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June 18, 2012
TOPEKA Kansas is part of a new wave of states moving to expand managed care to higher numbers of their Medicaid patients.
Gov. Sam Brownback’s KanCare plan, unveiled in November, would begin moving virtually all the state’s 380,000 Medicaid enrollees into managed care plans on Jan. 1.
Nationally, the first wave into Medicaid managed care began in the early 1990s. By 2008, more than 70 percent of Medicaid beneficiaries nationwide were enrolled, largely as the result of state or local government mandates.
There are fewer studies than one might expect of the effectiveness of Medicaid managed care, experts say. And those that have been done have shown mostly mixed results with respect to health outcomes and cost savings. A working paper released in July 2011 by the nonpartisan National Bureau of Economic Research apparently was the first study to examine Medicaid managed care costs over an extended period from all 50 states.
The authors reported that the 13 years of data they reviewed suggested “shifting Medicaid recipients into managed care plans did not reduce Medicaid spending in the typical state.”
Despite the uncertain or uneven results reported by researchers, states have forged ahead with managed care.
Generally left out of the first wave of managed care plans were Medicaid recipients who were elderly or disabled and required long-term services. They tend to be the most needy and thus most costly beneficiaries, and the new wave of expansions, including KanCare, would bring more of them into the plans.
State officials, here and elsewhere, have concluded or hope that including them in managed care will offer new opportunities for savings or at least assure more predictable costs.
KHI News Service reporters have been closely following developments surrounding the KanCare plan. As part of our reporting over the past few months, we have interviewed dozens of people involved in various ways with Medicaid managed care expansions across the nation.
Moise Brutus is a 22-year-old Miami, Fla., man who became a triple-amputee as the result of a motorcycle crash in 2010.
Brutus said he was working as an assistant manager at an auto dealership before the accident and didn't have any experience with Medicaid or other government programs until after the wreck, which left him unable to work or afford private health coverage.
KanCare waiver public forums
Two public meetings are scheduled to take comment on the administration's proposed Section 1115 Medicaid waiver application:
• 2 p.m. June 18 at Hughes Metropolitan Complex at Wichita State University in Wichita, and
• 3 p.m. June 20 at Memorial Hall Auditorium in Topeka.
After a few months on Medicaid, while he was still in the early stages of recovery, the state of Florida sent him a letter saying he needed to enroll in a managed care plan. He ignored the letter and subsequently was “auto assigned” by the state to a plan run by WellCare.
Florida incrementally has been moving more of its Medicaid beneficiaries into managed care, and 85 percent of them are expected to be in managed care plans by 2014.
Brutus said WellCare assigned him a case manager. He spurned her initial efforts to contact him by telephone because he was experiencing profound depression that led him to consider suicide after he had sought “stump revision” surgery through traditional Medicaid and was denied.
“I was lost,” he said. “At that point I was still in a lot of pain physically and emotionally.”
Ultimately, his mother responded to the case manager’s calls and the woman was able to connect with Brutus.
“She took it on herself — kind of like she was on a mission to save the world,” Brutus said of the case manager. “She got me in touch with the doctors I needed, got me the medication I needed, because some of the medications I was taking Medicaid didn't cover. So, she pretty much had to get me an override so I could get the medications, and I went in and did the stump revision. WellCare took care of that.”
He said the case manager also arranged for him to get an additional month of physical rehabilitation sessions.
“To sort of make a long story short, I'm not on any medication at all. I'm walking. They took care of all my prosthetics, my rehab, teaching me how to walk. They got me a new bionic hand. I'm actually the first person to get that approved from Medicaid,” Brutus said.
“I can honestly say I wouldn't be here if it wasn't for WellCare and (the case manager). They're not perfect, but they certainly have helped me a lot. Now, I’m going back to school and I’m pretty much done with rehab. I’m doing some occupational therapy and I’m walking on my own with no assistive device,” he said.
“Would I actually recommend (Medicaid managed care) to anyone? From my experience I would, but speaking logically I'm sure not every story has as happy an ending as mine,” Brutus said.
In June 2011, Brutus was among those who testified at a public hearing on Florida’s Medicaid managed care makeover. His comments for this article were from a March 21 telephone interview with KHI News Service.
A WellCare employee helped arrange the interview.
“A lady actually called me (from WellCare prior to the interview) and spoke with me and she pretty much told me to just tell it how it is, that if I feel like I don't agree with something to definitely let you know,” he said.
WellCare scored better with Brutus than it did with the state of New York, which recently informed the company it had six months to improve performance or face being cut out of its state contract. States rarely have revoked or threatened to revoke a managed care company’s contract for failing to perform, according to a Bloomberg Government study that reported New York adheres to stricter standards than most states.
Jack Maurer, WellCare’s vice president of corporate communications, said the company had responded to the New York assessment by hiring more staff and making other changes.
Anne Dunkelberg is an associate director with the Center for Public Policy Priorities and has studied managed care’s impact on Medicaid in Texas.
In December 2011, federal officials approved the state’s request to expand fixed-cost managed care to Medicaid beneficiaries in 174 rural Texas counties. The five-year demonstration project, approved through a so-called Section 1115 waiver, is expected to expand the Medicaid managed care population in the state to include about 940,000 people.
