Medicaid Financing of Care Coordination Services for Children and Youth with Special Health Care Needs (CYSHCN)

Care coordination is a core element of efforts to strengthen systems of care that, when designed and implemented effectively, can improve health outcomes and quality of care for children and youth with special health care needs (CYSHCN) and their families while reducing costs. Financing of care coordination is critical to the quality and sustainability of these services and systems. State health officials have expressed a need for assistance in identifying financing strategies to support care coordination systems for CYSHCN. This resource identifies key components and themes across five states’ approaches to financing care coordination for CYSHCN through Medicaid, which can be used to support the implementation of high-quality care coordination as outlined in the National Care Coordination Standards for Children and Youth with Special Health Care Needs (CYSHCN). These standards, released by the National Academy for State Health Policy in October 2020, outline the core, system-level components of high-quality care coordination for CYSHCN and are designed to help state health officials and other stakeholders develop and strengthen care coordination systems for CYSHCN.

Care coordination systems can be financed by a variety of sources and strategies. Given that state Medicaid programs provide health care coverage for nearly half 44 percent of all CYSHCN, it presents an important opportunity to support care coordination services and systems for these children.2 State Medicaid agencies can finance care coordination services for CYSHCN through direct fee-for-service (FFS) reimbursement to providers and/or a Medicaid managed care (MMC) arrangement that includes capitated payments to managed care organizations (MCO). A capitated payment arrangement provides a fixed rate for each enrolled member over a specified period (e.g., per-member per-month), often through contracted Medicaid MCOs.

Funding care coordination services allows state Medicaid programs to set requirements and guidelines regarding reimbursable care coordination services, provider qualifications, and reporting. While MCOs are the primary recipient of Medicaid funding for care coordination services, other entities often also fund or are otherwise involved in care coordination for CYSHCN enrolled in Medicaid. Education systems, public health programs, and behavioral health and social service agencies, all provide care coordination services and supports to CYSHCN and their families. State Medicaid agencies can collaborate with these entities to braid funding and/or guide and administer Medicaid-financed care coordination services for the CYSHCN served by their programs.

Highlights of Approaches to Medicaid Financing of Care Coordination for CYSHCN in Five States

NASHP selected five state Medicaid programs (California, Florida, Georgia, Texas, and Wisconsin) that finance care coordination services for CYSHCN. These states were chosen for their geographic diversity and variation in approaches to payment design, authority, oversight and administration, and quality measurement. To understand each state’s approach, NASHP reviewed publicly available resources including Medicaid state plans and managed care contracts and conducted key informant interviews with two states (Texas and Wisconsin).


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