The Geographic Expansion of Medicaid MCOs

Research center:
Lead researcher:
Project funded:
September 2019
Project completed:
February 2021

Since 2012, 23 states' Medicaid programs have expanded the use of Managed Care Organizations (MCOs) into new geographic areas, most of which are rural parts of the state. Historically, MCOs were less common in rural areas due to a perception of limited ability to form provider networks, but the motivation of better prediction and control of costs has led states to rely more on managed care. The problem is that some tension exists between these competing priorities, and we may expect that states vary in their experience with this policy change.

This research project used county-level data to characterize the places to which MCOs were expanded, focusing in particular on population density, provider density, sociodemographics, and health indicators to assess the extent to which MCO geographic expansion has occurred in compliance with previously held network adequacy standards (vs. a scenario in which standards have weakened or are not enforced). We introduced a method for calculating a network adequacy score based upon travel distance calculated from provider and population geographical data. We then hypothesized that, relative to this uniform measure of network adequacy for residents of rural counties, states that enforced compliance with previously held standards would have higher percentages of enrollees with adequate access to primary care and emergency services. We also conjectured that micropolitan counties would perform better than rural non-core counties and that better scores on some health indicators would be associated with a better network adequacy score.

Broadly, the goal was to assess the extent to which MCOs are working in terms of access in rural areas. While cost containment is an important policy goal, it is possible that it comes at the expense of access to care for some rural people. Our work helps to inform this discussion by quantifying accessibility of providers and by describing which types of rural places can successfully be served by MCOs. A secondary aim was to look for evidence of improved health outcomes in rural counties to which managed care is expanded.