995).

Federal law requires that services made available to any categorically needy or medically needy group be equal in amount, duration, and scope for all individuals in the group. 42 U.S.C. § 1396a(a)(10)(B)(i) (1992). Under a managed care waiver, the services available to those enrolled in a managed care plan need no longer be “comparable” to the services received by recipients enrolled in fee-for-service Medicaid.

42 U.S.C. § 1315 (1992). The section 1115 waiver requires that any plan implemented “be consistent with” and, in fact, promote “the objectives of the Medicaid Act.” For an excellent review of the many issues these waivers raise, see Perkins J. Melden M. , “The Advocacy Challenge of a Lifetime: Shaping Medicaid Waivers to Serve the Poor,” Clearinghouse Review, 28 (1994): 864–85.

In 1981, Congress created the disproportionate share program to reward certain state-specified hospitals for their ongoing delivery of health services to the poor and to protect their solvency. 42 U.S.C. § 1396(a)(13)(A) (1992); and 42 U.S.C. § 1396r-4(b) (1992). Disproportionate share payments are supplemental payments to the normal Medicaid rate that states must pay to hospitals that provide inpatient and long-term care service to a disproportionate number of low-income patients with special needs. States applying for section 1115 waivers generally propose to shift these expenditures to direct coverage of a portion of their uninsured citizens.

Tennessee Medicaid Managed Care , 1995; Report to the Ranking Minority Member, Committee on Commerce, House of Representatives (Washington, D.C.: General Accounting Office, GAO/HEHS-95-186, 1995): At 2.

For the most part, section 1115 waivers addressed various aspects of mandatory copayments and mandatory enrollment in Medicaid managed care. Perkins Melden , supra note 3 at 866.

The Republican Medicaid Block Grant legislation, President Clinton's Medicaid proposal, and the National Governors Association's recommendations would have eliminated the need to file a waiver with HCFA as a prerequisite to implementing Medicaid managed care. See, for example, The Balanced Budget Act of 1995, H.R. 2491, 104th Cong., 1st Sess., tit. VII, § 2116(b), 181 Cong. Rec. H12, 562 (1995) (vetoed by President Clinton); Perkins J. Regan M. , “The Clinton Proposal and Medicaid Managed Care,” Dec. 15, 1995, at 1 (available from National Health Law Program, Washington, D.C.); President Clinton's Health Care Initiative, Dec. 7, 1995, at 25; National Governors Association Proposals on Welfare and Medicaid, 1996: Hearings Before the Senate Committee on Finance, 104th Cong., 2d Sess. 29 (1996) (testimony of Tallon James R. Jr. , chairman, Kaiser Commission on the Future of Medicaid) at 9–10.

Managed care has changed the traditional relationship between physician and patient. The physician can no longer function entirely as the patient's advocate; he/she must also serve the MCO's goal of controlling costs. Physicians may be contractually bound to financial arrangements that discourage them from providing care, or to “gag” rules that prohibit them from saying anything negative about the plan and may prevent them from informing patients about their medical needs. See, for example, Kreier R. , “New York Suit Fights Increasingly Common HMO Gap Rules.”’ American Medical News. Dec. 1, 1995, at 5.

See, for example, Arizona Medicaid: Nondisclosure of Ownership Information by Health Plans. 1985: Report to Chairman, Subcommittee on Health and the Environment, House Committee on Energy and Commerce (Washington, D.C.: General Accounting Office. GAO/HRD-86-10, 1996); and Medicaid: Lessons Learned from Arizona's Prepaid Program, 1987: Report to the Secretary of Health and Human Services (Washington, D.C.: General Accounting Office, GAO/HRD-87-14, 1987). Regarding the basis for federal Medicaid managed care consumer protections, see, for example, H.R. 727, 99th Cong., 2d Sess. (1986), reprinted in U.S.C.C.A.N. (1986) 3708–14. Additional federal requirements were enacted to “avoid the recurrence of [the] debacle” that took place in Arizona's Medicaid managed care program. Id. at 3713.

For further discussion of problems with health care delivery under Medicaid managed care, see, for example, Freund D. Lewit E. , “Managed Care for Children and Pregnant Women: Promises and Pitfalls.” Health Care Reform, 3 (1993): 92–121; Goldfarb N. , “Impact of a Mandatory Medicaid Case Management Program on Prenatal Care and Birth Outcomes,” Medical Care, 29 (1991): 64–71; Freund D. , “Evaluation of the Medicaid Demonstrations,” Health Care Financing Review, 11, no. 2 (1989): 81–97; Anderson M. Fox P. , “Lessons Learned from Medicaid Managed Care Approaches,” Health Affairs, 6, no. 2 (1987): 70–86; and McCall N. , “Evaluation of the Arizona Health Care Cost Containment System,” in Health Care Financing Administration: Final Report (Menlo Park: SRI International, Jan. 1989).

