The use of managed care within Medicaid, a joint federal-state program that finances health insurance for certain low-income families with children and individuals who are aged or disabled, increased significantly during the 1990s. By 2003, 59 percent of Medicaid beneficiaries were enrolled in managed care, compared with less than 10 percent in 1991. Medicaid managed care, under which states make prospective payments to managed care plans to provide or arrange for all services for enrollees, attempts to ensure the provision of appropriate health care services in a cost-efficient manner. However, because plans are paid a fixed amount regardless of the number of services they provide, managed care programs require safeguards against the incentive for some plans to underserve enrollees, such as by limiting enrollees' access to care. Access is also affected by other factors, such as physician location and willingness to participate in managed care plans. Safeguards to ensure enrollees have access to care could include requiring plans to maintain provider networks that provide enrollees with sufficient geographic access to providers or requiring managed care plans to develop and monitor certain quality indicators, such as enrollee satisfaction surveys or grievances. The Balanced Budget Act of 1997 (BBA) gave states new authority to require certain Medicaid beneficiaries to enroll in managed care plans and also required the establishment of consumer protections for Medicaid managed care enrollees in areas such as access to and quality of care. In June 2002, the Centers for Medicare & Medicaid Services (CMS) issued final regulations for Medicaid managed care organizations (MCO) to implement these BBA requirements. The BBA directed us to examine the access and quality requirements applicable to MCOs operating under the Medicare program and to private sector MCOs to determine their relevance to the Medicaid MCOs. As discussed with the committees of jurisdiction, we examined the extent to which Medicaid MCO requirements specifically address the needs of enrollees who are low income, have special cultural needs (such as language differences), or have special health care needs (such as chronic illnesses or disabilities) in comparison to similar requirements applicable to Medicare and private sector MCOs.

Medicaid MCO access and quality requirements specifically address the needs of managed care enrollees who are low income or have special cultural or health care needs, to an equal or greater extent than requirements applicable to Medicare and private sector MCOs. Regarding low-income enrollees, neither Medicare nor private sector requirements specifically address their needs as distinct from those of other enrollees. However, we identified one area that is key to access for low-income enrollees--transportation. Medicaid regulations and Medicare guidelines require that when developing their provider networks MCOs take into account the means of transportation--such as public transportation--enrollees use to access health care providers. No such explicit requirement applies to private sector MCOs. Regarding the cultural and language characteristics of enrollees, Medicaid regulations are more specific than Medicare and private accreditation requirements. While all requirements broadly state that services must be delivered in a "culturally competent manner," only the Medicaid regulations require that the primary language spoken by each individual be identified at the time of enrollment and that each managed care enrollee be provided with the names of and non-English languages spoken by contracted health care providers in the enrollee's service area. Additionally, Medicaid regulations require states to make oral interpretation services available and require that each MCO make these services available free of charge to each enrollee and potential enrollee. Regarding enrollees with special health care needs, Medicaid requirements are generally comparable to Medicare and private accreditation requirements. All require that individuals with special health care needs--such as chronic illnesses or disabilities--be identified and provided with appropriate services for managing these conditions.