IMPROVING STATE MEDICAID CONTRACTS AND PLAN PRACTICES FOR CHILDREN WITH SPECIAL NEEDS

The rapid transition of state Medicaid beneficiaries into fully capita ted managed care plans requires a special focus on children with chron ic or disabling conditions, who often depend on numerous pediatric phy sicians and other specialty services for health care and related servi ces. Because managed care arrangements for this population are growing in popularity nationwide, it is important that states craft managed c are contracts to address the unique needs of children with complex phy sical, developmental, and mental health problems. Based on the researc h reported in this article, in-depth interviews with State Medicaid ag ency staff interviews with medical directors and administrators of man aged care plans serving Medicaid recipients, and input from experts in pediatrics and managed care, a set of recommendations is made for tai loring managed care contracts to meet the needs of this vulnerable gro up of children. Six contracting elements that should be adopted by sta te Medicaid agencies include (I) clarifying the specificity of pediatr ic benefits, (2) defining appropriate pediatric provider capacity requ irements, (3) developing a medical necessity standard specific to chil dren, (4) identifying pediatric quality-of-care measures, (5) setting appropriate pediatric capitation rates, and (6) creating incentives fo r high-quality pediatric care. Nine approaches that should be adopted by managed care practices interested in providing high-quality care fo r children with special needs also are identified. These include (1) e nsuring that assigned primary care providers have appropriate training and experience, (2) offering support systems for primary care practic es, (3) providing specialty consultation for primary care providers, ( 4) establishing arrangements for the comanagement of primary and speci alty pediatric services, (5) arranging for comprehensive care coordina tion, (6) establishing flexible service authorization policies, (7) im plementing provider profiling systems that adjust for pediatric case m ix, (8) creating financial incentives for serving children with specia l needs, and (9) encouraging family involvement in plan operations. Im plementing these changes to managed care contracting could have a majo r impact on the quality and comprehensiveness of health care received by children with special needs. Successful implementation, however, re quires strong support from both state Medicaid agencies and the manage d care plans dedicated to serving this population.