Medical homes get boost in Louisiana Medicaid reform effort

Washington -- Physician organizations and Louisiana Gov. Bobby Jindal agree that a medical-home model could help Medicaid provide better value to patients with low incomes or disabilities. But they disagree on whether managed care organizations should be the ones overseeing those homes.

On Nov. 14, Jindal released a concept paper for Louisiana Health First, his proposal to transform the state's Medicaid program from a disjointed fee-for-service system largely dependent on hospital charity care to a program in which enrollees have their care coordinated by a primary care physician. The proposal also would expand Medicaid to cover approximately 85,000 additional children, parents and caregivers and calls for the construction of a new academic medical center in New Orleans.

The Louisiana Chapter of the American Academy of Pediatrics opposes an option in the plan to allow private, for-profit managed care organizations to run the Coordinated Care Networks that would contract with physicians to provide medical homes. Managed care organizations have no track record using the medical-home model for Medicaid enrollees, said Steven B. Spedale, MD, chair of the chapter's Medicaid policy committee.

"We have great concerns ... because we think the care for the children is going to be sacrificed" to satisfy profit margins, he said. About 700,000 of the state's 1.1 million Medicaid enrollees are children, said the state Dept. of Health and Hospitals.

The chapter also is concerned that managed care organizations could try to squeeze savings from Medicaid by limiting physician pay, Dr. Spedale said. Medicaid fees in Louisiana are between 90% and 120% of Medicare rates, he said.

Now that more details of the governor's plan have been released, the Louisiana State Medical Society isn't as skeptical as it once was, said President Roger D. Smith, MD. The society shares the goals of improving continuity of care, increasing access to care and keeping Medicaid program costs manageable. Still, the LSMS would prefer that nonprofit entities run the Coordinated Care Networks.

The Louisiana Academy of Family Physicians supports the plan's principles but suggested that the state should define in more detail the concept of a patient-centered medical home, said James Campbell, MD, the academy's president. The state also should bolster the primary care physician work force by recruiting more family physicians, he said.

Health plans respond

Gil Dupré, CEO of the Louisiana Assn. of Health Plans, which represents 12 of the largest plans in the state, said physicians shouldn't worry about Medicaid pay under managed care. "Nobody's going to be asked to agree to rates that they don't think are adequate," he said.

Plans have a track record for appropriately managing care for people with private insurance, especially those who have chronic illnesses, which saves money and improves quality, Dupré said.

He said the state's program can't afford to continue as it stands. "What we've been doing in Louisiana is not working. It's very expensive and it's producing some of the worst health outcomes in any state."

Louisiana was 20th in overall Medicaid spending in 2006, Jindal's office said, and fourth for federal payments to hospitals caring for an above-average number of poor or uninsured patients in fiscal 2008, said the Health and Human Services Dept. But the state was 48th on the performance of its child health system, said a May report from the Commonwealth Fund.

Time is tight

Louisiana Health First requires federal approval of a Medicaid waiver, but the state Legislature will need to approve the proposed waiver before it is submitted to HHS. Any waiver would become entangled in unresolved federal funding issues. HHS contends that the state improperly spent $771 million in Medicaid funding in the last decade, which the state disputes.

The state also is seeking $492 million in assistance from the Federal Emergency Management Agency because of hurricane damage to Charity Hospital in New Orleans. The money would help build an academic medical center in the city. Federal rules require FEMA to pay the replacement cost of a facility more than 50% damaged by a natural disaster, but the agency argues that it is not responsible for the full amount because of state neglect before the hurricane.

Jindal hopes to ask the Bush administration to approve the waiver before the president leaves office, but the governor doesn't have a deadline for submitting the waiver to HHS, said Tony Keck, MPH, chief of staff for Louisiana Dept. of Health and Hospitals Secretary Alan Levine.

Dr. Spedale said Medicaid reform of this magnitude should not be rushed. Jindal and Levine should seek consensus among doctors and others who care for Medicaid enrollees before pursuing a federal waiver, Dr. Spedale said. Instead, the Jindal administration asked federal officials what types of reforms they might approve and started pursuing one of those approaches, he said.

But a physician panel has been meeting weekly to provide guidance on Medicaid reform to Levine and his staff, said Sybil Richard, deputy secretary for the Dept. of Health and Hospitals. "This is far from over and far from a completed design."