Emergency room overutilization is a leading cause of today's ever-increasing healthcare costs. The majority of patients seen in emergency rooms nationwide are on Medicaid, for non-emergency reasons. The federal government launched Medicaid Managed Care programs to provide better health care delivery, adequately compensate providers, and reduce health care costs. Did Medicaid Managed Care resolve the issues and resolve the issue? The answer is “yes” and “no”. In the early 1980s and 1990s, the federal Medicaid program was challenged by rapidly increasing Medicaid program costs and a growing number of uninsured people. One of the main reasons for the overall increase in health care costs is the overuse of hospital emergency rooms. This is a direct result of the absence of a primary care physician and/or family physician who serves as the primary source of health care for an individual and/or an entire family. The traditional Medicaid program does not offer, or require, that beneficiaries choose a primary health care provider. doctor like its Medicare counterpart. Medicare still operates under traditional fee-for-service methodology and does not require beneficiaries to identify a primary provider or have direct access to specialty services. This allows for a cost-sharing approach that results in higher expenses and does not cover prescription drugs or benefits. In an effort to provide better services and access to health care as well as reduce costs, the federal government has allowed states to move toward managed services. care and proposed mandatory statewide implementation for the Medicaid population. In order to make major changes like these, states must request waivers from Medicaid regulations... middle of document ...... sive. (Practical Trends). " Clinical Psychiatry News 33.2 (February 2005): 88. (1). Academic OneFile. University of Phoenix. Retrieved February 25, 2013 from: .5. Quality Monitoring and Improvement in Medicaid Managed Care. (Requirements in quality assurance reporting). In Journal of Public Health Management and Practice, 10, p321(9).6. Cost and utilization analysis of a service diversion project. Pediatric Emergency, 116, p1075(5). Retrieved July 11, 2013 from InfoTrac OneFile via Thomson Gale..: