History of medicaid managed care and substance abuse treatment

This chapter summarizes years of substantial change as Medicaid moved largely from fee for service to a managed care environment. Numerous questions have arisen regarding this momentous shift. In particular, it has been suggested that managed care provided incentives for providers to "cherry pick" clients with low substance abuse severity. Beginning with definitions of substance abuse treatment and managed care, the chapter provides detailed historical information on a state-by-state and year-by-year basis regarding the movement away from Medicaid fee for service and towards assorted managed care programs. States adopted numerous Medicaid innovations chiefly via various waiver mechanisms. The chapter provides comprehensive listings in text and tables showing these transitions with emphasis on changes pertinent to chemical dependency care. Building on this carefully assembled (and unlikely to be found elsewhere) record, the chapter examines impact of managed care transition on severity of Medicaid clients in treatment for substance abuse. Using hierarchical linear models, it is concluded that Medicaid managed care led, if anything, to slight increase in severity of substance abuse treatment clients.