Health Care Financing Administration (1993) HCFA Region IX: Medicaid Review Report 1993: Review of Arizona's Title XIX Mental Health Program (San Francisco: Department of Health and Human Services, July 15, 1993): At 11–12. In 1993, HCFA found that components of intake, case management, treatment authorization, provider contracting, data processing and claim payment arc so disparate and uncoordinated that there is inefficiency and non-accountability throughout the program. Some patients complain of fragmented care. “Accountability is spread among so many agencies that … when things go wrong they are impossible to correct, because it is always ‘someone else's responsibility.”’ Id.

For a discussion of the consequences of insufficient planning of Medicaid managed care, sec, for example, Mirvis D. , “TennCare—Health System Reform for Tennessee”, JAMA, 274 (1995): 1235, 1239–40; and Fein E. , “Managed Care for Needy: Guliani's Unrealized Plan,” New York Times, May 25, 1996, at 16.

See, for example, Letter from Missouri Consumer Health Care WATCH to Donna Checkett, Director, Missouri Medicaid, June 28, 1995; and Letter from Ann Swerlick, Florida Legal Services, to Rita Johnson-Milis, Director, Medicaid Managed Care, Health Care Financing Administration, Jan. 1, 1996, at 9 (regarding possible negative effects of auto-assignment).

Medicaid: States Turn to Managed Care to Improve the Access and Control Costs (Washington, D.C.: General Accounting Office, GAO/HRD-93-46, 1993): At 35,575.

Hurley R. Freund D. , “Determinants of Provider Selection or Assignment in a Mandatory Case Management Program and Their Implication for Utilization,” Inquiry, 25 (1988): 402–10.

Managed Care and Low-Income Populations: A Case Study of Managed Care in Minnesota (Washington, D.C.: Mathematica Policy Research, May 1996): At 11.

Telephone interview with Susan Sherry, Director, States Program, Families USA, June 11, 1996.

DesHarnis S. , “Enrollment in and Disenrollment from Health Maintenance Organizations by Medicaid Recipients,” Health Care Financing Review, 6, no. 3 (1995): 39–50.

Letter from Wright Robert W. Director, Illinois Department of Public Aid, to Clemmons Gina P. , Research Analyst, Health Care Financing Administration, Dec. 20, 1994 (Illinois's response to HCFA's Questions for Clarification regarding its section 1115 waiver, at 95); see also Hurley R. Gage B. Freund D. , “Rollover Effects in Gatekeepers Programs: Cushioning the Impact of Restricted Choice,” Inquiry, 28 (1991): 375–84.

See, for example, McGlaughlin T. , “Medicaid Contract Worth $190 Billion to 7 Insurers,” St. Louis Business Journal, Apr. 24–30, 1995, at 13A, regarding the disproportionately high percentage of auto-assignees expected by the state and why this population is “lucrative” for health plans and a “boon for GenCare.” (GenCare is one of Missouri's Medicaid managed care plans.) Had the low enrollment in Medicaid managed care programs not improved, GenCare could have gained $23 million or more in extra revenue from “serving” auto-assigned Medicaid participants. Under the Missouri algorithm, GenCare received 26.14 percent of the auto-assigns while the Alliance for Community Health, a new local health plan consisting of traditional Medicaid providers that arc federally funded community health centers, would only receive 10.51 percent. See McGlaughlin T. , “Slow Medical Enrollment Brightens GenCare's Outlook,” St. Louis Business Journal, Aug. 7–13, 1995, at 1, 13A.

The Rhode Island Medicaid managed care program, RIteCare, developed an algorithm that cost over $100,000 to develop, but then the state manually auto-assigned recipients to the lowest bidding plan, United Health Care. Notably, this health plan had the most non-English-speaking members but no materials printed in any language other than English. Recipients enrolled in this plan experienced delays in primary care appointments of up to twenty months. The Rhode Island program also proposed to conduct auto-assignments of mailed applications if a choice had not been made within five days. The Rhode Island auto-assignment proposal was rejected by HCFA in response to consumer opposition. Rhode Island then revised the process to allow for two scheduled face-to-face appointments within a month, a mailed application, and a thirty day turn around time. See Perkins J. , “Memorandum to Persons Interested in Managed Care,” Aug. 17, 1995, at 11 (available from National Health Law Program, Washington, D.C.); and Presentation of Jane Perkins at “Evolving Medicaid: State Child Health Advocacy,” July 24, 1995, Washington, D.C.

