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Medicaid Managed Care: Improvements Needed to Better Oversee Payment Risks

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Report Type Reports and Testimonies
Report Date July 26, 2018
Release Date July 26, 2018
Report No. GAO-18-528
Summary:

Almost half—$171 billion—of Medicaid spending in 2017 went to managed care organizations (MCO). In Medicaid managed care, states pay a set periodic amount to MCOs for each enrollee, and MCOs pay health care providers for the services delivered to enrollees.

Used effectively, managed care can help states reduce Medicaid costs. However, managed care still is at risk of making incorrect payments, such as duplicate payments or payments for ineligible patients.

We identified 6 types of payment risks: 4 related to state payments to MCOs, and 2 related to MCO payments to providers.

We recommended ways to improve oversight of managed care payments.

State Medicaid agencies may pay providers directly for their services to patients or may pay managed care organizations a fixed monthly "capitated" payment for their services to patients.

This graphic shows the chain of payments under fee-for-service and managed care arrangements.

This graphic shows the chain of payments under fee-for-service and managed care arrangements.

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