Virginia Moving to Put Most Fragile Medicaid Recipients into Managed Care

As has been the case in other states, Virginia seeks a solution to rising costs for medically fragile patients. Lawmakers have been unwilling to expand Medicaid and likely will not until a cost-containment plan is found.

A report in Virginia says state officials are making plans to shift 130,000 of the state’s elderly and disabled Medicaid clients into managed care, starting in the spring of 2017.

According to the Daily Press of Newport News, beneficiaries who are in nursing homes or getting home care—a category called “long-term services and supports’’—won’t have a choice in the matter. The plan comes after a pilot program involving managed care produced less than half the projected savings because so many Medicaid clients declined to take part.

The report said the decision will affect dual eligibles, a term that refers to those who receive both Medicare, the federally funded program for seniors, and Medicaid, which aids the poor and is jointly funded by states and the federal government. About 43% of the 29,632 Virginia residents in this group declined managed care in a pilot program, well above the 20% predicted.

Advocates for patients who receive the long-term services aren’t happy about the push to get everyone into managed care. But the changeover is seen as a first step to change the minds of legislators who have been unwilling to expand Medicaid. The first step requires doing something to control costs for this smaller group of patients, who consumer two-thirds of the state's $7 billion Medicaid tab even though they number only one-third of the patients.

Virginia is among 20 holdout states that have declined to extend Medicaid to households earning between 100% and 138% of the federal poverty line. This expansion of eligibility was assumed in the Affordable Care Act (ACA) but the US Supreme Court ruled that states could decide on their own whether to make the change.

Already, the difference between states that have and have not expanded Medicaid is showing up in health results. A study published in Diabetes Care found a 23% higher number of diabetes diagnoses among Medicaid beneficiaries in expansion states in 2014.

Like many other states, Virginia already uses managed care for relatively healthy patients in Medicaid, including children. Challenges arise when states seek to move more medically fragile clients into managed care, because there are fears of disrupting longstanding provider client relationships, or concerns that prior authorization rules will cause interruptions in care. In California, lawmakers passed a bill to block Medi-Cal’s attempt to absorb a program for children with life-threatening conditions.

According to the report in the Daily Press, among the issues Virginia is working through are freedom-of-choice requirements that apply in Medicare, as well as issues of providers who lack electronic health systems or don’t want to be part of managed care.