Lawmaker Says It’s Too Late For Medicaid Savings
by Christine Stuart | Sep 7, 2010 10:53pm
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Posted to: Health Care, State Capitol
The $76 million the legislature and Republican Gov. M. Jodi Rell anticipated getting this year by changing the way the state’s Husky insurance program is run won’t be happening, Sen. Toni Harp admitted Tuesday.
She said if the state was going to get the $76 million it thought it was going to get by transitioning the Medicaid population from one model of managed care to another then it needed to start saving July 1, the beginning of the fiscal year.
“I just don’t see that happening,” Harp said Tuesday after an hour long meeting with the executive board of the Medicaid Managed Care Council.
Harp, who co-chairs the legislature‘s Appropriations Committee, said she remains optimistic that doing a few small things, such as limiting the administrative costs that managed care organizations receive, creating a minimum medical-loss ratio, and limiting corporate allocations, could help save the state some money without completely overhauling the underlying program.
The legislature and governor anticipated the $76 million in this year’s budget, which is already running a deficit of nearly $63 million. The uncertainty of which Medicaid model the state will use is contributing to the problem. Already the Office of Policy and Management predicted that the Department of Social Services would have about $144 million in cost overruns by the end of the fiscal year.
“Revenues are coming in a little ahead this year, so it may not be as big of a problem,” Harp said.
Making matters even more difficult is the knowledge that the Rell administration will be gone by January and the state will be dealing with direction from a new administration with a new set of goals and objectives.
“We get a new governor and now there may not be a whole lot of interest in moving forward on any of this if it involves a new policy,“ Harp said Tuesday.
“I’d be shocked if we could come to any conclusion before we have a new governor,“ Shelia Amdur, a member of the Medicaid Managed Care Council, said.
At its Aug. 13 meeting, Mark Schaefer the Medicaid Managed Care Council was presented with three models of changing how Husky and Charter Oak Health Insurance program is run under the state’s Medicaid program.
But choosing one of the three models presented by Dr. Mark Schaefer, the department’s director of medical care administration, proved difficult for the executive board, which collectively felt it didn’t have enough data to make an informed decision.
Advocates like Ellen Andrews, executive director of the CT Health Policy Project, argues that the existing model overpays the three managed care organizations and encourages them to deny care to the nearly 400,000 Husky and 12,000 Charter Oak patients.
Schaefer and DSS officials are concerned new alternative delivery models touted by Andrews and other advocates that pay doctors instead of insurance companies are too new and “experimental.” DSS officials expressed concern that creating a single entity to oversee the medical claims gives the three managed care companies no financial incentive to contain costs or provide effective care.
Schaefer said the federal Centers for Medicare and Medicaid Services prefers sticking with a “capitation” system where managed care organizations pay doctors a certain amount of money per patient, per month.
Under a capitation system if a doctor has more expenses than payments it receives from the managed care organization then it’s treating patients at a loss. Advocates argue this gives doctors an incentive not to treat, whereas a fee-for-service or alternative Primary Care Case Management system would give doctors an incentive to both treat and manage care.
Schaefer said he didn’t think it was the legislature’s intent to transition to Primary Care Case Management, but to focus on the closest thing to the current existing model which operates as a managed care capitation system.
Officials from the Centers for Medicare and Medicaid Services, who joined the executive board meeting Tuesday by telephone, said it wasn’t their intent to steer the state toward managed care. They said that’s what they thought state officials wanted.
Rep. Toni Walker, D-New Haven, said she was surprised and delighted to hear federal officials say that. She said the state has to give PCCM an opportunity to thrive.
“I’m not sure managed care is the best model,” Walker said. She said PCCM should be given an opportunity to be successful.
So far alternative Medicaid delivery models been a tough sell.
posted by: Sheldon Toubman | September 10, 2010 12:50pm
DSS refers to primary care case management (PCCM) as “experimental.” But it is a model now in operation in about 30 states and which has been successfully running in many of them for years, e.g., it has consistently been saving Oklahoma’s taxpayers lots of money, while improving the quality of care for its Medicaid enrollees, since 2004. See also http://www.cthealthpolicy.org/policy/yalepaper.htm (reviewing 22 states’ PCCM programs already in effect in 2000). DSS’s unwillingness to pursue statewide PCCM, which can operate with a non-risk Administratve Services Organization(s) as called for by the legislature, to the benefit of both CT’s taxpayers and Medicaid enrollees, as well as their providers, is troubling.