1

“In order to preserve the historical data from the Devolution Initiative, the “W.K. Kellogg Foundation Devolution Team”, have captured the key content from grantee publications as of March 2004. In this process, we have attempted to accurately capture the context, but in some cases, links may be broken and images may not display properly. If you have questions about this publication or if you want to see if there have been any updates to the document, we suggest you contact the organization directly.”

A Guide to Marketing and Enrollment in Medicaid Managed Care

Families USA Foundation June 1997

This guide is posted here as a single document with the exception of the Appendix which is posted as 3 separate documents, and the Fact Sheet, which is also separate. A hard copy of the guide which includes the Fact Sheet and the full, pull-out appendix is available at a cost of $20.00. To order, send check or money order payable to Families USA Foundation to: Marketing and Enrollment Guide, c/o Families USA, 1334 G St. NW, Washington, DC 20005.

About This Series Credits

TABLE OF CONTENTS

FACT SHEET

INTRODUCTION

MARKETING MEDICAID MANAGED CARE

Marketing: Common Problems Marketing Commissions Door-To-Door Marketing Enrollment in Food Stamp and Welfare Offices Misleading Marketing Materials The Costs of Marketing Abuse Marketing: How States Have Addressed the Problems Prohibit Direct Marketing Limit Direct Marketing

OUTREACH AND ENROLLMENT

Outreach and Enrollment: Common Problems High Default Assignments Inadequate Requirements for Enrollment Brokers Inadequate Cultural and Linguistic Standards for Enrollment Counselors

1

Inaccurate Lists of Provider Networks Outreach and Enrollment: How States Have Addressed the Problems Allow Time to Educate the Community about the New System Provide Both Written and Oral Information Use Neutral Counselors

WHAT ADVOCATES CAN DO

Advocate through the Waiver Process Advocate for Consumer Protections in State Laws, Regulations, and Contract Provisions Request State and Federal Investigations Conduct a Media Campaign Encourage the City or County to Intervene File a Lawsuit Mount Consumer Education and Monitoring Campaigns

ENDNOTES GLOSSARY APPENDIX: Provisions of State Enrollment Broker RFPs Part 1: Written Materials, Responsibility for Furnishing Information About Plans' Providers, Mailing & Follow-Up Responsibilities

Part 2: Phone Requirements, Outreach, In-Person Counseling, Computer Capabiliy

Part 3: Broker Staff Training, Cultural/Linguistic Requirements, Other Comments

.

Introduction

Many state governments are now in the process of moving some or all of their Medicaid beneficiaries out of the traditional fee-for-service program and into managed care. Currently, only states with waivers of federal Medicaid law can compel Medicaid recipients to enroll in managed care. States without waivers may offer managed care as an alternative to fee-for-service arrangements. Making sure that each Medicaid beneficiary moved into managed care is enrolled in an appropriate plan is not an easy task: too often, the task is made impossible when states fail to protect Medicaid beneficiaries from managed care marketing and enrollment abuses. Medicaid managed care marketing and enrollment can go awry for several reasons. First, fiscal pressures lead some states to implement Medicaid managed care too hastily. States have looked to managed care to save money in their Medicaid programsCbetween 2 percent and 11 percent of projected spending. In their rush to achieve these savings, some states have taken too little time to educate the public about managed care or to institute careful marketing and enrollment procedures. Second, in states where managed care enrollment is voluntary, state officials may perceive conflicts between regulating plans' marketing practices and maximizing managed care enrollments. In some of these states, officials have been reluctant to regulate managed care

1

plans' marketing practices strictly, fearing that without aggressive marketing, managed care enrollment will not grow as fast as hoped and, in consequence, the anticipated Medicaid savings will not materialize. Third, the federal government does little to regulate Medicaid marketing and enrollment. Federal regulations do not, for example, prohibit health maintenance organizations (HMOs) serving Medicaid beneficiaries from marketing door-to-door, prohibit them from making gifts or payments to induce enrollment, or require advance government approval of marketing materials. In contrast, federal regulations for HMOs serving Medicare beneficiaries prohibit door-to-door marketing and enrollment inducements worth more than $10 and require prior federal approval of plan marketing materials. This guide looks at the kinds of marketing and enrollment problems in Medicaid managed care that have occurred in some states and discusses ways that states have addressed problems. It also suggests advocacy strategies for community organizations wishing to improve Medicaid managed care marketing and enrollment in their states. The guide is based on both a literature review and interviews with advocates and officials in selected states.

.

Marketing Medicaid Managed Care

States often permit Medicaid managed care plans to market directly to beneficiaries, reasoning that direct marketing is the most efficient way to encourage enrollment in voluntary Medicaid managed care programs and the easiest way to educate beneficiaries in mandatory systems. Unfortunately, many states have not exercised sufficient oversight of managed care marketing to Medicaid beneficiaries, opening the floodgates to potential marketing problems. This section describes the types of marketing fraud and abuse that have occurred and the ways some states have addressed these problems. Federal Medicaid regulations address only general marketing practices. They require managed care plans to provide potential enrollees with written information about benefits, services, and the plans' rules and procedures. Plans must not misrepresent themselves to individuals or the government. Managed care organizations must accept all eligible applicants during open enrollment periods, and they cannot discriminate based on health status. State Medicaid agency contracts with managed care plans must specify how the agency will ensure that marketing practices will not mislead, confuse, or defraud Medicaid beneficiaries. Aside from these general requirements, the federal government allows states to set their own marketing rules and enrollment procedures, giving them "guidelines only," not "mandatory standards."1

CASE STUDY: NEW YORK Direct Marketing-At What Cost?

New York banned direct enrollment by Medicaid managed care plans in 1995 in the wake of marketing abuses and access problems. Enrollment in managed care plans plummeted. Advocates say that enrollment dropped because Medicaid managed care plans did not have enough providers to serve Medicaid patients. Representatives of managed care plans contend that managed care enrollment dropped because they were no longer able to advertise their services. Concerned with the Medicaid budget, which assumed that New York would save money when beneficiaries enrolled in managed care, New York state officials lifted the bans on direct enrollment and marketing in 1996. Source: Esther Fein, "Managed Care for Needy: Giuliani's Unrealized Plan," New York Times, May 25, 1996; Letter from Ellen Anderson, Office of Managed Care, NY State Dept. of Health, to Rachel Block, Office of Managed Care, Health Care Financing Administration, April 30, 1996.

1

Marketing: Common Problems A number of states have experienced serious problems when managed care plans were directly marketed to Medicaid beneficiaries. Unless states specifically prohibit these practices, managed care plans may hire sales agents on commission, solicit managed care enrollments door-to-door and in welfare offices, and offer gifts to entice enrollments. Documented problems range from confusion when Medicaid beneficiaries do not understand that they may choose between several managed care plans or do not receive adequate information about the benefits and consequences of choosing a particular plan to cases of outright marketing fraud. Plan marketing materials can also mislead and confuse Medicaid beneficiaries, and they therefore warrant careful review by state agencies.

Marketing Commissions Medicaid managed care plans have strong financial incentives to enroll as many Medicaid beneficiaries as possible. Because they are paid a fee for each person enrolled--rather than a fee for each service provided--they make more money by signing up more people. For this reason, plans often reward marketing departments and agents based on the number of new enrollees, whether or not these enrollees understand what they have signed up for. In some cases, half of the earnings of managed care sales agents come from commissions paid by plans for each new enrollee. The payment of a commission for new enrollees is an invitation to serious marketing problems. Both Tennessee's and Florida's Medicaid managed care marketing programs have documented unscrupulous sales practices .

Door-To-Door Marketing Because a state has no way to monitor what goes on in a person's home, door-to-door marketing is especially open to abusive sales practices. In the privacy of someone's home, agents have misled beneficiaries about what benefits a plan offers or whether they had to enroll in a particular plan to keep their Medicaid benefits. Agents have enrolled people who obviously did not understand what enrollment means. They have offered cash gifts to entice enrollments, even if this practice was not authorized by the managed care plan. Abuses by door-to-door sales agents have been reported in many states, including California, Florida, Illinois, Tennessee and Virginia. The federal Health Care Financing Administration (HCFA), which oversees the Medicaid program, has noted problems with door-to-door marketing, but the agency has not insisted that states prohibit this practice (see boxes).

CASE STUDY: ILLINOIS Door-to-Door Marketing Abuse

Doran Baker had long been a patient of the City of Chicago's South Side Clinic when she was visited at home by a representative of an HMO, who claimed to be from the Illinois Department of Public Aid. The representative told Ms. Baker that she was required to sign up for the managed care plan, that the HMO would cover transportation, and that if she was dissatisfied, she could quickly disenroll. When Ms. Baker tried to use the HMO's services, she found that the promised free transportation was not provided, and she had to wait two to three hours for scheduled appointments. Moreover, she had to pay for childbirth-related items that the HMO marketing agent said were covered. Ms. Baker decided to disenroll. She called the HMO three times to disenroll, but the HMO's toll-free phone lines were busy or answered with a recording. Source: Illinois Campaign for Better Health Care and Families USA's Center for Community Health Action, Illinois Managed Care Marketing Abuses: Dangerous Precedent, Dangerous Future (Champaign, IL: The Campaign for Better Health Care, May 1996), p. 7.

1

.

