KHI News Service

Study raises doubts about savings from Medicaid managed care

Kansas Medicaid planners should proceed with caution, according to report's co-author

By Dave Ranney | April 06, 2011

This summer or fall, a study group led by Lt. Gov. Jeff Colyer is expected to roll out a plan for cutting between $200 million to $400 million from the Kansas Medicaid budget.


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The plan, which is still being developed by officials from the state's various Medicaid agencies under Colyer's guidance, is likely to call for moving more of the state’s Medicaid beneficiaries – disabled adults and the frail elderly, especially - into managed care programs.

Kansas Department of Social and Rehabilitation Services Secretary Rob Siedlecki has raised the possibility of launching managed-care pilot projects similar to one in Florida.

Siedlecki, a former chief of staff at the Florida Department of Health, is a member of the Colyer-led study group.

The Florida initiative, now in its fifth year, replaced its traditional Medicaid program in Duval and Broward counties – Jacksonville and Fort Lauderdale, respectively – with a managed care model.

Last week, the Florida House voted to expand the project statewide amid predictions of reducing fraud and abuse, increasing efficiency and controlling costs.

The proposed overhaul would take five years to implement.

But an analysis of the Florida pilot programs released Tuesday by the Health Policy Institute at Georgetown University raised serious doubts about the project’s success. According to the report's authors:

• “There is no clear evidence that the managed care pilot programs are saving money, and if they are whether it is through efficiencies or at the expense of needed care.”

• “Little data is available to assess whether access to care has improved or worsened under the pilot program.”

• “Given that there is significant pressure on the Medicaid budget, and that there is no increase in per-person spending

on average in Florida’s Medicaid program, concern arises about additional downward pressure on the benefits package…”

• “Market instability and plan turnover have resulted in significant changes in beneficiary plan assignments over the past three years, which is likely to have caused disruptions in care for children, people with disabilities and other vulnerable populations.”

Whether Kansas actually follows Florida’s lead remains to be seen.

But Joan Alker, a co-author of the report, urged caution for those who might emulate what happened in Florida.

“It’s important to look very carefully at the impact of the changes particularly on the most vulnerable of your beneficiaries – those with disabilities or chronic conditions,” Alker told KHI News Service.

Those also are the populations, she said, that tend to drive Medicaid costs.

“Everybody wants to see better care management for these beneficiaries,” she said. “But if this is a budget-driven exercise as opposed to a quality-driven exercise, I worry that the savings will come at the expense of needed care.”

Anne Nelson runs the Project Access, a Wichita-based nonprofit program that coordinates care for the uninsured. She was closely involved with a Medicaid managed care pilot program done in Wichita in 2006 and 2007. She said she hoped Kansas officials would heed Alker’s advice.

“If we were to go to some type of statewide, managed-care type system, some very clear measures of outcomes should be built into the contracts,” Nelson said. “Otherwise, if it’s just about capitating rates, I would be concerned that health-care decisions would be more about money than making people healthier. This ought to be about care management rather than managed care.”

The Health Policy Institute study noted that while the Florida initiative had been successful in lowering the number of missed doctors’ visits, it had not caused patients to quit smoking, lose weight, or better manage their diabetes.

In March 2010, the Kansas Health Policy Authority released a 43-page report on Medicaid-savings options, noting that enacting policies that prevent or discourage smoking and obesity and the chronic illnesses that go with them would produce the most “powerful” savings.

But those savings, the report also noted, could take years to materialize. Quicker savings would be achieved by introducing managed care into services provided to the disabled and elderly. These two groups account for 29 percent of the state’s Medicaid beneficiaries but almost 70 percent of the program’s costs, according to the report.

Children and pregnant women account for about 20 percent of the state’s Medicaid budget.

Since 2000, Medicaid spending in Kansas has nearly doubled from $1.25 billion to $2.5 billion. The number of people served has grown by about 33 percent.

In Florida, Medicaid spending has increased 37 percent since 2007, going from $14.8 billion to $20.3 billion.