SD25 - Study of the Impact of Medicaid Managed Care on Durable Medical Equipment Companies and Pharmacy Services Pursuant to SJR 62 of 1996

Executive Summary:

Senate Joint Resolution (SJR) 62 of the 1996 Session of the General Assembly directed the Joint Commission on Health Care to study the effects of the Department of Medical Assistance Services' pilot managed care programs on durable medical equipment companies and pharmacy services. In addition, the Joint Commission was directed to evaluate the results of the Tidewater pilot program and assess the expansion of the managed care programs to provide such managed care services to Medicaid recipients across the state. A copy of SJR 62 is provided at Appendix A.


The Department of Medical Assistance Services Has Implemented Three Managed Care Programs For Medicaid Recipients

In response to legislation passed by the General Assembly, the Department of Medical Assistance Services (DMAS) has implemented three managed care programs for Medicaid recipients since 1992. These three programs are: (i) Medallion, a primary care case management system; (ii) Options, a voluntary program in which eligible Medicaid recipients can choose to enroll in a Health Maintenance Organization (HMO) instead of choosing a Medallion primary care physician; and (iii) Medallion 11, a mandatory program in the Tidewater area in which recipients must choose an HMO from among several which contract with DMAS.

As illustrated in Figure 1,331,000 of the total 540,000 Medicaid recipients (61%) are enrolled in one of the three DMAS managed care programs.

Medallion: The Medallion program, which was Virginia's first large-scale managed care program, was implemented in January, 1992. Medallion is a primary care case management program in which recipients select a primary care physician (PCP) who provides or arranges for the recipient's health care services. Medallion currently operates in 128 of the Commonwealths 135 localities. Medallion is administered by DMAS staff.

Options: The Options program was implemented in January, 1995. Through Options, eligible recipients can choose to enroll in an HMO rather than selecting a PCP through the Medallion program. Options enrollees receive all of their care through the HMO. Currently, there are six HMOs providing services to 36,000 clients in 34 localities.

Medallion II: OMAS implemented the Medallion II program on January 1, 1996. Medallion II is a program in which most Medicaid recipients are required to enroll in one of five HMOs which have contracted with DMAS to provide health care services. The program currently is operating in seven localities in the Tidewater area. There are several special populations which are excluded from participating in the program. Accordingly, the program is comprised primarily of children, single parents and expectant mothers. There are also some disabled recipients and a few elderly recipients. At the present time, there are approximately 95,000 recipients enrolled in Medallion II.

The Medallion II program is expected to be phased into other areas of the state during 1997 and subsequent years. However, language in the 1996 Appropriation Act requires that DMAS delay the expansion of the program into northern Virginia until May I, 1997.