It’s Still Too Soon to Know Full Effect of Move to Medicaid Managed Care

Andrew Kitchenman | October 5, 2015 | Health Care
The shift from nursing homes to home- and community-based services looks promising, but faces challenges

elderly wheelchair
Moving Medicaid long-term services from nursing homes to home- and community-based care showed promise in its first year, but it’s too soon to know the full effect on the people whose lives have been affected by the change.

Those are among the conclusions of researchers with the Rutgers Center for State Health Policy, who recently published their first report on the expansion of managed care into Medicaid long-term supports and services.

In Medicaid managed care, the government pays insurers to manage all of the patient’s needs, rather than paying for each service separately.

The report also found that the program faces challenges, including state budget constraints that have affected the ability of the New Jersey Department of Human Services to oversee the shift to managed care. In addition, some stakeholders cited in the report are concerned that consumers may be disconnected from resources that could benefit them, and unable to communicate problems with their care. And the report found that both consumers and providers who were required to be a part of the managed-care system wished they had been given the option to remain in the old system, in which providers are paid for each service they give.

The report was based on dozens of interviews with stakeholders conducted in February through June, seven to 11 months [link:|after the shift of long-term services toward managed care in July 2014.

The move to managed care was included in the state’s five-year comprehensive waiver from federal Medicaid requirements, which also provided flexibility to deliver more services in residents’ homes and in community centers rather than in nursing homes.

The report notes that one major state choice limited the effect of the changes: the decision to allow those patients who were already in nursing homes to remain in them on a fee-for-service basis indefinitely. However, all residents who become newly eligible for a nursing care automatically receive managed care.

The change is already showing up in the share of patients served by home- and community-based services, which rose from 26.9 percent of all New Jerseyans eligible for long-term care in July 2014 to 30.6 percent in February. In addition, the share of state spending on long-term services and supports that went to home- and community-based services rose from 38.5 percent at the end of 2013 to 46.1 percent by the end of last year.

According to report authors Jennifer Farnham, Sujoy Chakravarty, and Kristen Lloyd, several themes emerged in their interviews with 34 stakeholders (including representatives of insurers, providers, and patient advocates).

Among them: while state officials had listened to representatives of the various groups involved in the implementation of managed long-term care, “not all were satisfied with the way the state incorporated their feedback,” according to the report. Further, the shift toward home- and community-based care led to some organizations taking on new roles, “which creates learning demands for their staff,” which may have contributed to some patients experiencing a decrease in services, the authors wrote.

The report’s authors didn’t elaborate on which services decreased, although they appeared to be related to the amount of hours of home- and community-based services that patients received, as well as a reduction in some patients’ eligibility for services.

The authors said there wasn’t enough data regarding changes in services or eligibility to say whether this is a general trend in reductions. And while the insurers overseeing managed care were required to continue the services that patients previously received until they had a new plan of care, some recipients experienced a sense of uncertainty about which home- and community-based services they would continue to receive until the insurers sent case managers for their first visit with the patients.

Providers also said that they’ve experienced an increased administrative burden to get credentials and contracts from insurers, as well as to file claims, and have had to wait longer for payments.

Other stakeholders said some residents who receive long-term services at home are in need of visitors. They noted that staff members at one insurer said they spent time “investigating how to get volunteers to provide companionship for members for things like just talking, playing cards together” and other activities.

The authors had to write the report without access to objective measures of the quality of care being provided in the program’s early months. That’s because these measures are based on insurance claims, and at the time the report was written, the data for the claims that were filed in the first several months of managed long-term supports and services still weren’t available.

The report characterized the switch from a care-delivery system based on paying for the volume of services delivered — and on providing care in nursing homes — toward one based on managed care and home- and community-based services as “gradual,” because no nursing-home residents were being forced to move from the fee-for-service system. Therefore, it will take many years for all of the Medicaid long-term care recipients to be covered by managed care.

A representative of the one of the insurers — known as managed-care organizations — said that while the MCOs “were initially unhappy” that the state reduced the effect of the shift by allowing existing nursing-home residents to remain in the fee-for-service system, they later concluded “it was probably better for all involved to have a gradual adjustment.”

The Rutgers center is scheduled to deliver a final report on the experience of long-term care patients in June 2017. They’re soliciting input until then.