CASE STUDY: CALIFORNIA HCFA Notes Door-to-Door Marketing Problems

The Health Care Financing Administration (HCFA) reviewed California's Medicaid ("Medi-Cal") managed care program in 1993. HCFA reviewers, noting that door-to-door marketing was the "primary source of [enrollment] abuses," urged the state to expedite its plans to prohibit door-to-door marketing and hire a statewide enrollment contractor. California did not act on HCFA's suggestion. In 1995, citing marketing abuses and delays in processing disenrollments, consumer advocates sued California for "lax oversight" of the Medi-Cal program. "Marketing agents for HMOs have tracked down Medi-Cal recipients at their homes, aboard buses, and at check cashing outlets and welfare offices," the Los Angeles Times reported in 1996. Marketing agents also lied to Medi-Cal beneficiaries by telling them they would lose medical benefits if they didn't join a plan or that the HMO would let them see any doctor they wanted. Agents offered beneficiaries cash payments to enroll in plans. California legislation finally went into effect in July 1996 prohibiting door-to-door marketing and banning HMOs from directly enrolling Medicaid patients. Source: David Olmos, Los Angeles Times, September 27, 1995 and July 21, 1996; Health Care Financing Administration, "Review of California's Administration of its Medicaid Managed Care Program," Medicaid Review Report, Fiscal Year 1993, HCFA Region IX.

Enrollment in Food Stamp and Welfare Offices Some states that prohibit door-to-door marketing nevertheless permit plans to send marketing agents to food stamp and welfare offices to enroll Medicaid beneficiaries. This practice, too, lends itself to abuse. When marketing agents set up in public assistance offices, people may assume they have official status or backing. Beneficiaries often believe their food stamps or public assistance benefits will be affected if they do not sign up with a particular plan. For example, according to the New York City Office of the Public Advocate, in the summer of 1995, HMO representatives stationed in public assistance offices told Medicaid recipients that they would lose their Medicaid benefits if they did not sign up with the HMO's managed care plans.2

CASE STUDY: FLORIDA Marketing in Food Stamp Offices

"The scramble to sign up Medicaid recipients [was] so frantic in South Florida that every month officials [had to] approve a complex schedule granting equal selling time to more than a dozen HMOs eager to solicit welfare clients at the area's 22 food stamp offices. . . . Celina Larios had no idea the paper she signed at the food stamp office in Miami was a Medicaid HMO enrollment form. The woman who sat at the booth simply told her that if she wrote her name, she would get free diapers, free medicine and free transportation to a clinic. . . . Larios glanced at the . . . form before signing it. . . . She cannot read. . . . But Larios is proud she can write her name. So she did." After enrolling, Larios was unable to use the services because the HMO center near her home closed. It took her months to disenroll. Source: Jenni Bergal and Fred Schulte, "HMO sign-up abuses still a chronic problem," Fort Lauderdale Sun-Sentinel, December 14, 1994.

CASE STUDY: ILLINOIS Marketing in Welfare Offices

1

The Illinois Medicaid agency gave preference to one HMO, allowing it to market in Chicago welfare offices. Legal Assistance Foundation of Chicago wrote to HCFA in 1995 that "to have one HMO present in the offices obviously gives that HMO a prominent vantage point to enroll clients. It also gives the appearance that the Illinois Department of Public Assistance is encouraging or even requiring recipients to join that HMO." Source: Letter from Stephanie Altman, Legal Assistance Foundation of Chicago, and Linda Zazove, Land of Lincoln Legal Assistance Foundation, to Gina Clemons, Health Care Financing Administration, January 24, 1995.

If some but not all managed care plans are permitted to market in food stamp and welfare offices, the plans with marketing privileges have an unfair advantage and may appear to have the state's endorsement. Beneficiaries may choose the most visible plan instead of the plan that best meets their needs. On the other hand, if states grant equal marketing time to each managed care plan, state agencies may be faced with chaotic scheduling.

Misleading Marketing Materials Marketing materials for managed care plans, like marketing agents, can mislead Medicaid beneficiaries and misrepresent or distort the benefits of enrollment in the plans. For example, as the accompanying text boxes illustrate, advertisements can falsely imply that joining a particular HMO is the only means of preserving Medicaid coverage. Advertising can also lure Medicaid beneficiaries into well-known plans that serve commercial enrollees, giving them the mistaken impression that they will see the same providers and enjoy the same benefits as commercial enrollees. Actually, HMOs in some states use totally different pro-viders for their plans serving Medicaid beneficiariesCand Medicaid beneficiaries may be completely unaware of this.

CASE STUDY: PHILADELPHIA Misleading Marketing Materials

Health Partners, which was seeking a contract with the state to serve Philadelphia Medicaid beneficiaries under a mandatory managed care program, placed the following sign in a pediatric clinic: "Attention: Medical Assistance may no longer be in effect after September 1994. See the Health Partners representative." Source: Walter Roche, Jr.,"Competing to Provide Health Care to the Poor," Philadelphia Inquirer, October 5, 1994.

CASE STUDY: FLORIDA Inappropriate Marketing Incentives

In 1993, door-to-door marketers with the Community Medical Plan in Florida earned $15 a head for their first 49 Medicaid enrollees and $40 a head if they enrolled 101 or more new members within a month. The top sales agents won a one-week cruise for two. The HMO, which served 25,000 Medicaid patients, spent $400,000 for a television ad campaign in 1994. In the last quarter of 1993, 51 percent of Community Medical Plan's Medicaid payments were spent on administrative costs. Source: Fred Schulte and Jenni Bergal, "Top Sales Agent Won Cruise on Taxpayers' Tab" and "Healthy Profits," Fort Lauderdale Sun-Sentinel, December 14, 1994 and December 12, 1994.

1

CASE STUDY: NEW YORK Advertising Invokes Reputations of Commercial Plans

The Public Advocate for New York City reviewed marketing materials used by 12 Medicaid managed care plans in 1995 and compiled marketing materials which had the potential to be misleading, including the following: "New Yorkers Agree Oxford Health Plans is #1" (written on a Medicaid flier). In fine print, the flier explained that the rating was based on a survey "conducted with the assistance of employers seeking to determine employee satisfaction with various health plans." The Oxford plan surveyed, the Oxford Freedom Plan, was a plan with a point-of-service option available to commercial enrollees. The Oxford plan available to Medicaid beneficiaries had no point-of-service option. "You not only have Medicaid, you have U.S. Healthcare" (U.S. Healthcare Medicaid Handbook). In fact, Medicaid beneficiaries could only choose certain doctors in the plan who agreed to accept Medicaid. Source: Mark Green, Managed Confusion: How HMO Marketing Materials are Tricking the Elderly and the Poor (New York City: Office of the Public Advocate, November 1995), pp. 8-10.

The Costs of Marketing Abuse The failure by states to regulate marketing can be costly. If direct marketing of plans is permitted, for instance, managed care plans may divert large sums of money to advertising and marketing that could otherwise go to patient care. When sales agents submit fraudulent enrollments or enroll people who cannot really use the services, Medicaid programs end up making monthly payments to plans for services that are not actually rendered. For example, agents of one Tennessee plan enrolled prisoners at the county jail, who were ineligible for Medicaid benefits. These agents also enrolled thousands of supposedly homeless individuals whose identity, residence, and eligibility could not be verified. In 1995 the State of Tennessee, alerted by shelters that began receiving large numbers of enrollment cards, audited the plan and found that sales agents had used fraudulent or abusive tactics to enroll about 4,800 individuals. The state prosecuted agents and recouped over $1.9 million in payments made for fraudulent enrollments.3 Misleading marketing by commercial plans also burdens safety-net providers, such as community clinics. Many Medicaid beneficiaries who traditionally have used community clinics for care enroll in commercial plans without realizing that they now must see the doctors in their new plan. When they get sick, they return to the community clinic for care. The clinics then face a dilemma. Either they must turn away their long-standing patients or they must continue to provide care without Medicaid reimbursement. As providers of last resort, many clinics elect to continue providing care.4 Marketing abuse has a human cost as well, especially for people who need ongoing health care for illnesses or disabling conditions. Such people may enroll in new plans without understanding that they will no longer have access to their current providers. When this happens, their care is often disrupted.

.

CASE STUDY: VIRGINIA Man's Treatment Disrupted Due to False Marketing Claims

1

Medicaid beneficiaries in Virginia's Tidewater area were promised hair-care products, free diapers and chicken dinners by salespeople for managed care plans seeking their enrollment. Some door-to-door salespeople falsely promised that patients could stay with their longtime doctors. One 32-year-old Virginia Beach man with schizophrenia had his therapy disrupted when the HMO he chose unexpectedly made him switch the physician and medication he had used for a decade. Source: Spencer Hsu, "Managed Care for the Poor Tough to Manage, Va. Finds," Washington Post, April 29, 1996.

Marketing: How States Have Addressed The Problems Some states have addressed plan marketing problems head-on by prohibiting all marketing by Medicaid managed care plans. Other states, especially those with voluntary programs, have chosen a more limited response--allowing plans to continue marketing but prohibiting or regulating some of the worst practices. States can control marketing practices through their contracts with managed care organizations, through legislation, and through regulations.

Prohibit Direct Marketing The surest way to eliminate marketing abuses is to prohibit direct marketing by managed care plans. Massachusetts prohibits all direct marketing by Medicaid managed care plans, while a number of states severely restrict direct marketing. In states that restrict direct marketing, the Medicaid agency produces marketing materials (with input from the plans), and either the state agency or a contractor acts as a "neutral enrollment broker." The enrollment broker provides outreach and counseling to Medicaid beneficiaries and processes enrollments (see Outreach and Enrollment).

Limit Direct Marketing States that are unwilling to eliminate all direct marketing can still address some of the worst abuses. They can:

1. ban marketing door-to-door and in food stamp and welfare offices, 2. set standards for marketing representatives and place limits on commissions, 3. prohibit or limit enrollment inducements, 4. regulate the content of marketing materials, 5. audit the enrollments that were initiated by the plans themselves, and 6. use contracts and legislation to address marketing problems.