The waiver allowed Texas to require people who are dually eligible for Medicaid and Medicare to enroll in a managed care plan. The waiver also provided a pool of federal funding to reward hospitals for improving access to care and the outcomes for Medicaid clients and the uninsured.
“The challenge with judging managed care is that when you’ve seen one state’s Medicaid program, you’ve seen one state’s Medicaid program,” Dunkelberg said. “They’re all different, and every state’s health care market is different – dramatically different.”
One of the overarching benefits of managed care nationwide, Dunkelberg said, has been the introduction of measurable outcomes and the notion of linking payments to performance.
But it’s also become clear, she said, that some states are willing to settle for less than others.
Kansas officials have said they expect to have more than 200 performance standards in place once the KanCare contracts are signed, including about a dozen “pay-for-performance” measures for which companies would be paid or penalized, depending on whether they meet them.
Kansans shouldn’t expect KanCare to be free of controversy or heated criticism, Dunkelberg said.
“Murphy’s Law is in full effect when you’re talking about a managed care rollout,” she said. “The things that can go wrong will go wrong.”
Dunkelberg said she thought it was a little unusual that all five KanCare bidders were for-profit insurance companies. State officials have said they plan to choose three from the five for contracts.
“I’m surprised there aren’t any nonprofits in the mix,” she said. “In Texas we have a significant number of nonprofits in Medicaid. It’s always a good idea to have a range of nonprofits and for-profits so you can compare performance and customer satisfaction.”
A 2011 study by the Commonwealth Fund found that publicly traded, for-profit managed care companies tend to score lower on quality-of-care measures than nonprofit plans.
Finding out how managed care companies have performed in other states is not as easy as it may sound, Dunkelberg said.
“There really isn’t a reliable place to get a sense of how a company performs,” she said. “State agencies and advocacy groups have a tendency to rely on Google clips when it comes to finding out whether 'State Contractor X’ has been sued or fined. That’s probably not the best way for any of us to get our information, and I don’t think it helps a state be as prudent a purchaser as it should be.
Christopher Flavelle is a health care policy analyst for Bloomberg Government, a commercial analyst group in Washington, D.C., and has co-authored three recent reports in a series examining Medicaid managed care in the five states with the largest populations.
“Some states have primarily for-profit managed care, some have primarily nonprofit managed care and some have a mix,” he said. “There seems to be a pattern - and my research isn't the only body of work showing this - that for-profit seems to be lower performance on health outcomes.”
He said New York alone had a system where poor performance by a managed care organization would trigger sanctions. In New York, he said, plans that fail to meet six performance criteria are put on probation. If they don’t improve, they risk losing the contract.
He said New York also helped assure better outcomes by encouraging “a large number of plans” to compete within the state.
“Some states, like Illinois, have a small number of plans (two) and if one doesn’t perform well, it leaves the state no choice. New York is the other kind of approach. If one isn’t doing well, they can remove that plan from the program.
“Connecticut is one smallish state I'm familiar with,” Flavelle said, “and they recently moved their system from risk-based (capitated or fixed-cost) managed care system with two or three plans to a self-insured program. They use insurance companies to administer the system, but it's not risk-based. I think it’s possible that other states will be looking at Connecticut to see if they can save money with that approach. Connecticut’s argument was that the companies were taking too much profit.”
Flavelle said a common rationale for states that move to more managed care is to stem the growing cost of Medicaid.
“That's a sentiment that you hear a lot of, and we took a direct look at it,” he said. “It’s like everything else in this business … you have to be careful how you look at the numbers. If you look at nominal numbers, the governors are right. But if you control for inflation and enrollment growth, the cost per resident actually isn't going up so fast … it’s actually kind of flat over the last 10 years. So it doesn’t look like cost pressure alone is driving the expansions.”
He said policy decisions for the most part were driving the growth in Medicaid managed care.
“A point I wanted to make in the first study is that I think this is a choice that isn't out of the hands of policymakers,” he said. “If you assume that costs are out of control, that leaves policymakers no choice. But that's not the case.
"It’s an active choice. Policymakers can say in the future, 'If this isn't working for us, we can try something else.'”
Though managed care has been used in state Medicaid programs increasingly during the past 20 years, Flavelle said it wasn’t clear yet whether it was reducing costs or producing healthier beneficiaries.
U.S. Sen. Chuck Grassley, R-Iowa, “has made this point that he would like to see there be more consistent data on Medicaid and Medicaid managed care,” Flavelle said. “One of the problems of tracking it is there are 50 state programs and they’re all a little bit different.
"Research is always fraught with some type of shortcomings. But even with the constraints as we try to measure this thing, I think it’s fair to ask: Shouldn’t we see some clear evidence of cost savings? I expected to find more clear evidence going into this that Medicaid managed care works. None of the five states I looked at had obvious evidence of that.
“I've seen some studies arguing for the cost savings,” he said. “But the ones I've seen have tended to be industry-funded. I wish there was more evidence.