Rowland D. , Medicaid and Managed Care: Lessons from the Literature (Washington, D.C.: Kaiser Commission on the Future of Medicaid, Mar. 1995).

Id. at 25.

Enrollment materials should be made available in alternative formats, such as braille, when necessary to meet the special needs of Medicaid recipients.

For example, enrollees in some Tennessee Medicaid MCOs were offered inducements such as life insurance and secured credit cards, while some plans directed potential clients with costly diseases, such as AIDS, to other MCOs. Mirvis , supra note 13, at 1239.

For a discussion of enrollment brokers, see, for example, Kenesson M. , “Benefits Counseling Models and Issues,” in Medicaid Managed Care: A Guide for States (Portland: National Academy for State Health Policy, 2d ed., 1995): Ch. 1; and Managed Care and Low-Income Populations: A Case Study of Managed Care in California (Washington, D.C.: Mathematics Policy Research, May 1996): At 17–24 (regarding that state's decision to use an enrollment broker).

Letter from Lu Zawistowich, Deputy Director, Office of Demonstrations and Evaluations, Health Care Financing Organization, to Robert W. Wright, Director, Illinois Department of Public Aid, Nov. 29, 1994. HCFA stated that “a 70 percent default assignment rate would be a failure in the education process.”

Id. HCFA does not mandate a set percentage of voluntary enrollment.

See Medicaid, supra note 15, at 35,486. For further discussion of the Minnesota enrollment process, see Managed Care and Low-Income Populations, supra note 17, at 35.

See Medicaid, supra note 15, at 35,486. Telephone interview with Peed Karen , Managed Care Division, Minnesota Department of Human Services, Aug. 2, 1995.

“High Rate of Self Selection Found Under Mandatory Medicaid HMO Program,” Health Care Policy Report (BNA), No. 4, at 697–98 (Apr. 22, 1996). New Jersey found that most states automatically assign about 45 percent of beneficiaries to an HMO because they failed to make a choice.

McGlaughlin (Apr. 24–30, 1995), supra note 22.

Presentation of Matt Marsiglia to Missouri Consumer Health Care WATCH, Aug. 3, 1995. According to Marsiglia, Project Director of First Health, approximately twenty-eight Help-Line operators processed about 1,300 telephone enrollments in a single day. Marsiglia estimated that operators spent an average of six minutes per telephone call.

Telephone interview with Matt Marsiglia, Jan. 25, 1996.

To put additional pressure on the state, the St. Louis City Board of Aldermen passed a resolution condemning the state's enrollment process and recommending postponement of auto-assignment until sufficient opportunities for voluntary enrollment had occurred. The Board of Aldermen found that “the plan for enrollment may lead to our residents becoming assigned to an HMO because the process is too confusing and limited in scope, or because citizens cannot find help or information in time to choose a doctor and a health plan.” St. Louis, Mo., Res. No. 67, 1995–96 Sess. (July 21, 1995). Furthermore, because of problems with enrollment, the St. Louis Department of Health and Hospitals used its own outreach workers to inform the community, thus filling the gaps in information and outreach. The health plan providers themselves, in violation of program requirements, also aggressively instructed clients to select a particular managed care plan, and, in some cases, filled out enrollment forms for Medicaid recipients. At the same time, advocates put pressure on HCFA and the state agency to extend the auto-assignment date. See, for example, Letter from Missouri Consumer Health Care WATCH to Checkett Donna , Director, Missouri Medicaid, June 28, 1995; and Letter from Missouri Consumer Health Care WATCH to Johnson-Mills Rita , Director, Medicaid Managed Care Team, Health Care Financing Organization, Aug. 25, 1995.

Managed Care and Low-Income Populations, supra note 30, at 20–23. Many states now use enrollment brokers to increase the percentage of voluntary enrollment. Enrollment brokers are often paid only for each person they enroll. While this provides an incentive to increase the number of voluntary enrollments, it does not ensure that the enrollment process guarantees any level of quality in that consumers actually know what they are choosing or what it means to be in capitated managed care, particularly if most of the enrollments are conducted by mail or by telephone.

Letter from Swerlick Ann , supra note 14.

Rowland , supra note 24.

Hurley , supra note 21.

Hurley Freund , supra note 16.

Statement of Rita Johnson-Mills, Director, Medicaid Managed Care Team, Health Care Financing Organization, at a meeting with the National Health Law Program, Apr. 20, 1995.

