Managed care project serves as a test run for Medicaid expansion

A California program faced challenges trying to find enough doctors who were prepared to take on high-needs patients, including seniors and people with disabilities.

By — Posted July 5, 2013

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California’s attempt to switch thousands of people with complex care needs to Medicaid managed care plans underscored the difficulties in recruiting enough trained doctors to take care of these patients, a new Kaiser Family Foundation report concluded.

The findings provide a cautionary tale for states planning to cover additional high-needs beneficiaries by expanding Medicaid starting in 2014.

Medicaid enrollment in comprehensive, risk-based managed care plans has risen steadily over the past decade, from 17.3 million in 2003 to more than 29 million in 2011, Julia Paradise, associate director of the Kaiser Commission on Medicaid and the Uninsured, said during a June 25 briefing in Washington. States have been expanding their use of Medicaid managed care through various actions, such as added mandatory enrollment or quality initiatives. As of 2011, more than half of all Medicaid beneficiaries in 26 states were enrolled in such plans.

The Medicaid expansion, as well as payment and delivery reforms, signal a larger role for managed care to serve high-needs populations, such as seniors and people with disabilities, Paradise said. Any state that expands Medicaid up to an effective rate of 138% of poverty receives 100% federal assistance for the first three years, taking on up to 10% of the expansion costs thereafter. For the millions of adults gaining Medicaid coverage under the Affordable Care Act, states are expected to rely heavily on managed care organizations to serve them, she said.

California’s Medicaid managed care initiative provided a test case of sorts to identify the challenges and lessons learned in orchestrating this type of expansion, said Carrie L. Graham PhD, a speaker at the Kaiser briefing. She’s the assistant director of research at the Health Research for Action Center at the University of California Berkeley School of Public Health. Graham co-wrote an issue brief on the results, which was published by the Kaiser commission (link).

A federal waiver allowed the state over a year’s period to switch nearly 240,000 seniors and people with disabilities from fee-for-service MediCal to managed care plans, with the intent of improving access, stabilizing costs and increasing accountability among health care professionals and plans.

A goal for health plans was to expand their networks, but many found it challenging to recruit primary care and specialty physicians with experience in complex care. Graham said fee-for-service Medi-Cal physicians showed a reluctance to join managed care plans. It was unclear whether payment rates or the oversight of these plans were the reason, she said.

Disrupted treatment reported

Moving high-needs patients into managed care plans has its problems, observed Mark Dressner, MD, president of the California Academy of Family Physicians. Speaking from personal experience and as a member of CAFP’s Medi-Cal Task Force, Dr. Dressner said patients in these situations may be transferred to doctors who are not always equipped to take care of them. Another issue is “the multiple medications that patients have been taking after years of fine-tuning may no longer be covered, resulting in lapse of coverage,” he said.

Disruptions in care affected both patients and physicians during the Medi-Cal transition, the Kaiser issue brief noted. Some of the participating clinics said their primary care practitioners weren’t used to treating such complex patients, reporting cases in which doctors were referring patients to emergency departments to receive care.

“Many beneficiaries were required to change doctors, prescriptions, pharmacies and laboratories,” the report stated. Health care professionals said their staff had to work additional uncompensated hours to handle processes such as appeals of coverage denials and authorizations for these high-needs patients.

They weren’t always compensated for this work. The issue brief cited an instance in which a cancer center continued to provide services without receiving pay when patients undergoing treatment were switched to nonaffiliated plans as part of the transition to managed care.

Graham pointed to a number of strategies that could prepare physicians and plans better for such a transition, such as ensuring the early transfer of fee-for-service utilization data from beneficiaries and developing partnerships across health care entities that serve high-needs patients. The American Medical Association as part of its policy on Medicaid managed care has advocated for a gradual implementation of such plans “to ensure availability of an adequate, sufficiently capitalized managed care infrastructure and an orderly transition for beneficiaries and providers.”

Managed care plans always should be vetted for adequate networks of trained primary care physicians and specialists before patients are transferred to such plans, Dr. Dressner said. There also should be “effortless approval of the patient’s medications, and a care coordinator in place who can rapidly step in” to help navigate a patient’s care, he said.

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