1. Ban marketing door-to-door and in food stamp and welfare offices: In 1995, nine states and the District of Columbia permitted door-to-door solicitation by managed care plans marketing to Medicaid beneficiaries.5 As of June 1997, Illinois (one of the nine) still permits door-to-door marketing, but door-to-door marketing will be prohibited when its new 1115 waiver is implemented. Door-to-door marketing is now prohibited in some areas of Pennsylvania (another of the nine states). Since many states have prohibited door-to-door marketing through contracts with HMOs rather than by law, advocates need to continue monitoring this issue. States have also moved to restrict direct marketing by managed care plans in food stamp and welfare offices. Florida, for example, which previously allowed marketing in food stamp and welfare offices, prohibited the practice in 1996 in response to problems. 2. Set standards for marketing representatives and place limits on commissions: Some Medicaid agencies that allow plans to use marketing representatives have taken steps to curb potential abuses. The American Public Welfare Association and the National Academy for State

1

Health Policy list the following actions taken by one or more states:6 setting standards for marketing representatives and requiring them to pass an exam; surveying all new enrollees to ensure they understood the plan they selected before finalizing

enrollments; prohibiting the payment of a commission for each beneficiary enrolled and requiring plans to

pay agents on salary instead;7 requiring plans to withhold payment of commissions or bonuses until an enrollee has remained

in the plan for a specified period of time; allowing new enrollees a grace period of 30 days from the time they first use a plan's services,

during which they can change plans on request; and reviewing complaints about marketing representatives and ensuring that plans correct both

individual problems and any systemic marketing problems. HCFA's 1993 review of California's managed care program suggests that states should also ensure that marketing representatives dismissed from one plan due to misleading marketing are not hired by another plan marketing to Medicaid beneficiaries in the state.

3. Prohibit or limit enrollment inducements: For persons living in or near poverty, even gifts of limited dollar value can entice enrollments that are not in their best interests. Although HCFA recommends limiting enrollment inducements to gifts valued at $10 or less, some states, such as Tennessee and Missouri, entirely prohibit enrollment inducements. Tennessee does allow plans to provide incentives to members to follow through with preventive health care, and Missouri allows plans to provide enhanced benefit packages. States and consumer organizations should look carefully at plan benefits and marketing materials to determine what is an appropriate benefit that plans should advertise and what is an inducement that may lead beneficiaries to choose plans that do not meet their health care needs. Managed care providers can expand beyond the basic Medicaid package--for example, offering prenatal exercise classes or smoking cessation clinics. But other additional benefits may have questionable value for maintaining health: In one state, advocates questioned the prominent advertisement of free Boy Scout memberships and "Your own private phone message line: so your doctor, or even your friends, can leave messages for you."8

4. Regulate the content of marketing materials: HCFA Medicaid marketing guidelines suggest that state contracts with managed care plans require the plans to submit all marketing materials to the state for preapproval. The guidelines urge states to ensure that materials are easy to read and understand and that they are translated for any language group representing at least 10 percent of Medicaid beneficiaries in the service area.9

CASE STUDY: TENNESSEE Regulation of Marketing Materials

Tennessee has set the following standards for marketing materials: The state must preapprove written materials. Materials cannot mislead, confuse, or defraud. Materials must be written on a reading level no higher than 6th grade. Enrollment forms cannot be attached to marketing

materials. If the plan is advertising special benefits, it must explain clearly which health services are

required by the state and which are additional benefits. Materials cannot give the appearance that the state endorses a particular plan. For instance,

plans cannot display the state seal on their materials. Since Tennessee's TennCare program requires certain people to pay premiums, plans cannot

use the word "free" on their marketing materials. If plans fail to comply with these or other marketing restrictions, Tennessee may suspend new

enrollments, notify misinformed enrollees that they may disenroll, and/or withhold capitation

1

payments. Source: Memo from Manny Martins, Bureau of TennCare, State of Tennessee, to TennCare MCOs, January 17, 1995, on Marketing Guidelines (TSOP 008).

States should review marketing materials carefully to ensure that they do not mislead beneficiaries about which providers might serve them, what the services cost, or what benefits beyond those required by Medicaid are offered by a plan. Additionally, states should ensure that marketing materials do not imply that a person must join a particular plan to maintain his or her Medicaid benefits or that the state endorses a particular plan. States should establish advisory committees of consumers and consumer representatives to review marketing materials, flag misleading claims, and determine whether materials are easy to understand. States such as Rhode Island, which prohibit most direct marketing by managed care plans, compile plans' written descriptions and prepare written materials themselves to help new enrollees choose plans (see Outreach and Enrollment). 5. Audit enrollments initiated by the plans: States that allow managed care plans--rather than brokers or state agencies--to enroll Medicaid beneficiaries should interview new enrollees to ensure that they understood they were joining a managed care plan; that they were told they had choices among plans and, if enrollment was voluntary, to remain in fee-for-service Medicaid; and that they were told how to access care and how to file complaints. In New Jersey, if beneficiaries are enrolled directly by plans, a neutral health benefits counselor must screen enrollees to be sure they understood their decisions. About 30-40 percent of enrollments in New Jersey are initiated by health plans and screened by enrollment counselors, while the others are initiated by enrollment counselors.10 When New York City lifted bans on direct marketing by plans in 1996, the Medicaid agency began auditing enrollments. New York City administers a telephone questionnaire to a random sample of enrollees with each managed care plan. If this audit shows that a plan is misinforming applicants, enrollees are permitted to disenroll, and the managed care plan must explain how it will correct its marketing and enrollment procedures.11

CASE STUDY: FLORIDA Legislation to Limit Marketing

In 1994, the Fort Lauderdale Sun-Sentinel and a state investigation uncovered widespread abuse and improper marketing practices by many Medicaid HMOs. In 1995, when the Florida State legislature failed to act to prevent marketing abuses, the Medicaid agency added provisions in contracts with HMOs that banned them from marketing at food stamp offices, conducting door-to-door canvassing, and offering gifts as incentives to join plans. New enrollees were given a 10-day period in which to change their minds about enrolling in managed care plans. To counteract the HMO industry's pressure on the state to lift the ban on door-to-door marketing, consumer groups pressed for legislation. In 1996, Florida enacted a law (S 886) which prohibits plans from discouraging enrollments based on health status; prohibits door-to-door marketing, misleading or confusing marketing, and enrollment inducements; and fines agents and managed care plans for violating these provisions.

6. Use contracts and legislation to address marketing problems: States have a number of tools at their disposal to control marketing practices. They can enact legislation that governs Medicaid managed care or managed care in general, and they can issue regulations. Contracts with managed care plans can be an especially important tool to protect Medicaid beneficiaries

1

when legislators are reluctant to enact strong legislation. Another mechanism to limit marketing practices is a state HMO law that applies to HMOs serving people with private coverage as well as Medicare and Medicaid enrollees. In a 1995 study of consumer protections in state HMO laws, the Center for Health Care Rights found that 32 states required licensure of marketing agents; 47 states prohibited false and misleading marketing; 39 states required prior state approval of marketing and enrollment materials; and 21 states required HMOs to provide cancellation periods during which individuals could inspect and cancel enrollment contracts for any reason.12 In some states, general HMO laws may not apply to Medicaid managed care plans. For example, states may give newly formed Medicaid managed care plans several years to comply with state HMO laws; or a state law might narrowly define "HMO" to mean a fully capitated plan, and the state's Medicaid managed care plans may only be partially capitated. When general managed care laws do not apply to Medicaid plans, Medicaid contract provisions, additional regulations, or legislation are essential.

.

Outreach and Enrollment

Even when marketing is regulated, states may fail to adequately inform Medicaid beneficiaries of the move to managed care or the importance of choosing a plan. When they choose their plans, Medicaid beneficiaries can choose among provider networks and may have choices of "add-on" benefits (such as adult dental care or van transportation to medical appointments) that may not generally be offered under their state's Medicaid program. In states that mandate managed care but do a poor job of outreach, few people affirmatively select managed care plans. Instead, the states assign people to plans through "default" enrollment procedures--that is, the state assigns people to plans either randomly or according to a formula. In the worst cases reported to date, as much as 88 percent of the Medicaid managed care population is assigned by default. When Medicaid beneficiaries are assigned by default, they may be unable to continue with physicians who had treated them before enrollment in managed care. States that invest in outreach and enrollment have been able to reduce default enrollment rates to 10 percent. In these cases, enrollees often are able to continue with the same doctors who treated them under fee-for-service Medicaid.

Some states also fail to adequately educate beneficiaries about how to get care under a managed care system. When Medicaid beneficiaries do not understand how to use a new managed care plan, they may go to the same clinics they have always used only to learn that their new plan does not include these providers. This section describes the problems resulting from poor outreach and hasty managed care enrollment. Then it describes how states can address enrollment problems and assist Medicaid beneficiaries in selecting plans that will best meet their needs.

In their haste to implement managed care, states may enroll Medicaid beneficiaries in managed care plans so rapidly that recipients are uninformed about the plans. For many people, this can lead to seriously disrupted care.

Outreach and Enrollment: Common Problems

High Default Assignments to Low-Bidding Health Plans

In selecting which managed care plan(s) will get the "default" assignments (sometimes called "auto-assignments"), some states pick the lowest-priced HMOs. Default assignment may cause a

1

Medicaid recipient to abandon his or her established relationship with a physician or cause a Medicaid recipient to receive care at an HMO in a location that is difficult to reach. Managed care plans are often eager to accept default assignments: People who do not choose their own plans but instead are assigned to plans tend to use services less than those who select their own plans. As a result, managed care plans are more likely to reap windfall profits from default assignments. Managed care plans also increase their power to negotiate better prices in the health care marketplace as they become larger companies that cover more people. If default assignments are given to the lowest bidder, plans may purposely bid low for Medicaid contracts, undercutting managed care plans whose rates would better cover state-mandated services to Medicaid beneficiaries.

