In the past several years, states have gone from the relatively simple task of managing payment claims to the more complex chore of purchasing health benefits. Suddenly, health issues, such as patient access, use, cost, quality and outcome, have become terribly important. In order to do that well, they need the most current information possible. The solution for more states is to build a data warehouse. At the same time, states moved nearly 54 percent of the Medicaid population into managed care.
Several factors are behind the change.
Federal rules have expanded eligibility to new groups of people, many of whom do not qualify for cash assistance under welfare. For example, more children and pregnant women are eligible than ever. In return, states have been granted greater flexibility in setting their own financial-eligibility requirements, benefit packages and payment policies. But with block grants, states have taken a much more aggressive role in how to manage the program. To put it simply, states see the ever-rising costs of Medicaid as the No. 1 issue and managed care as the best solution for reducing those costs.