Many states have attempted to maximize the benefits of managed care by requiring beneficiaries to enroll. Direct Marketing Increases Enrollment in Managed Care But Has Resulted in Some Abuses

In some managed care programs—primarily those that are voluntary—states rely on participating MCOs to inform beneficiaries about managed care and to encourage them to enroll. Many of these abuses have resulted in access problems for beneficiaries—which are sometimes compounded by MCOs’ delays in processing beneficiaries’ requests to disenroll from their plan. In addition to these actions, four states—California, Florida, New York, and Tennessee—have since banned or restricted door-to-door marketing by MCOs. Each state also has elected to assume—either directly or through its counties or enrollment broker—the enrollment function and, as part of this process, to concentrate its resources on educating beneficiaries about managed care and helping them select a health plan rather than be assigned to one by default. These states prefer that, when multiple plans are available, beneficiaries choose their own plan—as opposed to being assigned to one by the state. Generally, various community groups and programs—such as churches, Head Start, maternal and child health programs, programs for homeless people, and legal aid services—promote beneficiary understanding of a state’s managed care program and provide assistance to beneficiaries in choosing an MCO. Measures of the Effectiveness of Education and Enrollment Efforts Are Limited

Collectively, the states we visited point to a number of data sources that can indicate beneficiary understanding of and satisfaction with the Medicaid managed care program. However, these sources—as currently designed and analyzed—do not directly measure the effectiveness of their enrollment and education programs. However, these surveys generally have focused on beneficiary views on the overall quality of care received and have suffered from very low response rates. To better measure the effectiveness of their education and enrollment programs, states might include in their satisfaction surveys specific questions related to these programs. This process also can be difficult for new beneficiaries who are unfamiliar with fee-for-service or managed care. While the rate at which beneficiaries select an MCO is one available indicator, it alone does not reflect the degree to which Medicaid beneficiaries understand and appropriately use the managed care system. Specifically, these states have restricted the types of direct-marketing activities MCOs can use. Scope and Methodology

To describe the role of marketing in expanding participation in managed care and the types of marketing and enrollment abuses that have occurred in Medicaid managed care to date, we obtained and reviewed documentation from state Medicaid agencies and state attorneys general offices. To identify states’ efforts to measure the effectiveness of their education and enrollment approaches, we discussed the use of various performance indicators with program officials in the four states. Prosecuted and convicted MCO representatives and state employees Recouped $25,000 in payments to plans for fraudulent enrollments Established fines of up to $5,000 for each violation of marketing and enrollment contract requirements Established fines of up to $10,000 per Medicaid beneficiary enrolled as a result of marketing fraud (continued)

Enrollment Broker Contracts in Missouri and Ohio

Of the four states we visited, Missouri and Ohio elected to use enrollment brokers to conduct their Medicaid managed care education and enrollment functions. A recorded menu will provide information on how to obtain these lists.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on state efforts to enroll Medicaid beneficiaries in managed care, focusing on: (1) the role of managed care organizations (MCO) in marketing and expanding managed care participation; (2) the types of marketing and enrollment abuses that have occurred and states' efforts to curb these abuses and ensure that beneficiaries are informed about their health plan options; and (3) state efforts to measure the effectiveness of their education and enrollment approaches.

What GAO Found

GAO found that: (1) to boost enrollment in their Medicaid managed care programs, especially where participation is voluntary, some states have allowed MCOs to use various direct-marketing strategies, including door-to-door marketing, to encourage beneficiaries to sign up with their plan; (2) however, some MCOs and their agents have engaged in unscrupulous practices to maximize beneficiary enrollment, and thereby maximize plan revenues and commissions; (3) these practices include bribing public officials to obtain confidential information on beneficiaries, paying beneficiaries cash and other incentives to sign up, deliberately misinforming beneficiaries about access to care, and enrolling ineligible beneficiaries; (4) to address or avoid these marketing problems, many states have banned or restricted direct-marketing activities by MCOs and have retained responsibility for enrolling or disenrolling Medicaid beneficiaries; (5) as part of their enrollment programs, these states devote considerable efforts to facilitating beneficiaries' difficult transition from fee-for-service to managed care; (6) to do this, they have developed strategies to help beneficiaries understand the principles of managed care and make the often complex decisions involved with selecting an MCO; (7) despite their common emphasis on using the enrollment process as an opportunity to promote beneficiary understanding of the program and selection of an MCO, the four states GAO visited varied in their specific approaches, in part, due to their goals and circumstances; (8) these four states' education and enrollment efforts are also often augmented by community groups, such as maternal and child health advocates, and by MCOs, who are contractually required to inform enrollees on a continuing basis of plan services and operations; (9) although community groups in the four states generally believe that their states' education and enrollment efforts have facilitated beneficiaries' transition or introduction to managed care, methods used to measure the effectiveness of these approaches have been limited; (10) state officials and experts GAO contacted consider the best current measure to be the rate at which beneficiaries select their own health plan, rather than being assigned to one by the state; (11) while these states attempt to reach voluntary selection rates of 80 percent or higher, their actual experience has ranged from 59 to 88 percent; and (12) as general measures of the overall operation of their Medicaid managed care programs, these states also track other indicators, but none of these was designed or analyzed to specifically measure the effectiveness of the education and enrollment process.