The Arizona Long Term Care System.

The Arizona Long Term Care System (ALTCS) is the first statewide capitated managed care system that combines Medicaid acute and long-term-care services. ALTCS provides institutional, residential, and in-home services to elderly and disabled Medicaid recipients who meet the criteria for placement in a nursing facility. The capitation payment structure creates incentives for contractors to serve members in their own homes or in residential settings rather than in nursing facilities. Regular monitoring, case management oversight, and member satisfaction surveys assure that services are provided when needed in a cost-effective manner. As a result of the success of the 6-year-old program, a cap on the number of members who can receive home and community-based services, imposed at the program's inception in 1989 at 5%, has been increased to 40% in 1995. Despite this expansion of home and community care, an independent evaluation found that ALTCS expenditures are 17% lower than would have been incurred in a fee-for-service system.