Unconstitutional or Impossible: The Irreconcilable Gap between Managed Care and Due Process in Medicaid and Medicare

Posted: 8 Mar 2001

Abstract

Managed care, as currently constituted, is inherently unconstitutional in the Medicaid and Medicare context. The due process rights of Medicaid and Medicare beneficiaries are violated because each medical treatment decision is conflated with a Medicaid/Medicare coverage decision, and these decisions are made by care providers and managed care organizations that are subject to systematic incentives to deny even covered care. Medicaid and Medicare coverage decisions are subject to constitutional due process requirements which, at a minimum, include the requirement of an unbiased decision maker. For managed care to pass constitutional muster in the Medicaid and Medicare contexts, the coverage decision must be made by a decision maker who is not subject to incentives to deny necessary care. The constitutional infirmity of managed care in the Medicaid and Medicare context cannot be cured simply by providing more or better notice and hearing rights. It is logically impossible to provide adequate notice and hearing for every treatment decision, which logically includes every decision not to prescribe care. In order to comply with the demands of the Constitution, managed care, as it currently exists, cannot be a part of Medicaid or Medicare. Treatment decisions must be made by doctors who do not make the coverage decision and who are not subject to systematic bias to deny necessary health care.

JEL Classification: I18

Suggested Citation

Wright, Jennifer L., Unconstitutional or Impossible: The Irreconcilable Gap between Managed Care and Due Process in Medicaid and Medicare. Available at SSRN: https://ssrn.com/abstract=262192

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