Objective. To examine the influence of state strategies aimed at increasing
federal Medicaid matching dollars on the design of states' Medicaid manage
d care programs.
Study Design. Data obtained from the 1996-1997 case studies of 13 states to
examine how states have adapted the design of their Medicaid managed care
programs in part because of maximization strategies, to accommodate the man
y roles and responsibilities that Medicaid has assumed over the years.
Principal Findings. Our study showed that as states made the shift to manag
ed care, some found that the responsibilities undertaken in part through ma
ximization strategies proved to be in conflict with their Medicaid managed
care initiatives. Among other things, the study revealed that most states i
ncluded provisions that preserved the health care safety net, such as adapt
ing the managed care benefit package and promoting the participation of saf
ety net providers in managed care programs. In addition, most of the study
states continued to pay special subsidies to safety net providers, includin
g hospitals and clinics.
Conclusions. States have made real progress in moving a large number of Med
icaid beneficiaries into managed care. At the same time, many states have s
pecially crafted their managed care programs to accommodate safety net prov
iders and existing funding mechanisms. By making these adaptations states,
in the long run, may compromise the central goals of managed care: controll
ing costs and improving Medicaid beneficiaries' access to and quality of ca
re.