Inadequate Requirements for Enrollment Brokers A number of states contract with private firms to enroll Medicaid beneficiaries in managed care. This helps to protect beneficiaries from marketing abuses, since they receive advice about plan choices from neutral counselors rather than from self-interested managed care plans. However, unless states put adequate minimum requirements in their contracts with enrollment brokers, the firms may have too few staff and telephone lines to counsel Medicaid beneficiaries and may be unable to furnish updated information about the providers in each plan. Without adequate contract standards, states pay for counseling sessions that do not really help people choose appropriate health plans. A few states with voluntary managed care enrollment have paid brokers based on the number of people who select plans. With this financial incentive, brokers may not offer neutral counseling about whether managed care or fee-for-service can best meet the needs of a particular Medicaid beneficiary. Synopses of Requests for Proposals (RFPs) used by some states are in the Appendix.

.

CASE STUDY: SACRAMENTO COUNTY, CALIFORNIA Care Disrupted When Patients Are Enrolled Too Rapidly in Health Plans

California contracted with Health Choice, Inc. (now called "Benova"), a private firm, to enroll 150,000 Sacramento County Medi-Cal beneficiaries in managed care plans. Health Choice, Inc. was supposed to send notices to Medi-Cal beneficiaries in February 1994, process enrollments mostly by mail, and make default assignments beginning April 1, 1994 if people had not selected a managed care plan by then. The enrollment process was "chaotic." Information developed by the state and mailed by Health Choice, Inc. did not list the doctors participating in each plan. When people tried to call Health Choice, Inc., lines were often busy, they were placed on hold, or their phone calls were not returned. In recognition of the confusion, the California Department of Health Services (DHS) decided to allow health providers to assist patients in completing enrollment forms. This made matters even worse. People who saw several doctors enrolled in several health plans. Health Choice, Inc. received 400,000 enrollment forms for 150,000 people. Serious disruptions of care took place. One patient was told to join Plan X to continue seeing her specialist. Once she joined, she found out that the specialist was not in the plan and that it would take her 45 days to disenroll. Meanwhile, she could not get authorization for needed injections when her hemoglobin levels dropped. Because of the many enrollment problems, the Sacramento Board of Supervisors requested, and DHS granted, a delay in default assignments for 90 days. However, the state continues to have serious enrollment problems.

1

Source: Sacramento County Commission on DHS Geographic Managed Care Program, "Report to County Board of Supervisors," August 23, 1994; and Mathematica Policy Research, Inc., Managed Care and Low-Income Populations: A Case Study of Managed Care in California (Menlo Park, CA: Henry J. Kaiser Family Foundation and The Commonwealth Fund, May 1996).

.

CASE STUDY: MISSOURI Potential Profits from Default Assignments

Missouri planned to enroll 152,000 Medicaid beneficiaries in the St. Louis area into managed care plans beginning May 1, 1995 and auto-assign those who had not selected plans by September. According to Missouri's default assignment formula, 26 percent of auto-assignments would be placed with the lowest-bidding managed care plan. Unfortunately, enrollment counselors were poorly trained, few people attended counseling sessions, and managed care plans failed to furnish lists of participating providers. In August, GenCare, the lowest bidding health plan, expected that half of eligible Medicaid beneficiaries would be auto-assigned; GenCare, which had never served Missouri's Medicaid beneficiaries before, stood to gain $23 million in extra revenue from serving auto-assignments. The St. Louis City Board of Aldermen passed a resolution condemning the enrollment process, calling it "confusing and limited." The City's own Health and Hospitals outreach workers stepped in to fill gaps in Medicaid managed care outreach. In September, Missouri delayed the auto-assignment deadline because about 30 percent of those eligible had not selected plans. The State's Medicaid Director, Donna Checkett, said that "the task of enrolling thousands of Medicaid recipients into an HMO has been difficult and confusing . . . the HMOs themselves have been confused. . . ." Source: Joel D. Ferber, "Auto-Assignment and Enrollment in Medicaid Managed Care Programs," Journal of Law, Medicine and Ethics, 24(1996):99-107; and Denise Smith Amos, "Recipients of Medicaid Get More Time," St. Louis Post-Dispatch, September 15, 1995.

Inadequate Cultural and Linguistic Standards for Enrollment Counselors Some states have insisted that enrollment counseling staff speak the languages of Medicaid beneficiaries and that written materials be easily readable. Other states have ignored cultural and linguistic accessibility (see Appendix). Among the many problems that plagued California's enrollment process in 1996, wrote Latino Issues Forum, were "insufficient bi-lingual counselors" to make enrollment presentations and provide telephone counseling. The Department of Health Services failed to field-test written materials on Medi-Cal consumers, and materials were at too high a literacy level. When mandatory enrollment began in Alameda County, California, a county where over one-fourth of the target population speaks languages other than English, an estimated 70 percent of Medi-Cal managed care enrollees did not choose plans but were instead assigned by default. California contracted with a new agency (Maximus) for enrollment counseling effective January 1997.13

Inaccurate Lists of Provider Networks Beneficiaries often enroll in managed care plans based on the listing of doctors available in the plan. States rely on lists of providers to assess whether or not a plan can handle more patients. Unfortunately, these lists are often outdated or inaccurate. When beneficiaries actually call for physician appointments, they may find that many of the physicians affiliated with a Medicaid managed care plan will not see them. For instance, in 1996, the Delaware Alliance for HealthCare called the physicians listed on the literature of plans serving Delaware Medicaid beneficiaries.

1

They found that the greatest majority of physicians listed either were not accepting new Medicaid patients at all or could not schedule appointments for new Medicaid patients for some time.14

CASE STUDY: CONNECTICUT States Need to Prevent Gaps in Enrollment Programs

In 1995, Connecticut contracted with Benova to enroll Medicaid beneficiaries in managed care plans by mail, by telephone, or in person. The initial contract did not require Benova to assist people in selecting primary care providers, a task left to health plans. When mandatory enrollment began in 1995, Benova received 40,000 calls in one month, more than four times the expected number. Until Benova could add more trained staff and phone lines, phone lines were busy, and beneficiaries were placed on hold for long periods of time and forced to wait up to ten days for return calls. Initially, enrollment counselors had no lists of the doctors participating in some managed care plans. The books listing providers furnished by other plans quickly became obsolete. Health plans reported that new enrollees did not understand managed care and went to providers without referrals. One advocacy organization noted, "This is not surprising given that a family can enroll by mail without any contact with [Benova]." Eventually, Connecticut automated the lists of plans' providers. From February to June 1996, Connecticut amended the contract with Benova, giving the broker responsibility for accessing plans' provider lists by computer and assisting beneficiaries with provider selection as part of enrollment. These steps improved the enrollment process, and in 1996, more than 90 percent of beneficiaries chose their own plans. Source: Judith Solomon, "Medicaid Managed Care in Connecticut: Current Issues Papers One and Two," Connecticut KidsLink October 20, 1995, and information from Paul DiLeo, Benova (formerly called Health- Choice), December 16, 1996.

Outreach and Enrollment: How States Have Addressed The Problems Some states have used their own staff to educate the community about Medicaid managed care and to counsel and enroll Medicaid beneficiaries in plans. Other states have contracted with private firms to provide outreach and counseling. Both of these strategies can work. As shown by low default assignment rates and by reports from both state officials and advocates, states have most successfully addressed enrollment problems by:

allowing time to educate the community about the managed care system, providing both written and oral information to explain the enrollment process and to help people

choose plans, using neutral benefits counselors and ensuring that staff and phone lines are adequate to

counsel beneficiaries about plan choices, establishing standards for enrollment brokers, and considering beneficiaries' interests before making default assignments.

Allow Time to Educate the Community about the New System A successful managed care enrollment process requires a lot of lead time so Medicaid beneficiaries, community organizations, and health providers can be informed about the move to managed care. States that report high voluntary plan selection rates have allowed between 8 and 18 months for outreach before making default assignments. Firms that contract with states to provide outreach and enrollment assistance also recommend beginning community outreach several months before managed care enrollment begins. Outreach techniques include:

sending many written notices to Medicaid beneficiaries,

1

educating community agencies and providers that serve Medicaid beneficiaries,

counseling beneficiaries during Medicaid recertification appointments

making presentations at health fairs,

conducting media campaigns,

canvassing door-to-door by local community groups, and using videos.

CASE STUDY: DISTRICT OF COLUMBIA Use of Videos for Consumer Education

Concerned about past Medicaid managed care problems, the Office of Maternal and Child Health Care in the District of Columbia interviewed Medicaid beneficiaries about managed care problems and then worked with teen actors, doctors, city officials, and Medicaid beneficiaries to produce a video, "Use Your Power: The Key to the Highway of Health with Medicaid Managed Care." The video tells District residents generally how to use managed care and how to get help in solving problems. Consumers tell their peers to "use their power" to get the health care they need. "You don't want to go all across America to get health care for your child," says one woman, urging her peers both to pay attention to Medicaid mail and to get involved in shaping policy. "Don't just sit around and complain to your neighbors. Anybody can complain. It takes people to make a change." Video distributed through the Resource Center, Department of Human Services, 3720 Martin Luther King Jr. Avenue, SE, Washington, DC 20032, (202) 645-0386.

In addition to informing Medicaid beneficiaries about the new managed care program, states should educate community agencies that counsel Medicaid beneficiaries. They should also educate the provider community. Most states require only part of their Medicaid population to enroll in managed care-for example, families with children but not older persons or people with disabilities. If a doctor's receptionist does not understand who is and is not required to enroll in managed care, the doctor's office may mistakenly turn away patients who still have the right to fee-for-service care. Educating providers also helps to maximize the number of doctors who will contract with managed care plans to serve Medicaid patients. Videos can help alert the community to a coming change in Medicaid. Several states use videos to describe plan choices. Videos can also help to educate consumers about potential problems under managed care and their solutions.

.

