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Medicaid Managed Care and the Provision of Family Planning Services

Overview

The Medicaid program is jointly administered and financed by state governments and the Centers for Medicare and Medicaid Services (CMS), a federal agency within the U.S. Department of Health and Human Services (HHS). Established in 1965, it now provides health coverage to some 70 million low-income adults.1 The program has been especially instrumental for women who were more likely than men to qualify for Medicaid because of their greater likelihood of having low incomes as well as meeting the pre-Affordable Care Act (ACA) categorical eligibility requirements as a pregnant woman, parent of a dependent child, senior, or an individual with a disability. With the passage of the ACA, states were given the option to extend eligibility to low-income adults without dependents for the first time. In states that chose to expand the program, federal regulations require states to cover this new category of nonelderly, childless adults at or below at least 138% of the Federal Poverty Level (FPL). These newly eligible adults include an estimated 13 million women who gained access to primary care and reproductive health services in 2016.2 However, 19 states have not chosen to expand Medicaid.3

Given that women of reproductive age account for 70% of adult women enrolled in Medicaid,4 the program’s history of strong protections for family planning and reproductive health services are of particular importance.5 Since 1972, the federal government has required Medicaid to cover family planning services as a mandatory benefit, matching state family planning expenditures at an enhanced Federal Medical Assistance Percentage (FMAP) of 90% in order to encourage states to expand access to these services.6 Medicaid enrollees may not be charged cost-sharing for family planning services and are given freedom of choice of provider when it comes to family planning. Medicaid is the largest public payer for family planning care, financing about 75% of all publicly funded family planning services and supplies,7 and remains a critical source of primary health care and family planning coverage for low-income women.

Family Planning in the Medicaid Managed Care Context

Over the past two decades, managed care has become the dominant mode of service delivery for Medicaid beneficiaries. In 2011, 77% of women insured by Medicaid were enrolled in managed care plans.8 In the 1990s, there was a surge in Medicaid beneficiaries enrolled in managed care organizations (MCOs), as states shifted from traditional fee-for-service models to mandated MCO enrollment in order to cut costs and improve quality through coordinated care. Through these arrangements, state Medicaid offices contract with MCOs, paying them a capitated rate by the state for each Medicaid beneficiary enrolled in their plan. The MCO then assembles a network of providers to deliver services to their members. A key provision of the Medicaid program’s family planning rules is that it allows enrollees the “freedom of choice” to select any participating provider for their family planning care. This rule also applies to those enrolled in a managed care arrangement, even if they are limited to the providers within the MCO network for other services. In other words, women on Medicaid may obtain family planning services out of network from the provider of their choice with full coverage by their managed care plan.

While the federal government issues broad guidelines governing managed care, the state Medicaid programs have extensive latitude to establish their own managed care regulations and negotiate contracts with MCOs. In addition, MCOs maintain flexibility in designing specific policies and reimbursement strategies that fall within federal and state regulations. The result is a patchwork of policies across MCOs surrounding the provision of family planning services for Medicaid beneficiaries. In April 2016, CMS issued a new rule which strengthened federal managed care regulations including requirements for network adequacy standards for family planning providers, information provided to beneficiaries about their freedom of choice, as well as limitations on the use of utilization controls that may restrict a beneficiary’s right to select the contraceptive method of their choice. Nonetheless, there is still considerable variation among policies affecting family planning services within the managed care system.

Regardless of the outcome of efforts to repeal or replace the ACA or cap Medicaid spending, managed care is likely to remain the dominant care arrangement for Medicaid beneficiaries across the nation. With three quarters of reproductive age women on Medicaid enrolled in managed care arrangements, the effective provision of these family planning services is an essential element of needed care for women and is critical to reduce unintended pregnancies among this population. This report provides insights from plan leaders on the current state of family planning services within Medicaid managed care arrangements and addresses a variety of topics related to the provision of family planning services to low-income women including billing and reimbursement, provider recruitment and network adequacy, scope of benefits, member education, provider training, quality measurement, and state policy constraints.

Methodology

This study serves as an environmental scan of Medicaid managed care and family planning services focusing on identifying gaps in knowledge, barriers to care, and current practices and policies in the coverage of family planning services offered by Medicaid managed care plans. The project was guided by a set of research questions about the provision of family planning benefits by MCOs to Medicaid populations:

  • How does Medicaid managed care provide women’s reproductive health benefits (e.g., family planning, contraception, prenatal and post-partum care)?
  • What are the barriers that MCOs observe when coordinating care, providing access, and ensuring coverage to such benefits for their members? Are these barriers related to state or federal policies, providers, religious institutions, or personal and/or socioeconomic characteristics (e.g., transportation, health literacy)?
  • What innovative programs are MCOs developing to overcome these barriers and improve care for women?
  • What resources, policies, or tools would help MCOs to enable their patients to overcome barriers to accessing reproductive health care?

This report relies on information collected through two methods: a national survey and focus groups of Medicaid MCOs. A National Technical Advisory Committee (NTAC) of six experts, including Chief Medical Officers, Executive Directors, and Presidents of major Medicaid managed care organizations throughout the country, was assembled in March 2016 to serve as expert consultants in the development of the survey tool and interview guide for the focus groups. The survey then collected data on a wide variety of topics including billing and reimbursement, provider recruitment and network adequacy, benefits, member education, provider training, quality measurement, and state policy constraints. Due to the release of CMS managed care regulations in April 2016, the survey did not include questions about policies, such as utilization controls, that were prohibited by the new rule. The plans were selected based on the geographic region and the number of lives covered. The survey was sent to 20 health plans in May 2016. Eight health plans responded to the questionnaire, including four multi-state plans.

Two in-person focus groups were conducted in September 2016. An interview guide was used to inquire about the same issues addressed in the survey. These focus groups consisted of seven additional plans that did not complete the survey, including six multi-state plans. In total, the report includes perspectives from 15 Medicaid managed care plans, representing more than 15.2 million beneficiaries. These groups were supplemented by follow-up discussions with three participants to clarify certain issues raised during the focus groups.

The survey tool is available upon request.

Executive Summary Report

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.