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Things are good in Connecticut’s Medicaid program now, but it wasn’t always this way.
Five years ago, Medicaid stopped using insurance companies that weren’t held accountable for providing care and the state is now saving hundreds of millions of dollars.
Emergency Room visits are down, more providers participate, and quality is up, but sadly, state officials have forgotten how bad Connecticut Medicaid used to be and are moving backward to a very similar payment scheme.
In January, the state moved 137,000 Medicaid enrollees into a shared savings program, spending over $3 million in scarce taxpayer dollars on grants to large health systems.
Under shared savings, if big health systems are able to lower the cost of their enrollees’ care, they get to keep half the savings. They generate those savings by reducing duplicate or unnecessary care and keeping people healthy. But they can also save by denying necessary care, as the insurance companies did in the old, failed scheme. Shared savings programs in other states have been disappointing.
Despite this, Connecticut Medicaid intends to expand share savings to another 200,000 people next January without any meaningful evaluation on the first wave. We won’t know whether people are being denied necessary care or if the state is paying more under the experiment. All new programs, especially risky experiments like this, need robust evaluation from the beginning. But the state’s evaluation plans are weak and will be too late to be useful.
Let’s fast-forward to 2020 when, as planned, all Medicaid members are under shared savings.
Much of our hard won progress will be erased. Connecticut Medicaid will no longer be a national model of improvement, but a cautionary tale.
Before 2012, people were routinely denied needed care. People who got home health hours or effective medications are told they are no longer approved. In fact, they never even hear about many effective treatment options because the health system needs to maximize shared savings. Care coordinators who were funded by the one-time state grants are now gone, as is the very successful state Intensive Care Management program. Quality and patient care have stopped improving and are trending down. As in the past, people with complex conditions are bearing the brunt of the downslide. But there is no one to hold accountable, as these large health systems are not regulated.
Strangely, the large health systems are getting sizeable shared savings payments, while overall Medicaid costs are going up. This is because, as is now happening in other states, large health systems can easily drop people with complex conditions who rack up high bills while attracting people who are easier to treat. This generates false “savings” payments from the state without doing anything to manage care or prevent illness.
Medicaid spending has again, as before, become a budget buster, growing at an unsustainable rate. But unlike years ago, Connecticut doesn’t have surplus funds to throw at the problem, so difficult decisions are being made. Possibilities include cuts to Medicaid enrollment, nursing homes and long term services and supports (that is where most spending is). Benefits are cut and payment rates are slashed so providers are once again fleeing the program. People are forced to turn to emergency rooms for problems that could have been prevented. There is sharp growth in demand at state agencies and safety net providers for services that aren’t being provided by the health systems but because of state budget cuts they can’t meet the need. Unfortunately, state officials remain blindly committed to the program, failing to check the data or spending.
The good news is that this scenario can be avoided. Before it is too late, the state must evaluate the program, and hold off expanding until they know if people are being harmed or if taxpayers are being fleeced. The capacity and the data exist at the state, but state officials refuse to use it. We must watch the money like hawks and be sure the upfront grants are being used to improve care. The state needs to regulate large health systems that take on financial risk — for all of us, not just Medicaid members.
Ellen Andrews is the executive director of the CT Health Policy Project.
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