CASE STUDY: NEW JERSEY Educating the Community Takes Time and Effort

In 14 counties in New Jersey, families with children who receive Medicaid coverage must enroll in managed care plans. Managed care enrollment is voluntary in other counties. Fourteen health maintenance organizations participate in the managed care program, called New Jersey Care 2000. Marketing practices of HMOs are strictly regulated. HMOs cannot market door-to-door or near welfare offices, and they cannot offer enrollment gifts worth more than $10. If a beneficiary is enrolled by an HMO marketer, the enrollment is screened by a neutral enrollment broker, known

1

as the Health Benefits Coordinator. In its RFPs for a neutral enrollment broker, New Jersey set a minimum standard that the majority of Medicaid beneficiaries had to affirmatively select health plans rather than being assigned to them and proposed paying the contractor bonuses when more than 75 percent of enrollees selected plans. New Jersey also required contractors to adhere to telephone accessibility standards. After reviewing several bids for enrollment brokers, New Jersey selected Foundation Health Federal Services to perform outreach, counseling, and enrollment. To carry out these responsibilities, Foundation Health "sets up shop" in a county several months before mandatory managed care enrollment begins. They send beneficiaries at least six letters regarding enrollment requirements, hold health fairs, and hire community organizations to do door-to-door outreach in low-income neighborhoods. Foundation Health sends Medicaid beneficiaries enrollment kits so they can select plans either by mail or through in-person visits with counselors. Counselors use a regularly updated computer database to link beneficiaries to the closest providers and help beneficiaries choose a primary care provider. As of December 1996, an average of 89 percent of enrollees have selected their HMO and picked their own family doctor in those counties where the managed care program is mandatory. A managed care task force and a series of managed care workgroups have helped New Jersey develop cultural competency, quality assistance, and access standards. Benefit counselors must be able to communicate with New Jersey's sizable population of people who do not speak English. In the future, New Jersey plans to issue report cards comparing managed care plans' performance, which will further assist beneficiaries in making enrollment decisions. Source: Information from Laurie Facciarossa, Deputy Project Manager for Health Care Reform, New Jersey Division of Medical Assistance and Health Services, New Jersey Department of Human Services, December 1996; New Jersey Enrollment Broker Request for Proposals.

CASE STUDY: RHODE ISLAND Group Counseling Sessions Educate Beneficiaries

In its first year of operation, Rhode Island enrolled 28,000 families in RIte Care, a managed care program that serves families with children who receive Medicaid and low-income women and children who previously had no insurance. Rhode Island employed 21 neutral enrollment counselors, many of whom were former welfare recipients in a job-training program, and prohibited plans from directly enrolling Medicaid beneficiaries. For three consecutive months, Rhode Island sent notices with welfare checks advising people that they would need to choose a managed care plan when they recertified for Medicaid. In the first few weeks, Rhode Island tried to provide individual counseling sessions for everyone but found this resulted in long waits for recertification and enrollment. Counselors then offered group sessions and mail-in enrollments. A video made by local TV stations told people how to use managed care and choose plans. Counselors used comparison charts prepared by the state that listed sites, participating providers, and procedures for accessing care in each plan. They counseled people to consider plans in which their current primary care physicians participated. The state updated the provider list monthly. Enrollees completed forms with the assistance of counselors, showing which plans each family member's providers had joined. If beneficiaries did not enroll in plans during their recertification appointments, they could schedule another appointment or get information about participating providers by telephone and enroll by mail. As a result of Rhode Island's outreach and counseling efforts, 90 percent of beneficiaries chose their own plans. During the first year, people with mental health needs experienced some problems when they

1

had to choose, for instance, between following their primary care provider or their mental health provider into plans. Rhode Island corrected this problem on a case-by-case basis by allowing some Medicaid beneficiaries with mental health problems to remain in the fee-for-service system. A local advocacy group suggests some further improvements in enrollment to ensure that Medicaid beneficiaries have meaningful plan choices (five plans agreed to accept Medicaid, but three plans had limited slots and filled rapidly); to ensure that people who do not select plans are auto-assigned to plans that are conveniently located; and to better educate enrollees about where to turn when they experience managed care problems. Source: Interviews with Tricia Leddy, Director, Office of Managed Care, Rhode Island Department of Human Services, Spring 1996; and Marti Rosenberg, Ocean State Action, December 1996.

State Voluntary Selection* Education

Strategy Time From Outreach to Default Assignment

Utah 95% Newsletters to beneficiaries; videos; counseling; 18 months voluntary enrollment in primary care casemanagement (PCCM) prior to mandatory HMO enrollment

18 months

Rhode Island 90% Notices with welfare checks each month for three months; video; counseling; voluntary selection during Medicaid recertification periods

4-6 months (2-3 months of pre-enrollment education plus 2-3 months from enrollment to default assignment)

New Jersey 89% Six letters to beneficiaries; community fairs; door-to-door outreach through enrollment broker and community-based organizations; counseling

8 months

Initially, Utah Medicaid beneficiaries could choose between primary care doctors who were paid fees for each service (PCCM) and HMOs. During the 18-month transition period, most doctors who served patients with Medicaid coverage signed up with HMOs, making it possible for these patients to continue seeing their regular doctors under capitated managed care.

In Rhode Island, the state sent notices with families' welfare checks for three consecutive months before enrollment in a new managed care system began. Actual enrollment took place

1

over the course of a year. People usually enrolled in managed care plans at the time they recertified for Medicaid.

During the first phase of its mandatory program, New Jersey's Medicaid agency and its enrollment broker, Foundation Health Federal Services, spent four months educating communities generally about the transition to managed care. The broker then sent notices to beneficiaries about the need to select managed care plans and gave them another four months to make selections before default assigning them. *As reported by the State Medicaid Bureaus.

Provide Both Written and Oral Information that Explains the Enrollment Process and Helps People Choose Plans Prior to enrollment, beneficiaries need written information explaining whether they will need to select a managed care plan; who is not required to select a plan (if some people are exempt from mandatory participation); whether they will be assigned to a plan if they do not make a selection; and what to do and where to call or go for more information. As discussed below, states should not rely only on written notices for this information--the enrollment process is smoothest when it is coordinated with the periodic appointments required to certify eligibility for Medicaid and when states or brokers offer face-to-face counseling and follow-up phone calls. If people do not schedule an enrollment appointment or select a plan after their first notice, they should receive further notices and additional time to select plans. If the state then assigns people to plans, the assignees need further notice about the assignment, about how to use managed care, and about any rights they have to change plans. To aid in enrollment, states can compile materials submitted by plans, or they can produce materials comparing the various plans themselves. Rhode Island provides enrollees with a table comparing plans. Enrollment counselors in Rhode Island help people complete a worksheet listing each family member's doctors and pharmacies and the plans that include each.

Written information should include: names, locations, specialty areas, and qualifications of providers that serve Medicaid

beneficiaries under a plan (this information should be updated regularly); the number to call to find out whether a primary care provider's practice is accepting new

Medicaid enrollees; a list of hospitals affiliated with the plan; an explanation of how to get medicines and the locations of HMO pharmacies, if applicable; any differences in the drugs covered by the plan if the state permits variation; procedures for getting specialty services; a list of any services not provided through the plan itself but that members may still obtain under

Medicaid and an explanation of how to get those services; any additional benefits, such as van transportation to doctor appointments or child care during

doctor appointments, provided by the plan; procedures for getting emergency care; a simple explanation of how managed care plans differ in structure, etc.; an explanation that people may receive family planning and reproductive health services at the

provider of their choice unless the state has been granted an 1115 waiver by the federal government that specifically waives this choice;

complaint and grievance procedures; and where to call with questions.

1

Use Neutral Counselors to Advise Beneficiaries of Plan Choices At least 12 states use private "enrollment brokers" or "health benefits counselors" to advise Medicaid beneficiaries about their managed care plan choices and to assist them in enrolling in a plan. Other states that ban direct marketing or enrollment by health plans use human services agency staff as neutral benefits counselors. Is it better for a state to contract with an enrollment broker firm or to hire enrollment counselors directly? That answer depends partly on the state's capabilities. If the Medicaid agency does not normally perform outreach well, does not have adequate phone systems for handling inquiries, and does not have good computer systems that can match Medicaid beneficiaries with accessible plans and providers, a contract with an enrollment broker may be a better approach. On the other hand, if states have performed outreach well in the past and can assign enough staff to act as enrollment counselors during heavy enrollment periods, it might be better for state agencies to directly counsel and enroll Medicaid beneficiaries in managed care plans. Duties of counselors or brokers vary from state to state. In some states, they are charged with one-on-one counseling. In other states, they hold group sessions to tell Medicaid beneficiaries about their managed care options, or they show the group a video and then answer questions. In still other states, they conduct enrollment primarily by phone and mail.

Here are some of the lessons learned from conducting enrollment through brokers or counselors:

Lesson 1. Use trained, responsive staff. Whether contractors or state agency staff become enrollment counselors, it is important that brokers and counselors have good skills in communicating with beneficiaries. States and contractors should look for culturally diverse staff, reflective of the Medicaid population in a particular state. States and contractors often recruit brokers or counselors through community-based organizations and through welfare-to-work programs. Brokers and counselors should be well-trained. They should know the differences between available plans, the criteria that people should consider in making their choices, problem resolution techniques, and the use of the computer system for processing enrollments. Foundation Health, the enrollment contractor for Massachusetts and New Jersey, holds three-week training sessions for counselors.

Lesson 2. Plan for adequate staffing. Opening enrollment without adequate numbers of staff can cause many problems. Here are some questions that will help guide planning for staff to handle enrollment:

Will brokers or counselors be stationed in each site where beneficiaries report periodically to have their eligibility for Medicaid reassessed? How many sites are there?

If group counseling sessions are planned, how many people can each site accommodate for such sessions? (Groups should probably not be larger than 12 people.)

How much time will it take to present information, either individually or through group sessions, and then answer individual questions and process the enrollments? Some enrollment firms allow 40 minutes for the group presentation with ad-ditional time if translation is needed.

