Contracting and accountability in state medicaid reform: Rhetoric, theories, and reality

Medicaid reform, which has been central to state government reform throughout the United States, represents conceptual and implementation challenges for practitioners and scholars. This article investigates one such reform, in Kansas, where the state contracted with nonprofit agencies for Medicaid case management services We examine policy rationales for this social service reform in light of the actual economic and management environments. We offer a typology of contract management complexity which articulates how structural factors affect contract management challenges; it indicates that this social service reform presents substantially greater complexity than more traditional service contracting. Our analysis shows that key aspects of the market model of contracting are absent in this reform, reflecting a gap between the political rhetoric which surrounds the reform and the reality of the contracting experience. The lack of market conditions to impose discipline an contractors raises questions about contract management capacity and administrative accountability. The level of management complexity suggests the need for well trained contract management staff and especially sensitive accountability structures to facilitate contract monitoring and minimize principal-agent complications.