Challenges Await as Medicaid Managed Care Absorbs the Most Fragile Patients

As more and more Medicaid recipients fall under the umbrella of managed care, the easy-to-serve populations have been absorbed. In the 39 states that had Medicaid managed care through the end of 2014, the expansion managed care into healthcare programs for the poor is taking place among the most fragile, vulnerable beneficiaries, including children, and it’s raising questions whether there are some populations for whom this delivery model is not appropriate.

A few examples:

· In California, Kaiser Health News reported today on the quest to fold California Children’s Services into Medi-Cal. The $2 billion program that serves 180,000 children with birth defects or life-threatening illnesses, would enter managed care in phases through 2019. The shift would include a network of advocates and specialized pediatric hospitals. Critics of the move are highly skeptical the conversion will work, citing a state auditor’s report that found inadequate networks and thousands of unanswered calls to the state ombudsman each month.

· In New Hampshire, officials recently resolved a bottleneck over a $1.6 billion Medicaid managed care contract involving 2 companies, Well Sense, a unit of Boston Medical Center Health Plan, and New Hampshire Healthy Families, a unit of Centene. The deal, which will run through June 2017, will soon absorb 10,000 recipients and include those with development disabilities, nursing home residents, and patients receiving home care. The impasse, which had been over delivery of mental health services, was ended with a month-to-month plan that mental health advocates described as a “great step backward.”

· In a highly publicized case in Nebraska, a court last week rejected efforts by the mother of a severely autistic and disabled man to restore an arrangement his mother previously had with the state’s Department of Health and Human Services (HHS) to be paid as his private-duty nurse. The contract was canceled when HHS shifted to managed care; the contractor, Coventry, said the nursing services were not medically necessary. The mother, Dee Shaffer, is a licensed practical nurse and has nutrition credentials to provide specialized care. She argued that she was providing excellent care and that with her resources running out, the alternative will be to place her son in a nursing home at a higher cost.

Legislators in California have introduced a bill to slow down the CCS transition, and concern over the most fragile patients was among the issues that slowed down New Hampshire’s transition. A spokeswoman for the California Association of Health Plans said there was support for the concept but concern whether the rates for these medically fragile children would be adequate to cover their care.

Issues such as narrow networks, the process that patients can use to appeal denials, and how managed care should integrate fragile patients with long-term needs are among the thorny issues that will be addressed in new regulations now under review at CMS. The growth of Medicaid managed care compelled the federal government to propose a new rule, which is now pending following a comment period that ended July 27, 2015.

Among the proposed elements is language that speaks to the right of fragile patients to get care at home when possible, if that is what the patient prefers. The rule calls for: “Services and supports provided to beneficiaries of all ages who have functional limitations and/or chronic illnesses that have the primary purpose of supporting the ability of the beneficiary to live or work in the setting of their choice, which may include the individual’s home, a provider-owned or controlled residential setting, a nursing facility, or other institutional setting.”