Featured Health Business Daily Story, May 19, 2015

Executives of Duals-Demo Plans Warn That Short-Term Objectives Won’t Be Achieved

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. Sign up for an $87 two-month trial subscription today.

By James Gutman, Managing Editor
May 7, 2015Volume 21Issue 9

Now that almost all of the CMS-backed initiatives for Medicare-Medicaid dual eligibles are up and running, it has become clear that reaching many of the ambitious goals in these programs will be nearly impossible over the short term. There have been and will continue to be improvements in integrated care for duals as a result of the demo, plan executives tell MAN, but such aspects as cost savings, good outcomes data, full integration of behavioral and medical care, and combining Medicare and Medicaid regulation will be longer in coming than many have expected.

This at least seemed to be the consensus among the 11 speakers at AIS’s April 16 virtual conference on the initial results of duals initiatives. Virtually all of the speakers praised the concept of the demos and the work of CMS’s Medicare and Medicaid Coordination Office (MMCO) in working to solve the problems, but they cited a host of complications as well.

The delays in starting the CMS-backed state demo, for instance, have been very costly for participating plans, said L.A. Care Health Plan CEO John Baackes, a speaker at the conference’s opening session. Baackes joined that plan, which participates in the Los Angeles County duals demo, March 23 after heading Medicare Advantage and duals programs at the AmeriHealth Caritas Family of Companies, which participates in duals demos that started this year in Michigan and South Carolina.

The delays are a problem, he explained at the conference, because duals plans have such “significant up-front costs” and had to amend provider contracts after they were negotiated since government payment-rate determinations were slow in coming. Moreover, states’ Medicaid staffs didn’t have enough knowledge of Medicare processes, causing delays in getting needed information to the plans.

Baackes praised the MMCO leaders for their accessibility and responsiveness to participating plans, including willingness to amend the Massachusetts contract to reduce expected savings (more such modifications are likely, observers say) and to stretch out the completion of some demos till 2018. But he said there are “fundamental flaws” in the demo, including having to meet quality targets “just to get the basic pay” for plans under the demo’s withhold provisions and the continued separate reporting for Medicare and Medicaid on both provider encounters and claims. This has caused additional burdens for the participating plans, he asserted.

Other problems in the demos so far, according to Baackes, lie in how government agencies have communicated — or not communicated — with beneficiaries and providers. He said the materials for beneficiaries, for example, have lacked “marketing pizazz,” and that has hurt enrollment results. The first time a beneficiary hears of the demo, Baackes added, often is via a mailed notice with a deadline for action, and this is one reason the demos “will wind up smaller than anybody has anticipated.”

He also said, however, that once enrollment stabilizes after the opt-out period, “retention will be high.” One way to help bring this about, he suggested, is to make sure plans know by next year whether there will be an extension of the three-year demos beyond 2018, an event he called “critical…and likely.” Baackes cautioned that it will take at least two years before there are good data by which people can judge the success of the demos.

Demo Extension Might Be Done Without Law

While MMCO declined to discuss specific timetables, Obama administration health policy makers are known to believe they have the authority to extend the demo without needing new legislation. They have pointed out that although administrative infrastructure funding had to come from CMS’s Center for Medicare and Medicaid Innovation under the Affordable Care Act, most of those big expenditures are completed, and the large costs remaining are just the capitation payments from normal Medicare and Medicaid channels.

Several of the speakers pointed to the difficulties of incorporating long-term care (LTC) into the duals demos. Martha Smith, chief duals program officer for Health Net, Inc., for instance, while noting her plan’s improvements since the beginning of the demo in its ability to “find” and contact passively enrolled duals in the California demo and get them to complete health risk assessments (HRAs), also said that it is hard to get provider encounter data for the demo.

The whole new responsibility for LTC has been “challenging” for L.A. Care, added that plan’s chief operating officer, John Wallace, and L.A. Care basically has had to develop a separate network specifically for duals residing in LTC facilities.