How many people does the state plan to enroll and overwhat time period? As evidenced by initial problems in Connecticut and ongoing problems in California, it is important for brokers to quickly add both staff and phone capability when enrollment demands are higher than firms expect. It is not possible to say exactly what staffing levels are ideal. States do not yet have much experience using enrollment brokers or counselors, and enrollment methods have varied from state to state. New Jersey's enrollment contractor used 23 health benefits advisors at a phone center and 26 advisors in field offices to counsel and enroll over 180,000 households over one year (roughly one advisor for every 3,700 households). Some of the advisors were temporary

1

employees, used only during peak enrollment periods. Rhode Island hired 21 enrollment counselors to enroll 30,000 households over one year (about one counselor for every 1,400 households). In addition to processing enrollments, Rhode Island's counselors assist beneficiaries with a baseline survey of their health status, help get medical records from previous providers, and reach out to homeless Medicaid beneficiaries.

Lesson 3. Phase in enrollment, synchronizing enrollment with Medicaid recertification schedules. Many people come into Medicaid or public assistance offices periodically to be "recertified"-that is, to have their eligibility reassessed. During recertification appointments, eligibility workers can remind people about the importance of choosing a managed care plan and refer them to enrollment brokers or counselors for face-to-face counseling. Because recertification appointments are staggered, tying enrollment to recertification allows for a gradual enrollment schedule, giving the state time to correct any initial problems and avoiding the disruption that often accompanies enrollments of large groups of Medicaid beneficiaries all at once.

Lesson 4. Plan for adequate phone lines and monitor the ease of reaching enrollment counselors by phone. Whenever the state sends out notices about managed care, many beneficiaries call for information. In order to control the volume of inquiries, states can mail to just part of the target population at a time. Enrollment broker firms plan for phone lines to handle a typical volume of calls and often use a phone back-up system, where calls are forwarded to a central or county office, during enrollment spurts. Even with these precautions, some states and firms have underestimated phone demands, and it has taken weeks to correct problems. Piloting managed care enrollment in a small geographical area first might help states and firms to better estimate phone and staffing needs for the entire state.

Lesson 5. Offering enrollment by phone, by mail, and in person may increase response rates. Recently, states such as Connecticut and Oklahoma have allowed Medicaid beneficiaries to enroll in managed care by telephoning an enrollment broker instead of coming in for an appointment or mailing back information. Enrollment counselors in Connecticut follow a 20-minute phone script to present information about plan choices over the phone. Seventy percent of Connecticut managed care enrollees have used telephone enrollment.15 While certainly a convenient and popular option, it is not clear that beneficiaries always receive enough information to make informed decisions over the phone. Also, many beneficiaries do not have telephones.

Lesson 6. Help beneficiaries enroll with a provider when they select their managed care plan. Some states assist beneficiaries with enrollment in a managed care plan and then require the plans themselves to assist beneficiaries with provider selection or assignment. This causes many problems. First, new enrollees may be denied access to any services until the plan assigns them to a physician, which can take some time. Second, if the plans are handling assignments of providers, the states will not know when most of a plan's doctors have stopped taking new patients and the plan should be closed to new en-rollees. Third, Medicaid beneficiaries are counseled to choose plans based on the providers they wish to use; they may learn only after enrolling that the doctor they wanted is not accepting new patients. States have solved some of these problems by encouraging Medicaid beneficiaries to select their primary care physicians at the time they enroll in a plan. To do this, the state (or enrollment contractor) must keep automated records of the providers participating in each plan, and the plans must regularly update provider information. To ensure prompt action, states should set a deadline for assigning Medicaid recipients to physicians and put that deadline in their contracts with managed care plans. Lesson 7. Use a good computer system. The computer system should contain Medicaid

1

eligibility information, enrollment information, and updated information on the location and specialty areas of providers accepting new Medicaid patients.

Lesson 8. Look at beneficiaries' needs for special services when matching them with plans. For some beneficiaries, continued relationships with mental health providers, home care workers, or other specialized providers will be even more important than continuity with a primary care provider. Advocates in both Delaware and Rhode Island reported that serious problems arose for people with mental illness when they followed primary care providers into plans but had to find new mental health providers. Especially in states that mandate enrollment of people with disabilities in managed care, enrollment brokers or counselors should consider needs for such specialized services.16

Lesson 9. If the agency uses its own staff as enrollment counselors, consider flexible job assignments. Demands on enrollment counselors will be heaviest when a new managed care system begins. After most existing Medicaid beneficiaries have enrolled in managed care plans, fewer staff will be needed to process requests for plan changes and to enroll new Medicaid beneficiaries. States that use their own employees as enrollment counselors may thus need to reassign some employees to other jobs after the initial enrollment period. Rhode Island outstations enrollment counselors at hospitals to do general public benefits outreach when managed care enrollment is slow.

Lesson 10. In states contracting for enrollment brokers, put standards in requests for proposals (RFPs) and contracts. In RFPs and enrollment broker contracts, states have an opportunity to specify duties of enrollment brokers, set performance standards, and provide financial incentives for brokers to avoid default assignments. Some states have set particular qualifications for benefits counseling staff through RFPs.

New Jersey requires "adequate" staffing levels, staff with customer service experience and college degrees or equivalent experience, and registered nurses to review whether people should be exempt from managed care based on their health status.

Massachusetts requires staff to reflect the cultural and demographic nature of the beneficiary population.

Delaware seeks counselors with knowledge of community resources and public transportation. Missouri requires the contractor to hire a specified percentage of its staff from work and training

programs for welfare recipients.17 States vary in how they pay for enrollment broker contracts. They may pay based on a fixed-price budget or reasonable cost, require potential contractors to compete on price, or pay a fee for each enrollee. Some states penalize contractors if the default assignment rate goes above a certain standard; alternatively, states may pay a higher fee per enrollee when greater numbers of people select plans. These payment mechanisms have some potential pitfalls. Because enrollment broker contracts are still relatively new, states that do not invite price bids may need to do considerable research to determine a reasonable price. If a state asks brokers to compete for contracts based on cost, the contract will go to the lowest bidder, which may or may not be capable of providing the best outreach and counseling. Where managed care enrollment is mandatory, states should not pay for counseling sessions unless Medicaid beneficiaries choose a plan as a result of the session. States that allow beneficiaries to switch HMOs after 30 days should be cautious about paying brokers on a per-enrollment basis. Minimum standards for plan selection, with either penalties for high percentages of default assignments or bonuses for low default assignment rates, seem useful. Based on the experience of several states, enrollment brokers should be able to achieve default assignment rates well under 25 percent.

1

Lesson 11. In making default assignments, consider beneficiaries' interests. There are a number of things states should do to protect beneficiaries who fail to select plans and who therefore must be assigned to one. They should send beneficiaries several notices urging them to select plans before resorting to making assignments by default. Outreach workers or enrollment brokers or counselors can call Medicaid beneficiaries who do not respond to notices and go door-to-door in neighborhoods with low sign-up rates. In some states where less than 70 percent of the target population selected their own plans, advocates have succeeded in delaying default assignment dates until states did better outreach. When states do assign people to managed care plans, they can use claims data to assign families to the plans that include doctors they have recently used. They can also use zip codes and addresses to assign families to plans with nearby doctors. (Maryland and Virginia are among the states that assign families to previous primary care providers. North Carolina, New Jersey, and Massachusetts are among states using zip code information in making default assignments.) States should consider plans' primary care and specialist provider capacity and stop new assignments when providers have reached maximum caseloads. States should exempt people with disabilities from default assignment. Finally, states should allow default assignees to change plans on request.18

CASE STUDY: NEW JERSEY Standards for Enrollment Broker

New Jersey's Health Benefits Coordinator Request for Proposal requires the enrollment broker to do the following: Conduct Outreach: Provide advance notice to Medicaid beneficiaries about the pending move to managed care before the start of mandatory enrollment. Conduct health fairs. Use a staff with multi-lingual capabilities. Involve community-based organizations and service organizations in outreach to Medicaid beneficiaries. Develop Materials: Develop enrollment-by-mail forms, brochures, a video tape, and marketing materials for approval by the state. Produce bilingual materials at a reading level comprehensible to 90 percent of Medicaid beneficiaries. Mail Information and Follow-up: Mail information in waves to Medicaid beneficiaries, track return mail, and conduct enough follow-up mailing and phone calls to keep default enrollments below 50 percent. Use an automated mail system interfaced with the Medicaid eligibility data system. Counsel Medicaid Beneficiaries about Enrollment: Give everyone required to enroll an opportunity to receive in-person individual or group counseling. Hold counseling sessions in or near welfare offices and in other sites. Establish offices or mobile vans convenient to welfare offices that do not have enough space for counselors. Provide Telephone Assistance: Establish a toll-free phone center, equipped with TDD (special equipment for the deaf and hearing-impaired) and able to promptly handle the expected volume of calls regarding enrollment. Assist with Provider Selection: Maintain an automated directory of primary care physicians and hospitals participating in each plan and assist people in selecting primary care physicians. Assist in HMO Selection and Process Enrollments: Assistance must be based on the Medicaid beneficiary's best interests.

1

Other Duties: Process disenrollment requests and keep logs regarding disenrollment; advise Medicaid beneficiaries of grievance and hearing rights; after one year, design and administer a member satisfaction survey to assess satisfaction with HMOs and primary care physicians, knowledge of rights and responsibilities, accessibility of services, perceived quality of care, and cultural or language problems. Standards: For telephone service, requires that 97 percent of calls be answered by the fourth ring; average waiting time on the phone be no more than 30 seconds; and no more than 5 percent of callers should get busy signals. Requires speed and accuracy in processing enrollments (applications must be processed within three work days and enrollments must be 98 percent accurate). Requires low level of auto-assignments (auto-assignments must be less than 50 percent and the contractor is paid more for lower auto-assignments). Requires compliance with a work schedule, including maintenance of automated systems. Contractor can be assessed damages for failing to meet various performance standards.

