May 21, 2021

Why Medicaid Managed Care Works in Ohio

More and more states are following Ohio’s lead by embracing Medicaid Managed Care rather than a one-size-fits-all government program.

States that use traditional fee-for-service Medicaid programs compensate providers with an established fee based only on the volume of services rather than the value of those services. This model does not measure quality or encourage innovation. It also does not create accountability to ensure individuals are receiving appropriate care, and it limits options for preventing and treating chronic conditions. And, fee-for-service programs create risk and uncertainty for state budgets.

Ohio offers a better choice. Today, 2.8 million Ohioans — 88% of all Medicaid members — receive care from one of six statewide Medicaid Managed Care Plans (MCPs). Ohio pays MCPs a fixed monthly capitation rate to cover certain services for members and to be responsible for the health of their members. When setting capitation rates, Ohio’s actuary reduces the rates to reflect actual achieved savings and saving targets that plans should be able to achieve through better management.

The MCPs are financially at risk to provide all health care services included in their contract with the Ohio Department of Medicaid. They cover services required by federal and state law while also providing value-added benefits to enhance their members’ health and experience. MCPs maintain an adequate network of specialists and assign members to a primary care provider. MCPs are also responsible for active member engagement and monitoring to ensure their members’ health care needs are being met, providers are available, and care is being effectively managed to improve outcomes.

Ohio was an early adopter of managed care and has been using it for portions of its Medicaid program since the 1970s. Ohio’s responsible approach to program structure, regulation, and rate setting have created a stable and mature environment where the state and MCPs have been able to focus on improving efficiency and effectiveness.

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