Plan To ‘Fix’ State Medicaid Program Flawed – Hartford Courant

These are lean times and we need our government to be smart about where it puts its resources. We don’t need our limited taxpayer dollars spent “fixing” things in our Medicaid program that aren’t broken.

Connecticut’s Medicaid program, which covers one in five state residents, is a major success. In a recent letter to Congressional leaders, Gov. Dannel P. Malloy listed many successes: 4.3 percent lower emergency room usage, increased provider participation, dramatically reduced administrative costs and millions in savings on medical care.

These successes followed the move in 2012 from a “risk” payment model in which managed care companies were paid a set amount per person regardless of actual medical needs, to one in which payment is made directly to providers for specific care. The governor noted that our program “maintains a lean, efficient, self-insured managed fee-for-service structure and has effectively controlled both its overall growth in expenditures as well as per member per month costs.” As other states see high annual increases, the cost per average Connecticut Medicaid enrollee has dropped 1.9 percent over four years.

Our innovative, cost-effective program relies on patient-centered medical homes, primary care practices that are paid to coordinate their patients’ care. People don’t have to figure out who to call with what problem, and someone helps them get the care they need. Under this program, providers objectively decide whether their patients need to see a specialist, receive a prescription or get a medical test — they don’t get paid more either way, so have only their patients’ best interests in mind.

Nevertheless, the state Program Management Office, funded under a temporary federal grant, seeks to change the payment model back to a risk model. The reason for doing this is rising medical costs, though this is not an issue in Medicaid. In this new risk model, if the total cost of their patients’ care is less than a pre-set amount, the contracted health systems will get half the savings. They won’t receive these payments if they don’t save money on patients. This risk model, called shared savings, is new and other states’ results are disappointing so far.

Proponents say this will encourage providers to save money by better coordinating care. But big health systems could save money by denying care or using cheaper and less effective treatments, which would be hard to detect. Individual providers would not intentionally do this, but the powerful financial incentives could induce these systems to restrict access to more appropriate but expensive care, as did the Medicaid insurers.

The Program Management Office would like all medical plans to use this risk model, but it can’t impose shared savings on private insurance, so they are instead experimenting on Medicaid, where there isn’t a cost control problem but they have influence. They have gotten the state Department of Social Services to experiment with about 137,000 Medicaid enrollees, who were moved into it in January. It will be at least a year before DSS will know whether the experiment succeeds or fails — resulting in denials of needed care, additional medical complications or even higher costs to the taxpayers, defeating its purpose.

DSS indicated a careful approach in its June 2016 plan, stating that “after Wave 1 DSS will evaluate outcomes and consider [an] additional wave of participation.” But, since then, DSS says it is committed to moving another 200,000 enrollees into this experiment next January, regardless. DSS plans to issue a request to increase the number of participating health systems in August, further committing itself to this risk model, before any analysis can be done to determine whether it works.