“I think whatever happens with the Supreme Court and the health care overhaul, this Medicaid managed care push is going to keep on going. I think it’s going to be one of the most important health issues of the next 10 years.”
Georgia officials, like their Kansas counterparts, are considering a redesign of that state’s Medicaid managed care system with an eye toward expanding it to include more enrollees, namely the elderly and disabled who depend on long-term services.
Currently, like Kansas, Georgia Medicaid has managed care for low-income children and pregnant women. A consultant’s report released in January encouraged the state to expand managed care, and state officials plan to seek contracts in the fall with roll-out of the expansion scheduled for early 2014.
Cindy Zeldin is executive director of the consumer advocacy group Georgians for a Healthy Future. She said the state’s experience with managed care to date has been “somewhat mixed,” noting that some gaps in the state’s health care delivery system have not been filled.
Much of the discussion by public officials had focused on how to squeeze more money out of the system, she said.
“A lot of groups that work with vulnerable populations have a lot of concerns about the way things have worked with managed care,” she said. “But there’s also a recognition that, across the nation, this is the direction that things are headed. So the focus has become, ‘OK, if this is the way we’re heading, how do we make it work as best we can?’”
Kentucky switched to Medicaid managed care statewide late last year.
The transition “hasn’t been smooth,” said Jodi Mitchell, executive director at Kentucky Voices for Health, a consumer advocacy group.
“The more time you take (to implement it), the better,” she said. “Either you take the time to learn from what’s gone on in other states or you’re going to have a lot of confusion.”
Mitchell said consumer and health advocates in Kentucky have struggled to make the system more responsive to people’s needs.
“We tried to put forward legislation that would hold the MCOs to the same patient protections that are in private insurance plans – things like mental health parity, prompt payment, network adequacy,” she said. “The MCOs came out and said it would add costs, and that the contracts would have to be opened up for review. The Legislature wasn’t willing to do that.”
In Indiana, David Roos, executive director at Covering Kids and Families of Indiana, said the state’s managed care companies have “had their ups and downs” in running the state’s Medicaid programs for children, pregnant women and indigent adults.
Early on, the state had contracts with five managed care companies. Today, Roos said, it contracts with three, and lawmakers have “made it clear they’re willing to live with two.”
One of the companies, Centene, has bid on the KanCare contract.
“It’s a huge company,” Roos said of Centene, noting that, generally speaking, it has been responsive to advocates’ concerns. “Let’s put it this way: Nobody’s a novice.”
Still, he said, managed care has proven to be a “tough market” that has caused some “very good people (in the industry) to get burned out.”
→ House GOP leaders pen letter backing DD supports in KanCare (5/17/13)
→ More than 1,000 rally at Statehouse for DD carve-out (5/8/13)
→ Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
→ As KanCare continuity of care period ends, problems persist; legislators starting to hear about it (4/8/13)
→ Advocates raise concerns over possible reductions in KanCare services (3/28/13)
→ Conferees agree on KanCare oversight committee (3/28/13)
→ DD advocates push to extend KanCare "carve-out" (3/20/13)
→ Safety-net clinics struggling with KanCare (3/4/13)
→ Major medical provider groups ask for longer KanCare transition (2/13/13)
→ Lawmakers and providers assess KanCare transition (1/28/13)
→ Five-part series: "Lower cost and better care: Can KanCare deliver?" (1/14/13)
→ Independence of KanCare ombudsman questioned (1/7/13)
→ KanCare special terms and conditions spelled out by CMS in a document (12/28/12)
→ KanCare workforce shift hampering local agencies (12/10/12)
→ Governor announces KanCare approval by feds (12/7/12)
→ More KanCare implementation details outlined (12/3/12)
→ Federal officials say they hope to act soon on KanCare waiver request (11/28/12)
→ New KanCare info included on state website (11/20/12)
→ Groups call for KanCare delay (11/8/12)
→ Go/no-go date looms this week for KanCare (10/15/12)
→ KanCare benefit packages outlined (9/26/12)
→ Provider groups nervous about lack of KanCare details (9/13/12)
→ KanCare Confidential (9/10/12)
→ KanCare contracts awarded (6/27/12)
→ KanCare plan panned again at public hearing (6/20/12)
→ Wichita KanCare forum draws more than 200 (6/19/12)
→ Medicaid makeover: Can Kansas learn from Kentucky? (6/11/12)
→ Hundreds protest inclusion of disability services in KanCare (4/25/12)
→ Counties weighing in on KanCare (4/9/12)
→ Hospital administrator to chair KanCare Advisory Council (3/29/12)
→ Brownback Medicaid makeover an “ambitious” plan (3/28/12)
→ KanCare bidders heavily courting Medicaid providers (3/19/12)
→ Legislators push to delay KanCare start (3/7/12)
→ Brownback announces managed care for all in Medicaid (11/8/11)
→ Kansas Medicaid makeover in the works (3/7/11)
→ Full Medicaid and KanCare coverage
The KHI News Service is an editorially independent initiative of the Kansas Health Institute and is committed to timely, objective and in-depth coverage of health issues and the policy making environment. Find more about the News Service at khi.org/newsservice or contact us at (785) 783-2529.