Behavioral health (BH) care has generated a separate set of problems in the demo so far. Molina Healthcare, Inc., which operates plans in six of the demo states, for example, has found up to half of the duals have serious BH issues, according to Tom Standring, vice president, Medicare. He said Molina’s efforts to contract with third parties to help manage these beneficiaries’ behavioral care are complicated by regulations restricting access to protected health information (PHI).

Brian Wheelan, executive vice president and chief strategy officer at behavioral health managed care specialist Beacon Health Options, which operates in eight of the duals demo states, cited the PHI issue as one reason that every plan in each of Beacon’s states is “struggling with outreach and engagement with the mentally ill.”

Although administration health policy makers have conceded that data-privacy issues are a legitimate issue they are working on, they also have pointed out that the demo member can authorize any sharing of information. They acknowledge duals may not always agree to this.

It is “unrealistic,” continued Wheelan, to expect primary care physicians to integrate care for those duals with BH conditions. It also is hard to achieve “reverse integration” and focus behavioral care in the demos around community mental health centers, which will take time “to scale” up to establish “meaningful primary care capability,” Wheelan said. Similarly, he observed, Federally Qualified Health Centers have “notable financial advantages and commitment, but complex patients are not their strength (yet). This is even more true for the” seriously mentally ill (SMI) population.

Demo Still Struggles With Engaging Duals

“The whole demo is struggling with engagement,” maintained Wheelan, who does not expect it to be extended. “Unable-to-reach” rates are running 30% to 40% overall, and are even higher with the SMI, he said, adding, “Outreach is expensive; penalties make it worse.”

Moreover, according to Wheelan, “there still is an immediate shortage of subacute services and crisis-stabilization beds” for duals with BH issues. While “we should be able to build those, that will take time,” he said. At least one duals demo plan, Commonwealth Care Alliance (CCA) in Massachusetts, already has done this itself (MAN 1/8/15, p. 3), and others have used church basements among various existing non-health care facilities for duals-beneficiary meetings with care coordinators.

The financial implications in BH are even more severe than on the medical side, said Wheelan, because opt-out rates in the SMI population tend to be “much lower” than in the overall duals population.

Lois Simon, president of CCA, pointed to another aspect of the same problem in saying that of the more than 10,000 enrollees CCA has attracted in the Massachusetts duals demo, 70% have a BH diagnosis. And many of them who are classified, and thus paid for, in plan compensation in the demo as needing a relatively low degree of care turn out to be more seriously ill, said Simon.

This contributes to another issue, she suggested. About 25% of CCA medical spending in the Massachusetts OneCare duals demo is for pharmacy, which is “off the charts” in comparison with the senior population CCA serves outside the demo, she asserted. The Massachusetts demo is only for those aged below 65.

However, there also are several areas in which the demo is working well, several of the speakers emphasized. Health Net’s Smith, for instance, noted that the satisfaction rate once beneficiaries actually begin the California program has been “very high” so far. Mari Cantwell, chief deputy director, health care programs in the California Department of Health Care Services, agreed, saying there isn’t a high level of disenrollment among demo participants who didn’t opt out initially. Even the above 50% opt-out rate in Los Angeles County now is starting to decline, added Wallace.

Both Wallace and Smith cited good progress in getting duals in the California demo to complete HRAs. Wallace said L.A. Care is “pleased” with the 70% HRA completion rate it has, although he acknowledged that “sometimes” the plan has to approach duals beneficiaries “more than once” to achieve this. Smith said Health Net “struggled” at the outset of the demo in getting HRAs completed because of incorrect contact information for many of the beneficiaries, but it now is using such resources as pharmacy data and information related to duals’ use of long-term services and supports (LTSS) to find the members. Once Health Net finds them, she added, their completion rates for the HRA are good.

More than 150,000 HRAs already have been completed for the duals demo nationwide.

© 2015 by Atlantic Information Services, Inc. All Rights Reserved.

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