Managed Care; in It for the Long Term: Using Managed Care for Medicaid Long-Term Care Is Once Again Getting States' Attention

By Foxhall, Kathryn | State Legislatures, June 2005 | Go to article overview

Managed Care; in It for the Long Term: Using Managed Care for Medicaid Long-Term Care Is Once Again Getting States' Attention


Foxhall, Kathryn, State Legislatures


Pamela Parker, director of Minnesota's managed long-term care programs, has reason to be proud. Provider-contractors under her program for people with disabilities got 21 percent of the those they serve out of nursing homes. And she notes that some contractors who use nurse practitioners to coordinate care for nursing home residents apparently have cut hospitalization rates in half.

But she is just as quick to warn that Minnesota's eight-year-old effort, which serves several specific rural and urban areas in the state, is unique to Minnesota. That state's good luck doesn't mean managed long-term care will work in states with different options, she says.

After a slow period of about a decade, there's now scattered new interest across the states in trying managed care for Medicaid long-term care for the elderly and for younger disabled people.

The idea is that contractors--nonprofit, commercial or governmental--will have the incentive to keep people out of nursing homes and in the least expensive appropriate level of care.

But despite some movement in the 1990s, the idea has not caught fire. There are probably several reasons, according to experts watching these trends. The backlash against managed care in general made the movement toward such arrangements politically unattractive. Many patient advocates and health care providers worry that a managed care organization's incentive to save money will result in fewer and worse services. Health care providers, including nursing homes, have resisted the idea of states contracting with managed care organizations that could then contract with only selected providers and also set the rates for services.

Other problems, according to observers, are a lack of providers to take on the managed care organization role, an absence of infrastructure in the states to implement and oversee the efforts, and the long planning time needed to get the work underway.

Currently, only about 2.3 percent of Medicaid long-term care beneficiaries are in managed care programs where there is risk to the provider for controlling costs, according to recent research from Medstat and the Muskie School of Public Service at tire University of Southern Maine. Most of those programs are in one of eight states scattered across tire United States, and most are relatively small.

Only Arizona has its entire Medicaid long-term care population, about 23,000 people, under a managed care plan. And, as of 2004, that state had more than twice the enrollees of any other, according to the Medstat/USM research.

But now, for example, Maryland is planning a pilot to contract with organizations to integrate acute and long-term care in two locations. The program will be mandatory for people who are dually eligible for Medicaid and Medicare as well as for Medicaid recipients who need the nursing facility level of care.

Washington has chosen a vendor for a pilot to serve 3,000 people who are elderly or have disabilities and integrate medical care, substance abuse treatment, mental health and long-term care services.

Texas has a proposal to expand its managed long-term care program, piloted over the last seven years in the Houston area, to several other metropolitan areas. Brian Burwell, a vice president at Medstat and one of the authors of the Medstat/USM research, estimates that the Texas expansion alone would double the number of people in managed long-term care nationally. The plan, however, has run into controversy in the legislature, including opposition from providers and advocates. It is still awaiting a decision.

New programs or expansions are also anticipated in Florida, Minnesota, Massachusetts and California.

IT'S THE BUDGET, STUPID

State legislators can recite by heart the basic motivator for the interest: Medicaid costs have increased by over 50 percent in just four years.

"One of the major cost drivers for Medicaid is long-term care and other services for the elderly and disabled population, so it is vital that our reforms address those areas experiencing the most growth in cost," says Texas Senator Jane Nelson, chair of the Health and Human Services Committee. …

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