HCFA has asked state Medicaid agencies whether they planned to take into account zip codes in auto-assigning recipients. Letter from Cain S.V. , Acting Associate Regional Administrator for Medicaid, Health Care Financing Administration, to Stangler Gary J. , Director, Missouri Department of Social Services, July 13, 1995, at 2 (enclosure). As indicated, assignment using geographical criterion does not resolve the auto-assignment problem for consumers. When Haitian Medicaid recipients were assigned by geography rather than by prior primary care provider, they were assigned away from the Haitian providers with whom they had a primary care relationship. Telephone interview with Sherry , supra note 18.

See North Carolina Division of Medical Assistance, Algorithm Z1 Through Z4 (1995). North Carolina Division of Medical Assistance has developed a simplified version of the algorithm that takes into account zip codes and previous plan enrollment. See North Carolina Division of Medical Assistance, HealthCare Connection Auto-Assignment Algorithm (1996); and Telephone interview with Hunter Jill , Risk Contracts Specialist, North Carolina Division of Medical Assistance, Sept. 5, 1996.

Telephone interview with Friedman Meryl Director, HMO Program, Massachusetts Division of Medical Assistance, Aug. 1, 1995; Telephone interview with Thomson Deborah , Massachusetts Alzheimer's Association, May 29, 1996; and Mass. Regs. Code, tit. 130, § 508.110 (1995).

Medicaid , supra note 15, at 35,486.

Department of Health Services, State of California, “Extension of the Medicaid Managed Care Program: The Two Plan Model, Section 1915(b) Capitated Waiver Request,” submitted June 1995, App. A.22, at 6.

One may question at what point the patient bears responsibility for continuing to remain assigned to an inaccessible plan. Too often, however, the lack of outreach and education combined with recipients' poor understanding of the enrollment process are the reasons why auto-assignments occurred in the first place. Furthermore, regardless of who is at fault for an inappropriate auto-assignment, neither the state, the recipient, nor the health care system is served in the long run by the continued enrollment of auto-assigned recipients in inaccessible managed care plans.

Telephone interview with Peed , supra note 34.

If one can disenroll only “for cause” when health plans are inaccessible, the burden is placed on the recipient to convince the health plan and/or the state agency that such “good cause” exists. The recipient may be required to petition for a formal grievance procedure or even a fair hearing, thereby disrupting the continuity of health care and defeating the purposes of managed care.

“Change of Plan” forms should be provided to all enrollees with their member handbooks when they enroll, and the forms should be made available throughout the community.

Department of Health Services, supra note 51.

States may provide behavioral health care through a system separate from the managed care program that provides for recipients' physical health care, thereby creating the potential for confusion as individuals go between two different systems for their various health needs.

Letter from Drapala Gale A. , Deputy Director, Office of Managed Care, Health Care Financing Administration, to Stangler Gary J. Director, Missouri Department of Social Services, Sept. 29, 1995.

Patient Fairness Act (1995): Hearings on S.B. 764 Before the Committee on Public Health and Welfare, Missouri Senate, 88th Gen. Assembly, 2d Sess. (1995) (testimony of Joel D. Ferber); Shirk M. , “Children Fall Through the Cracks in the New Medicaid,” St. Louis Post-Dispatch, Oct. 22, 1995, at 1D; and Shirk M. , “State Fails to Inform Medicaid Patients of Exemptions to HMOs,” St. Louis Post-Dispatch, Dec 19, 1995, at 1B.

For a discussion of the special problems posed by enrolling persons with disabilities in managed care plans, see: Consortium for Disabilities Health and Long Term Services Task Forces, 104th Cong., 1st Sess. 11–15 (1995) (testimony submitted to the House Commerce Committee, on Medicaid Revision); Families USA Foundation, States of Health: Managed Care: Serving the Chronically Ill and Disabled, 5, no. 6 (1995): 1–5; Fox H. , An Examination of HMO Policies Affecting Children with Special Needs (Washington, D.C.: Fox Health Policy Consultants, Sept. 1990); Regenstein M. Meyer J. , Economic and Social Research Institute, Low Income Children with Disabilities: How Will They Fare Under Health Care Reform? (Portland: National Academy for State Health Policy, 1994): At 15; and Subcommittee on Medicaid and Health Care for Low-Income Families, Committee on Finance, U.S. Senate, Medicaid Managed Care: Serving the Disabled Challenges State Programs (Washington, D.C.: General Accounting Office, GAO/HEHS-96-136, July 1996).