Medicaid Managed Care Versus Fee-for-Service

Two patients hand you what looks like the same Medicaid card. One claim goes to the state. The other goes to a commercial insurer. Almost everything downstream differs.

Fee-for-service

The state is the payer. It sets the fee schedule, the filing window, the authorization rules, and the appeal path. One set of rules for the whole program.

Managed care

The state contracts with private plans and pays them a capitated rate. The plan then adjudicates your claim under its own rules, within the bounds of its state contract.

So the payer is a commercial insurer. The filing window is the plan's, frequently shorter than the state's. Authorization requirements are the plan's. Appeals go to the plan first, and only reach the state after the plan's process is exhausted.

Why this trips practices

• One internal rule. Staff learn "Medicaid works like this" from the fee-for-service side and apply it to managed care claims that follow different rules.
• Appeals sent to the state on a managed care denial, which wastes the plan's window.
• Authorization assumed unnecessary because the state does not require it for that service.

The verification question

Eligibility must answer two things: is Medicaid active, and if so, which plan is the patient enrolled with today? The second question is the one that determines where the claim goes and which rules apply — and it is the one most eligibility checks are not configured to surface.