What Advocates Can Do

When states do not manage the market and enrollment aspects of Medicaid managed care programs adequately, advocates can and should take steps to protect beneficiaries. There are several things advocates can do.

Use the Medicaid waiver process to prevent or minimize potentially abusive marketing practices and to promote good enrollment procedures.

Urge states to put strong provisions into contracts with managed care organizations and enrollment brokers, and promote state legislation and regulations that address marketing and enrollment.

Get state and federal officials to investigate abusive practices. Mount media campaigns to call attention to problems. Ask city and county governments to intervene when state enrollment processes do not protect

beneficiaries' interests. Bring lawsuits against managed care plans for fraudulent marketing or against states for lax

oversight of Medicaid managed care. Encourage community groups to get involved by providing outreach and education about

Medicaid managed care choices.

Advocate through the Waiver Process In order to require Medicaid beneficiaries to enroll in managed care, states must receive a waiver of federal Medicaid law. States apply to HCFA for either a 1915(b) or an 1115 waiver. In requests for waivers, states must describe their plans for marketing and enrollment. Consumer and advocacy organizations should work with their states to design waiver proposals. Often, the state's Medicaid Advisory Committee, which has some consumer representation, reviews and advises the state on its waiver proposal. States must give the public notice and an opportunity to comment on 1115 waiver proposals. Although states are not required to notify the public of proposed 1915(b) waivers, HCFA says that it encourages states to do so. When a waiver proposal is submitted to HCFA, advocates can comment to both the nearest regional office of HCFA and the central HCFA Office of Managed Care in Baltimore, Maryland. (At the time of this printing, HCFA plans to reorganize in 1997 and the Center for State Operations in the central office, 7500 Security Blvd., Baltimore, MD 21244, will have overall jurisdiction over Medicaid managed care.) HCFA may deny or delay a waiver request, or it may impose terms and conditions on the waiver to correct problems. Once a waiver is implemented, HCFA must monitor Medicaid managed care and review independent evaluations of the program prior to waiver renewal.

1

Advocate for Consumer Protections in State Laws, Regulations, and Contract Provisions States' RFPs, contracts with managed care organizations, and contracts with enrollment brokers can set forth acceptable marketing and enrollment practices, performance standards, and sanctions. Advocates can work with their state Medicaid agencies or with state legislators in their oversight role, to put strong provisions in RFPs and contracts concerning enrollment and marketing.

As mentioned earlier, states can also pass laws and regulations specifically governing marketing and enrollment for Medicaid beneficiaries in managed care. Laws and regulations have already been enacted by some states that prohibit certain types of marketing by managed care plans serving Medicaid beneficiaries, require managed care plans to give enrollees and potential enrollees information about plan rules and provider qualifications, and establish state oversight procedures and consumer hotlines.

Request State and Federal Investigations The Office of Inspector General of the U.S. Department of Health and Human Services, the U.S. General Accounting Office (on the request of a member of Congress), the U.S. Attorney General, and in some states, the State Attorney General and/or Department of Insurance all can investigate managed care marketing abuses. State consumer fraud laws or laws that establish offices of the attorney general, the inspector general, insurance departments or health departments may grant investigative powers. To learn what laws pertain to their states, advocates may contact their state attorney general and ask for either the consumer protection office or the person assigned to the health department, insurance department, or human services agency. Unfortunately, states do not always correct abusive practices, even after investigations. California did not prohibit door-to-door marketing after federal reviewers cited abuses. An Inspector General was established in 1994 to address Medicaid fraud and abuse in the Illinois Department of Public Assistance; despite ongoing complaints of marketing abuses in Illinois, the Inspector General had taken no formal action against health plans as of January 1997.

Conduct a Media Campaign When officials fail to act, media campaigns may help call attention to marketing and enrollment problems. The series, "Profits From Pain: Florida's Medicaid HMOs," published by the Ft. Lauderdale, Florida Sun-Sentinel in December 1994, led to a state investigation of managed care problems. Florida consumer advocates wrote consumer education materials and also worked for consumer protection laws. Partly as a result of the publicity, Florida strengthened protections in Medicaid contracts with HMOs and eventually passed legislation regarding marketing and enrollment. In May 1996, the Illinois Campaign for Better Health Care gathered complaints from its member organizations about abusive marketing practices and, with the Center for Community Health Action of Families USA, released a report, Illinois Managed Care Marketing Abuses: Dangerous Precedent, Dangerous Future. Citing nine case examples of abusive marketing under Illinois's voluntary Medicaid managed care program and a history of documented marketing abuses beginning as early as 1989, the authors called on the governor, the Illinois legislature, and HCFA to prohibit door-to-door marketing, use neutral benefits counselors for outreach and enrollment, create a consumer board to oversee counseling, and establish an independent consumer hotline.

Partly as a result of this advocacy, HCFA placed conditions on a waiver that will enroll more Illinois Medicaid beneficiaries in managed care. Under the new program, scheduled to start in 1997, managed care plans will not be able to market door-to-door or in welfare offices in Illinois, and plans' marketing materials must be approved by HCFA. Since marketing abuses are likely to

1

continue until the waiver conditions take effect, the Campaign for Better Health Care is now working with the Illinois Attorney General in hopes that under the state's fraud laws, the Attorney General will enjoin managed care plans from any door-to-door marketing.19

Encourage the City or County to Intervene City and county governments may be willing to intervene if states do not correct enrollment problems. As mentioned earlier, when Missouri had potentially high default assignment rates due to a confusing enrollment system, the St. Louis Board of Aldermen successfully sought to delay default assignment, and city workers filled gaps in outreach. Similarly, when enrollment went awry in Sacramento, California, the Sacramento Board of Supervisors intervened to delay default enrollment dates.

File a Lawsuit Lawsuits can pressure or compel states to better oversee enrollment. For example, two cases brought by legal aid and consumer groups in California in 1995 alleged that California provided lax oversight over HMOs. In Ivy v. Belshe, plaintiffs sued both the state and Foundation Health Plan for abusive door-to-door marketing.20 The case has now been settled, and Medicaid recipients have received notice about their disenrollment rights. Medicaid beneficiaries also can sue plans directly for deceptive marketing practices. Central California Legal Services brought the case Gonzales v. Cohen against a California plan whose sales agents lied to prospective enrollees during door-to-door presentations. The case settlement required the plan to pay for an ombudsman to assist Medicaid beneficiaries.21

Mount Consumer Education and Monitoring Campaigns Advocates can mount consumer education campaigns-educating people about plan choice, their rights, and complaint procedures-while encouraging federal, state, and local officials to intervene. Advocates and community organizations can document problems with marketing and enrollment so that HMOs and government officials will address individual and systemic problems. Several consumer organizations have developed checklists to help people choose health care plans.

The Northeast Ohio Coalition for National Health Care and the Empowerment Center of Greater Cleveland published a brochure for Medicaid beneficiaries. The brochure urges people to search for plans based on the doctors who are in them, get HMO member handbooks, find out what other people say about the HMO, call to see if the HMO answers the phone politely and answers questions, learn the HMO's procedures for switching doctors within the plan, and so forth.

The Oregon Advocacy Center produced a book and worksheet to assist persons with disabilities in choosing health plans. These materials suggest questions on, for example, specialists, physical accessibility, home care, and medical equipment that persons with disabilities may want to ask plans. Summit Health Coalition, a national coalition that advocates for African- American consumers enrolled in managed care, has published a checklist for both private and publicly insured consumers. It examines costs, benefits, participating doctors and specialists, access, and complaint systems. Summit's checklist also looks at "community support"-that is, whether plans hire African-Americans as office workers, technicians, and managers and whether the plans give money to support positive activities in the community.22 The Community Service Society of New York interviewed 421 Medicaid recipients in income support centers about their knowledge and experiences with managed care. They found significant gaps in Medicaid beneficiaries' understanding of managed care and their enrollment options. For example, most managed care enrollees chose the first plan that approached them

1

rather than considering other options. Although at the time of the survey, enrollment in Medicaid managed care was voluntary, 31 percent of respondents said they were told they had to sign up for a plan to remain eligible for Medicaid. Only 63 percent of respondents in managed care reported that they were told they could only use network providers. Just 45 percent reported that they were told how to get specialty care and 18 percent that there were restrictions on using emergency rooms. Few were informed of plans' complaint procedures. The Community Service Society has launched its own managed care education project to address these problems. It has produced Your Health Plan Handbook: How to get the health care your family needs from a managed care plan (1996); offers workshops on managed care; and has sent trained volunteers to community-based organizations.23

