A growing number of state Medicaid agencies are planning to launch or expand programs that offer risk-based contracts to managed care organizations (MCOs) to provide long-term services and supports (LTSS)--and, in some cases, acute and primary care--to older adults and people with disabilities. Because these individuals often have one or more chronic health conditions, they tend to use more health services than younger people and people without disabilities. In addition, they often depend on other services and supports such as personal care to perform activities of daily living, such as bathing and eating. In risk-based managed care arrangements, state Medicaid agencies pay their contracted MCOs a predetermined monthly per-member rate and the MCOs bear financial risk for providing all covered services within the rate. These fixed payments make Medicaid costs more predictable for state governments, but they may create incentives for plans to restrict access to services for individuals who have costly health care needs. This potential risk highlights the importance of state oversight to ensure that MCOs comply with all contract requirements--including the provision of all LTSS required to provide optimal care to their enrollees. This study was conducted to determine the specific capacities that state Medicaid agencies need to monitor the performance of managed LTSS (MLTSS) programs. It sought to identify promising practices in state oversight as well as the monitoring capacities that should be in place when states begin to implement new or expanded MLTSS programs. Lessons were drawn from oversight practices in eight states that have many years of experience operating and overseeing MLTSS: Arizona, Massachusetts, Minnesota, New Mexico, New York, Tennessee, Texas, and Wisconsin. References to "states" in this report are to these eight states unless otherwise specified.
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