States, in­sur­ers un­der­min­ing Med­i­caid man­aged care

Modern Healthcare - - NEWS - By Vir­gil Dick­son

Health sys­tem CEO Mary Star­mann-Har­ri­son said she and her staff tried to be pa­tient in deal­ing with Molina Healthcare’s Med­i­caid man­aged-care plan in Illi­nois. Ap­prov­ing a provider at one her hospi­tals to be in-net­work some­times took as long as six months, said Star­mann-Har­ri­son, CEO of Hos­pi­tal Sis­ters Health Sys­tem, which has 13 hospi­tals across Illi­nois and Wis­con­sin.

Prior au­tho­riza­tions were dif­fi­cult to get and re­im­burse­ment was slow and un­re­li­able. Her sys­tem com­plained re­peat­edly about these is­sues but to no avail. “We tried for a solid year to work with (Molina) on the op­er­a­tional is­sues, and we just felt we’re at a point where we were not serv­ing the pa­tient well,” she said. So, HSHS last De­cem­ber stopped deal­ing with Molina. A Molina spokes­woman said HSHS sev­ered the re­la­tion­ship with­out cause, adding “we worked with them in good faith in an at­tempt to come to an agree­ment, but un­for­tu­nately (we) could not reach a res­o­lu­tion.”

Chal­lenges in Illi­nois are a cau­tion­ary tale for the rest of the coun­try and high­light how im­por­tant it is for Med­i­caid man­aged-care plans to work ef­fec­tively with providers.

“The back­bone of any man­aged-care pro­gram begins with your provider net­work,” said Mark Rivera, founder of MCC, a man­aged-care con­sult­ing firm. “Keep­ing them happy and pay­ing claims on a timely ba­sis is crit­i­cal.”

Other states have faced their own woes in im­ple­ment­ing Med­i­caid man­aged care in re­cent years. Iowa’s pro­gram faces se­vere fi­nan­cial chal­lenges. Ameri­group, Amer­iHealth Car­i­tas and Unit­edHealth­care lost an es­ti­mated $450 mil­lion com­bined since the pro­gram be­gan in 2016. The state re­cently asked the fed­eral govern­ment for $225 mil­lion in risk-corridor pay­ments to make up for the losses. Last Oc­to­ber, the CMS re­jected Kansas’ re­quest to ex­tend its man­aged-care pro­gram, KanCare, say­ing it failed to meet fed­eral stan­dards and risked the health and safety of en­rollees.

In Fe­bru­ary, Illi­nois Gov. Bruce Rauner, a Repub­li­can, an­nounced plans to re­vamp the state’s Med­i­caid man­aged-care pro­gram and can­cel­ing ex­ist­ing con­tracts two years be­fore they were set to ex­pire. That was partly be­cause other providers had raised sim­i­lar con­cerns about other Med­i­caid plans.

It’s un­prece­dented for a state to can­cel Med­i­caid man­aged-care con­tracts midterm, said Ernest

Jaramillo, founder of Salud Ac­tu­ar­ial Con­sult­ing, who ne­go­ti­ates rates with Med­i­caid plans on be­half of a num­ber of states.

The ra­tio­nale of state adop­tion of man­aged care has grad­u­ally changed over the past two decades, ac­cord­ing to Judy Solomon, vice pres­i­dent for health pol­icy at the Cen­ter on Bud­get and Pol­icy Pri­or­i­ties.

In pre­vi­ous years, Solomon said she would have cited pre­dictabil­ity of spend­ing as a pri­mary driver. “While I think that is part of it, states are in­creas­ingly de­vel­op­ing types of man­aged-care ar­range­ments that are in­tended to en­hance co­or­di­na­tion of care, in­clud­ing across be­hav­ioral and phys­i­cal health, and im­prove out­comes,” she said.

Thirty-nine states were us­ing man­aged care for at least part of their Med­i­caid pop­u­la­tion as of Dec. 31. Na­tion­ally, about 73% of Med­i­caid ben­e­fi­cia­ries, more than 50 mil­lion peo­ple, now are cov­ered by private plans, ac­cord­ing to research firm PwC.

Med­i­caid man­aged care ex­panded in Illi­nois in 2011 when the state man­dated that 50% of its 3 mil­lion Med­i­caid ben­e­fi­cia­ries be en­rolled in a plan by the start of 2015.

Now Rauner is propos­ing to ex­pand the num­ber of ben­e­fi­cia­ries in man­aged care and re­duce the num­ber of par­tic­i­pat­ing in­sur­ers from 12 to no more than seven by June 30. The new pro­gram would start on Jan. 1, 2018.

He also wants to squeeze more sav­ings out of Med­i­caid to mit­i­gate the state’s bud­get woes. The value of the con­tracts would to­tal $15 bil­lion if 80% of the state’s ben­e­fi­cia­ries were served through man­aged care, up from 65% now.

