Eight plans, including Aetna U.S. Healthcare, have dropped out of New York State's ambitious program to shift 2.2 million of its Medicaid beneficiaries to managed care plans. Troubled Oxford Health Plans announced in February that it would no longer participate in programs in New Jersey and its home state, Connecticut, and New York officials are nervous that Oxford will bow out in their state as well. United Healthcare Corp., in Ohio's Medicaid program for over a decade, dropped out completely last year. In February, Blue Cross and Blue Shield of Massachusetts announced it was dropping out of the Bay State's Medicaid program, even though Massachusetts requires health plans that want to compete for lucrative state employee contracts to have a Medicaid program. There are the political bumps and bruises mentioned by Emerson.
Physician attitudes can also be a problem.
Richard Hannon, a senior vice president for Blue Cross and Blue Shield of Arizona in Phoenix, says that his company decided not to renew its Medicaid contract last year partly because of growing resentment on the part of some physicians in its network. In Massachusetts, Blue Cross and Blue Shield considered a separate provider network and medical management approach. The idea was dropped when an analysis showed the plan would still lose money. Given the razor-thin margins in managed care these days, state efforts to squeeze Medicaid rates strike many health plan executives as adding insult to their already injured bottom lines. Ginsburg, who is president of the Center for Health System Change, a Washington, D.C.-based research center, notes that when the states started getting into managed care, they didn't have much to go on.