October 4, 2023  – Indiana is poised to enact a significant transition towards managed care in July 2024. Officials are currently finalizing a potential $15 billion worth of contracts to aid the shift to managed care. 

To provide context, managed care is a systematic approach to healthcare delivery where a centralized entity coordinates comprehensive care for beneficiaries for a pre-determined sum. This entity, referred to as a managed care organization or managed care entity, coordinates all types of health care services, ranging from in-home care to nursing homes. It is an alternative to the traditional fee-for-service model where providers individually charge for each service.

While the majority of Medicaid beneficiaries in Indiana have transitioned to managed care, a crucial segment — the elderly and disabled reliant on long-term care — remain under the older model.

Earlier in the fiscal year, the state administration endorsed four Managed Care Entities (MCEs): Anthem Blue Cross and Blue Shield, Humana Healthy Horizons in Indiana, Molina Healthcare of Indiana and United Healthcare Community Plan. 

The Family and Social Services Administration (FSSA) webpage about managed care stated, “Through a person-centered approach, these MCEs will be integral to achieving our goals to make it easier for individuals to get home services, to create seamless coordination between Medicaid and Medicaid, to align quality with payment and to bend the cost curve related to caring for a growing aging population.”

Their articulated mandate encompasses the streamlining of access to home-based services, enhancing Medicaid program coordination, ensuring service excellence, and efficiently managing the escalating costs associated with an aging populace.

The formal initiation of Indiana’s managed care program is slated for July 1, 2024, with eligible beneficiaries set to select their preferred MCEs in the preceding months.

Indiana, with a notably aged demographic, faces impending challenges. By 2035, analysis suggests that the state will have more adults above the age of 65 than children below 18. Despite a substantial presence of nursing facilities, the state’s investment in home- and community-based services appears disproportionate.

“Institutionalized care has increased at a rate outpacing some of our other types of benefit categories … (from) 2016 to 2023,” said Cora Steinmetz, the state’s Medicaid director. “The per member, per month costs for managed care populations increased by 18% whereas the institutionalized population per member, per month over that same time period … increased by 42%.”

The transition to managed care will allows individuals in Indiana better choices and quality of care, while also keeping healthcare costs lower for the state. 

However, the shift will not be made without taking the right steps to ensure everyone is ready. Contracts will not be awarded to MCEs until they each undergo a “robust readiness review.” Each MCE will need to provide services statewide and have plans in place that allow members to switch between plans that meet their needs and integrate services.