Association for Public Policy Analysis & Management

The Florida legislature created mandatory managed care for Medicaid enrollees via the Statewide Medicaid Managed Care (SMMC) program that was implemented between May and August of 2014. Medicaid managed care penetration rates increased from 42.7% in April 2014 to 79.0% in 2015. The primary goals of SMMC were to cut costs for the state Medicaid program, and to emphasize patient-centered care and personal responsibility, and the program requires SMMC enrollees to select a primary care provider. The objective of this study is to investigate the impact of the implementation of SMMC program on access to and quality of primary care for Medicaid enrollees. We examine discharges for Ambulatory Care Sensitive Conditions (ACSCs), which are conditions for which good outpatient care or early intervention can potentially prevent the need for hospitalization, and are useful indicators for assessing access to care in the community.

We use a difference-in-differences approach, by comparing the change in incidence of ACSC-related discharges among Medicaid enrollees before and after the implementation of SMMC, relative to the change among privately insured. We control for patient age, sex, race/ethnicity, fixed effects for county of residence, year fixed effects, and a county-specific linear trend. The key explanatory variable is an interaction between the indicator for Medicaid and the indicator for the post period. We use the Prevention Quality Indicator (PQI) algorithm developed by the Agency for Healthcare Research and Quality (AHRQ) to identify discharges for ACSCs.

Inpatient data obtained from the Agency for Health Care Administration for the 215 hospitals in the state of Florida for the period from January 2010 to June 2015 were examined (excluding data from quarter 2 and 3 of 2014 when the implementation occurred). The analysis includes 3,645,515 discharges for Florida residents between the ages of 18 and 64 with a primary payer of Medicaid or private insurance, and no missing values on covariates.

Implementation of SMMC is statistically significantly associated with a 0.35 percentage point reduction (about 3.6 percent) on the incidence of overall composite PQI, and a 0.21 percentage point reduction (about 3.0 percent) on the chronic composite PQI among Medicaid enrollees in the post-implementation period. The effects were significant only in counties with above median Medicaid managed care penetration rates in the pre-implementation period. There were no significant differences in trends in ACSCs in the pre-implementation period between Medicaid enrollees and the privately insured.

Implementing mandatory managed care in Medicaid in the state of Florida is associated with a 3.6% reduction in discharges for conditions that can potentially be prevented with access to outpatient care.

The federal government and state of Florida spent a combined total of over $23 billion on the Medicaid program in 2014, and Medicaid comprises the largest component of the state’s budget. Increasing Medicaid managed care penetration in Florida has significant effects on reducing preventable hospitalizations, and can potentially achieve savings for the state.