How do Medicaid managed care (MCO) and fee-for-service (FFS) programs compare in terms of health care utilization after discharge home from the hospital?

Medicaid managed care is associated with lower emergency department use and higher follow-up rates after hospital discharge—but these gains are paired with higher readmission risk among older adults and persistently low overall follow-up, highlighting ongoing gaps in care transitions.

In a cross-sectional analysis of 1.65 million hospital discharges among Medicaid beneficiaries from 2015–2019 and 2021–2022, we examined post-discharge health care utilization, including emergency department visits, observation stays, readmissions, and clinic follow-up visits. Across the study period, most beneficiaries were enrolled in managed care (64.1%), reflecting the increasingly dominant role of MCOs in Medicaid coverage.

Findings showed consistent differences in utilization patterns by program type. MCO enrollment was associated with lower probability of emergency department visits (−1.2 percentage points for ages 18–49 and −2.2 percentage points for ages 50+) and higher probability of follow-up visits (+10.6 and +20.4 percentage points, respectively). However, among older adults, MCO enrollment was also associated with a higher readmission risk (+1.6 percentage points). Observation stay rates were similar across program types.

Despite improvements in follow-up under managed care, overall clinic follow-up rates remained modest—29% among younger adults and 39% among older adults. At the same time, readmission rates remained substantial (around 18–19%), and disparities in follow-up persisted across certain demographic and clinical groups. Notably, transitional care management (TCM) visits—designed to support patients in transitioning from the hospital back to their communities—were rare, occurring after fewer than 2% of discharges, suggesting a missed opportunity to strengthen care transitions.

While managed care may improve some aspects of post-discharge care, important gaps remain. Future work should examine how care coordination, access to post-acute services, and network design can better support successfully transitions from hospital to home—especially for older and more medically complex Medicaid beneficiaries.

Article link: https://academic.oup.com/healthaffairsscholar/article/4/4/qxag073/8541476