Medicaid 2.0 Provides Blueprint for Healthcare Reform in Garden State

New Jersey’s Medicaid program serves almost 2 million clients; increased cost efficiencies and enhanced responsiveness are a must — especially with ACA under fire

New Jersey’s Medicaid program, the health insurance plan that covers nearly one in every five residents, is in desperate need of modernization to better serve patients and provide them higher-quality care while remaining financially sustainable in the years to come.

That’s the assessment of a diverse group of healthcare stakeholders convened more than a year ago by the New Jersey Health Care Quality Institute to review the massive program, explore successful efforts in other states, and recommend reforms to improve the delivery of Medicaid in the Garden State. Representatives of the group, whose work was funded by the Nicholson Foundation, unveiled on Monday the results of their work: the Medicaid 2.0 Blueprint, a detailed plan with 24 specific recommendations designed to make the system more efficient, better integrated, and more responsive to patient needs.

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The blueprint does not, however, offer state officials a strategy to address the impact of a potential repeal of the federal Affordable Care Act — now under intense debate in Washington, D.C. . Obamacare added more than 550,000 patients to the state’s Medicaid plan that now covers 1.8 million New Jerseyans. NJHCQI’s president and CEO, Linda Schwimmer, said when the project launched the group knew there would soon be a new president and new governor, come 2018, but not who would be elected or what their policy positions would entail. “But we did know we had a lot of fiscal challenges already,” Schwimmer said.

Reforms could save $450M

New Jersey’s Medicaid program now costs taxpayers more than $15 billion annually — a tab paid by a mix of state and federal dollars — and consumes nearly one out of five dollars in the state budget, according to the report. While the blueprint outlines some reforms that could save as much as $450 million, this will not happen overnight and could require upfront investments in time or new technology.

However, the state remains mired in a years-long funding crisis, the blueprint notes, adding that “there is a very real prospect that New Jersey Medicaid funding will remain flat, at best, and at worst, decline significantly.” Resources for the program are endangered in part by efforts by President Donald Trump and Republicans in Congress to repeal the ACA and replace it with a new funding system, which advocates for the law have said could eliminate some $4 billion in federal dollars from New Jersey’s Medicaid budget.

But this federal instability, as well as political and policy changes likely to accompany a new governor, underscore the need for a well thought-out plan to sustain Medicaid, the report’s authors said. No matter who is elected, “they will benefit from having a ready-to-access plan” that can improve the quality of Medicaid while reducing the cost, explained Joan Randell, Nicholson’s chief operating officer.

Nicole Brossoie, a spokeswoman for the state Department of Human Services, which directly oversees the Medicaid program, said it was pleased to see the report included many recommendations that are already “completed, underway or in the planning stages” through existing reform efforts. “The recommendations made by stakeholders reinforce the merit of the delivery system reforms, efficiencies, and advances the department has made, most significantly under the leadership of Gov. [Chris] Christie,” she said.

To create the blueprint, the quality institute held dozens of meetings with at least 100 stakeholders, including hospital groups, primary-care physicians, insurance companies, pharmaceutical companies, labor unions, legal experts and advocates for people with disabilities, senior citizens, women’s health, and other patient groups. Staff members consulted with programs in Connecticut, Ohio, Oregon, and New York and discussed best practices with New Jersey officials in multiple state departments.

The blueprint offers recommendations in five areas: access and quality, integrating behavioral and physical health, eligibility and enrollment, purchasing authority, and value-based purchasing. The action items range from improving eligibility processing to increasing the accuracy of network directories to finding a way for Medicaid to pay for long-term substance-use disorder treatment, something that is difficult under the current federal guidelines.

Concerns over federal funding

“This is a really big deal,” explained Sen. Joseph Vitale (D-Middlesex), the longtime chairman of the Senate Health Committee, who led efforts more than a decade ago to expand Medicaid in advance of the ACA. Vitale agreed that the timing was critical, given concerns over the federal funding, and praised the practical nature of the recommendations. “Not only are they smart, but it’s, ‘Can we get the work done?’,” he said.

Matthew D’Oria, NJHCQI’s chief transformation officer, outlined four priorities that are particularly important, starting with establishing an Office of Health Care Transformation, a model implemented in Ohio under Gov. John Kasich, a Republican who ran for president. New Jersey has at least five state departments involved with Medicaid and D’Oria said these agencies have different goals and tend to develop and implement policies in their own silos.

“These issues are difficult to manage without a global healthcare office” that can cut across traditional government boundaries, he said. (Brossoie, with DHS, said there are already several interdepartmental working groups or task forces dedicated to this effort.)

The group also highlighted the need to expand the use of Episode of Care payment models that allow Medicaid to bundle all payments related to a specific condition and reimburse providers based on the quality of care, not the number of treatments. This “value-based care” technique is being tested by a number of private insurers in an effort to reduce costs and improve patient outcomes.

Inefficiencies in maternity care

Particularly ripe for this reform is maternity care, D’Oria said, which now involves an inefficient system and poor outcomes, including high C-section rates, low birthrates, and significant expenses for infants who end up in neonatal intensive-care units. Medicaid pays nearly $1 billion a year for maternity care and covers 42 percent of the births in New Jersey, he added. (Brossoie said the state already has an EOC program that covers many Medicaid births and is working to develop new programs under the same model.)

D’Oria also stressed the need for better-integrated physical and behavioral healthcare, an issue that has recently become a focus for healthcare reformers in New Jersey. In a report issued last spring, Prof. John Jacobi and colleagues from Seton Hall outlined a number of regulatory and other hurdles that present challenges to better integration, and the topic was the focus of a panel at the NJ Spotlight on Cities Conference in October. D’Oria said some progress has been made to address these concerns — a point Brossoie also stressed — and additional guidance should be forthcoming in a separate report Nicholson expects to publish in the coming months.

Another priority for reform is expanding access to telemedicine, or telehealth, D’Oria said. Using videoconferencing or other technology to connect physicians can help them with new training or provide opportunities for easier consultations, he said. Eventually, patients could be part of a “hospital without beds,” D’Oria noted, describing technology that allows an individual in bed at home to be wired and fully connected with hospital staff elsewhere. (Brossoie said these options will be possible under reforms already underway.)