ENDNOTES

1. Medicare marketing and enrollment is governed by Social Security Act §1876(c)(3) and 42 CFR 417.428. Medicaid marketing and enrollment in prepaid health plans is governed by Social Security Act 1903(m) and 42 CFR 434.25. 2. Mark Green, Managed Confusion: How HMO Marketing Materials are Tricking the Elderly and the Poor (New York City: Office of the Public Advocate, November 1995), p. 12. 3. Anna Byrd Davis, "OmniCare Plan Draws Warning: Marketing Tactics Stir Major Concern," Memphis Commercial Appeal, September 16, 1994; and General Accounting Office, States Efforts to Educate and Enroll Beneficiaries in Managed Care (Washington, DC: GAO/HEHS-96-184, September 1996). 4. Larry Gage, et al., The Safety Net In Transition: Increasing Your Role in State Design of Medicaid Managed Care Programs (Washington, DC: National Association of Public Hospitals and Health Systems, 1996), p. 13. 5. Of 44 states that operated managed care programs for Medicaid beneficiaries in 1995, California, Florida, Illinois, Maryland, Michigan, New York, Ohio, Pennsylvania and Virginia allowed door-to-door marketing as did the District of Columbia. Jane Horvath and Neva Kaye (editors), Medicaid Managed Care: A Guide for States (Portland, ME: National Academy for State Health Policy, 1995) p. I-D-28. Subsequently, most states prohibited this practice (Families USA calls to states, January 1997). 6. American Public Welfare Association, Monitoring Risk-Based Managed Care Plans: A Guide for State Medicaid Agencies (Washington, DC: American Public Welfare Association, July 1993); and Horvath and Kaye (eds.), Medicaid Managed Care. 7. Health Care Financing Administration (HCFA) Office of Managed Care, Medicaid Managed Care Marketing Guidelines for States, (Baltimore, MD: U.S. Department of Health and Human Services, HCFA, August 1994) recommends that no more than 50 percent of marketing representatives' average annual compensation should be from commissions. This standard has not been sufficient to curb abuses in states such as Tennessee, where newspapers reported many marketing abuses. 8. Letter from Joel Ferber, Legal Services of Eastern Missouri, Inc., to Donna Checkett, Director, Division of Medical Services, Missouri Department of Social Services, August 24, 1995, and HealthCare USA advertisement. 9. HCFA, Medicaid Managed Care Marketing Guidelines for States. 10. Information from Laurie Facciarossa, Deputy Project Manager for Health Care Reform, New Jersey Department of Human Services, March 1996. 11. New York City Department of Social Services, Human Resources Administration, "New York City Program for Contractor Assisted Enrollment," July 29, 1996. 12. Geraldine Dallek, Carol Jiminez, and Marlene Schwartz, Consumer Protections in State HMO Laws (Los Angeles, CA: Center for Health Care Rights, 1995), volume 1 pp. 13-30. 13. Latino Issues Forum, "Medi-Cal Managed Care Policy Update," (San Franciso, CA: Latino Issues Forum), Brief #4, 1996. 14. Information from Dr. Paul Pollner, Delaware Alliance for Health Care, August 2, 1996. 15. Information from Paul DiLeo, Benova, December 1996. 16. Information from Marti Rosenberg, Ocean State Action, December 1996, and Debbie

1

Gottchalk, Community Legal Aid, Spring 1996; New York City Task Force on Medicaid Managed Care letter to Lu Zawistowich, Office of State Health Reform Demonstrations, HCFA, October 1995. 17. Mary Kenneson, "Benefits Counseling Models and Issues," p. IV-19 in Horvath and Kaye (eds.), Medicaid Managed Care. 18. States that lock Medicaid beneficiaries into managed care plans for longer than a month handle disenrollments in various ways. Minnesota locks in Medicaid managed care enrollees for one year but allows them to change plans once during that year for any reason and to make additional changes for cause. Missouri Consumer Watch drafted language for Missouri's pending 1115 waiver that would allow disenrollment from a plan on request within the first 45 days of assignment. In 1995, 21 states had general HMO laws that required HMOs to provide a contract cancellation period during which new enrollees could inspect and cancel their enrollment contracts for any reason. Dallek, et al., Consumer Protections in State HMO Laws, p.20. 19. Ivy v. Belshe, San Francisco Superior Court, 967194. For more information, contact Consumers Union, San Francisco, CA. See also Michael Parks, An Advocate's Guide to Medicaid Case Management Systems (Los Angeles, CA: National Health Law Program, 1988) and Jane Perkins, and Michele Melden, Section 1115 Medicaid Waivers: An Advocate's Primer, (Los Angeles, CA: National Health Law Program, 1994), which discuss other cases and legal strategies. 20. Information from Jim Duffett, Illinois Campaign for Better Health Care, July 31, 1996. 21. Information from Jack Daniels, Central California Legal Services, 1996. 22. The Northeast Ohio Coalition and the Empowerment Center both have offices in Cleveland, Ohio. Summit Health Coalition is headquartered in Washington, D.C. The Oregon Advocacy Center is located in Portland, Oregon. 23. Christine Molnar, Denise Soffel, and Wendy Brandes Knowledge Gap: What Medicaid Beneficiaries Understand - and What They Don't - about Managed Care (New York NY: Community Service Society, December 1996).

GLOSSARY OF TERMS USED IN MEDICAID MANAGED CARE MARKETING AND ENROLLEMNT

Auto-assignment - See default assignment. Beneficiary - A person eligible to receive benefits under an insurance policy or plan. The term is commonly applied to anyone receiving benefits under the Medicaid program. Benefits counselor - See enrollment counselor. Capitation - A health insurance payment mechanism in which a fixed amount is paid per person to cover services; a fixed, per capita payment. In Medicaid managed care, capitated managed care organizations are paid a fixed monthly amount for each Medicaid beneficiary enrolled in their plan, regardless of whether or not the beneficiary uses services that month and regardless of the amount of services the beneficiary uses. Managed care organizations may also pay their providers on a capitated basis. Default assignment - The state, rather than the Medicaid beneficiary, selects a managed care organization for a Medicaid beneficiary and enrolls him or her in that managed care organization. Generally, default assignment occurs when beneficiaries fail to select a managed care organization within an allotted time period. States' methods for making these assignments vary. Some states assign beneficiaries to managed care organizations based on distance from the beneficiary's home to a provider or based on continuity with former providers; others randomly assign beneficiaries to available managed care organizations; others assign all beneficiaries who do not select their own plan to one managed care organization that has successfully bid for

1

default assignments during the state's contracting process or to the managed care organization that includes public hospitals or other traditional Medicaid providers. Direct marketing - In Medicaid managed care, this term means that managed care organizations solicit enrollees through personal contact with Medicaid beneficiaries or that they advertise their services to Medicaid beneficiaries without the state's serving as an intermediary. Door-to-door marketing - The practice of going to the homes of Medicaid beneficiaries or of going door-to-door in low-income neighborhoods to solicit Medicaid managed care enrollments. Enrollment broker - A private agency under contract with a state to advise Medicaid beneficiaries about their choices among managed care organizations or choices between managed care and fee-for-service Medicaid and to assist beneficiaries with enrollment. These agencies are supposed to provide neutral counseling, so states generally require that they be unrelated to any managed care organization operating in the state. In some states, state agencies may advise and assist beneficiaries, thus assuming the functions of an enrollment broker. Enrollment counselor - Staff member within an enrollment firm or within a state agency who directly advises Medicaid beneficiaries of their choices among managed care organizations or choices between managed care and fee-for-service Medicaid. Fee-for-service - The traditional health care payment system under which physicians and other providers receive a payment for each service they provide. Health Care Financing Administration (HCFA) - The federal agency that oversees the Medicaid and Medicare programs. HCFA is part of the U.S. Department of Health and Human Services. Health Maintenance Organization (HMO) - A type of managed care health plan that provides, offers, or arranges for coverage of designated health services needed by plan members for a fixed, prepaid premium. Managed care - A system of health service delivery and financing that coordinates the use of health services by its members, designates covered health services, provides a specific provider network, and directs the use of medical care services. Mandatory enrollment - Certain categories of Medicaid beneficiaries are required to enroll in managed care organizations. If they do not voluntarily select managed care organizations, the state will assign them to managed care organizations. See default assignment. Medicaid - A health insurance program established in 1965 through Title XIX of the Social Security Act. Medicaid pays for health services for low-income families with dependent children, senior citizens, and persons with disabilities. It is financed through federal and state funds. Each state administers its own Medicaid program according to federal rules and with federal oversight. (In California, the Medicaid program is known as "Medi-Cal.") Medicaid (or Medical Care) Advisory Committee - Committee established according to federal regulations to advise the state agency administering the Medicaid program. It must include consumer representatives. Primary care provider - Health care provider who is responsible under managed care for the overall assessment and coordination of a patient's care. Patients first discuss their health concerns with a primary care physician, who may refer them to specialty health care or other health services. Generally HMOs include internists, pediatricians, family physicians, general practitioners, and sometimes obstetricians/gynecologists as primary care providers. Primary Care Case Management (PCCM) - A program, usually established under a 1915(b)

1

Medicaid waiver, in which states contract directly with primary care providers to be responsible for the provision and/or coordination of medical services to Medicaid beneficiaries under their care. These primary care providers, for example, must authorize and refer Medicaid beneficiaries for specialty care. Currently, most PCCM programs pay the primary care physician a monthly case management fee in addition to their fee-for-service reimbursements. Provider network - Physicians, nurses, and other health providers under contract with a particular managed care organization. Re-certification - The process by which Medicaid beneficiaries or cash assistance beneficiaries show that they are still eligible for benefits and a government agency agrees to continue providing benefits for a given period of time. Request for proposal (RFP) - Formal announcement by a public or private organization setting forth requirements and application procedures for prospective grantees or contractors to provide goods or services. Voluntary selection - Process whereby Medicaid beneficiaries actively choose a managed care organization. See default assignment. Waiver - Federal law allows states to seek exceptions to certain provisions of the Medicaid program through formal requests to the Health Care Financing Administration. These requests are known as waiver proposals. States often use one of two types of waivers to establish mandatory Medicaid managed care programs. Under 1915(b) waivers, states can "waive" Medicaid rules regarding freedom to choose a provider, establishment of statewide programs, and comparability of Medicaid benefits to different covered groups. Thus, states can require all or some categories of Medicaid beneficiaries to enroll in managed care either throughout the state or in limited geographical areas. Under 1115 waivers (also called research and demonstration waivers), states can "waive" many requirements of the Medicaid program, including eligibility rules. The resulting program must be budget neutral that is, it must not cost more than projected expenses under the previous Medicaid program. States can, for example, charge deductibles and co-payments, establish HMOs that serve only Medicaid beneficiaries, and use managed care savings to extend Medicaid eligibility to groups of people that do not qualify for coverage under standard rules.