Health Advocate: Medicaid Managed Care: Modernized Federal Regulations are Long

Executive Summary

In 1965, when the Medicaid program was created, American health care bore little resemblance to the complex system we have today. One of the most significant changes has been the expanding role of managed care. In its early years, Medicaid was almost exclusively a fee-for-service system in which providers were reimbursed directly by state Medicaid agencies for each service provided. Now, nearly three quarters of Medicaid beneficiaries receive services through some type of managed care arrangement. Nearly all state Medicaid agencies now contract with managed care entities, which can reimburse providers, perform utilization review, respond to patient and provider complaints and set standards for coverage of services.