Sa­man­tha Olds Frey, ex­ec­u­tive di­rec­tor of the Illi­nois As­so­ci­a­tion of Med­i­caid Health Plans, said her mem­ber plans have not been able to per­form to the best of their abil­ity be­cause they were not be­ing paid. As of April, the state of Illi­nois owed Med­i­caid plans nearly $3 bil­lion in cap­i­ta­tion pay­ments, Frey said. The state has not had a bud­get for two years be­cause of a po­lit­i­cal bat­tle be­tween Rauner and the Demo­cratic-con­trolled leg­is­la­ture.

“In or­der to care for our Med­i­caid mem­bers and sup­port our provider part­ners, we need ap­pro­pri­ate re­sources” Frey said.

Dr. James Leonard, CEO of Health Al­liance, a health plan serv­ing cen­tral Illi­nois, cited the state’s bud­get prob­lems as the rea­son his plan left the Med­i­caid man­aged-care pro­gram at the end of 2016. “Fi­nan­cial losses from the Med­i­caid man­aged-care busi­ness line are not sus­tain­able, and we ex­pect no sig­nif­i­cant change in the sit­u­a­tion,” he said in a writ­ten state­ment.

A spokesman for the Illi­nois De­part­ment of Healthcare and Fam­ily Ser­vices, the state Med­i­caid agency, did not re­spond to a re­quest for com­ment on the back­pay claims.

Rauner administration of­fi­cials hope the new con­tracts and consolidation of plans will re­sult in in­creased ef­fi­cien­cies and lower over­all costs for the state. They want to strengthen in­cen­tives for plans and providers to co­or­di­nate care for pa­tients.

“A greater fo­cus on pre­ven­tion and en­hanced care co­or­di­na­tion, and of­fer­ing ser­vices that are ev­i­dence-based and data-driven, will im­prove healthcare de­liv­ery while en­sur­ing sus­tain­able pro­gram costs,” said John Hoffman, a spokesman for the Illi­nois De­part­ment of Healthcare and Fam­ily Ser­vices.

Na­tion­ally, the plans that are best at man­ag­ing care for Med­i­caid pa­tients are those that ef­fec­tively co­or­di­nate their care, said Robert Saun­ders, an as­so­ci­ate vice pres­i­dent at the Na­tional Com­mit­tee for Qual­ity As­sur­ance. His com­pany has an­nu­ally ranked plans based on the qual­ity of their ser­vices for more than decade.

But Illi­nois’ Med­i­caid plans haven’t been do­ing well on care co­or­di­na­tion, some providers say. There has been little ef­fort to en­sure pa­tients are tak­ing their med­i­ca­tions or have transportation to ap­point­ments. And plans haven’t done a good job of keep­ing pri­mary care providers in­formed about their pa­tients’ spe­cialty care.

“The se­cret sauce of man­aged care is sup­posed to be care man­age­ment,” said Dr. John Jay Shannon, CEO of the Cook County Health & Hospi­tals Sys­tem based in Chicago. “Cer­tain plans at­tempted to do it on the cheap us­ing phone banks to make the oc­ca­sional call, in­stead of a more proac­tive ap­proach.”

His sys­tem’s Med­i­caid man­aged-care plan, Coun­tyCare, re­lies on a face-to-face strat­egy with a care man­ager meet­ing with pa­tients to dis­cuss the care they need.

Fal­lon Health, a Mas­sachusetts-based plan that the NCQA ranks as one of the na­tion’s top Med­i­caid plans, uses pre­dic­tive model­ing to iden­tify ben­e­fi­cia­ries who are overus­ing emer­gency de­part­ments. The plan con­nects those pa­tients with a care co­or­di­na­tor, said Dr. Thomas Ebert, the plan’s chief med­i­cal of­fi­cer.

As the Rauner administration moves for­ward in re­vamp­ing the Illi­nois Med­i­caid man­aged-care pro­gram, providers are con­cerned that the administration hasn’t learned the lessons about why the pre­vi­ous pro­gram had so many prob­lems.

Scott Kiri­akos, se­nior vice pres­i­dent for clin­i­cal in­te­gra­tion for Me­mo­rial Health Sys­tem based in Spring­field, Ill., said the gov­er­nor’s timetable is far too am­bi­tious to en­sure a smooth roll­out.

“There isn’t the nec­es­sary amount of time to do the prepa­ra­tion that must oc­cur,” Kiri­akos said. “The gov­er­nor’s pro­posed pro­gram is even more am­bi­tious than the last one. We’re con­cerned we’re go­ing to recre­ate the same ad­min­is­tra­tive is­sues we had the first time around.”


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