In my previous blog post, I provided a brief history of Medicaid in Iowa, including sharing details on it’s current modernization and challenges. In this post, we’ll cover what’s next for Medicaid members with the move to managed care organizations (“MCOs”).
Will members have better access to care?
In the short term, access to care will be disrupted by under-developed systems and provider networks. Consumers, for example, have reported that MCOs have misidentified providers, failed to identify guardians (i.e. healthcare decision makers), and failed to timely provide for transportation to appointments.[i] Providers have reported that MCOs still have not agreed to contract terms with them, are making errors in identifying the MCO’s own members, and have failed to timely authorize services and not made timely payments for authorized services.
While some of these “growing pains” will resolve over time, we can expect that other issues, such as provider reimbursement issues, will remain.[ii] In the long term, a transition to managed care has generally been found to increase utilization of primary care, while reducing utilization of inpatient stays and emergency rooms.[iii]
The Iowa Department of Human Services will be collecting information on inpatient stays / emergency visits as well as other information related to access from the MCOs and other sources, and we can expect reports on those topics from the agency in December 2016 and annually thereafter. [iv] If national trends hold, Iowa may see some modest shifts in utilization away from certain higher-cost care settings and some mixed, anecdotal evidence on other access issues (e.g. scheduling challenges with specialists).
Will members receive better care?
While there are case studies of successful care management initiatives (e.g. targeting persons discharged from hospital to nursing home), system-wide studies have reported little evidence of broader improvements on quality within Medicaid managed care. [v] We can expect that the MCOs in Iowa will continue to initiate quality initiatives, (e.g. performance bonuses to providers). How such initiatives, and MCO plan design generally, impact quality is the unanswered question.
The Iowa Department of Human Services will be collecting a significant amount of information on performance measures (e.g. breast cancer screenings) and we can expect such data will be evaluated in the near future. If Iowa’s experience is similar to that of other states that have recently transitioned to comprehensive Medicaid managed care, the early results may be mixed as to certain performance measures and (unfortunately) largely inconclusive overall.
Will Iowa save money?
The Iowa Governor’s Office budgeted over $100 million in savings for fiscal year 2017 on account of the transition to managed care.[vi] Case studies around the country have shown mixed and “lower-than-expected” savings on the state level.[vii] Is there hope for Iowa?
An often-cited observation is that states with more generous Medicaid reimbursement rates have seen some savings with a transition to managed care (because payments are subsequently reduced)[viii] and by some measures, Iowa has had relatively low rates for some services.[ix] A case study of an early managed care program in Iowa, however, showed modest savings.[x] Contracting with MCOs may increase the state’s administrative costs.[xi]
Connecticut, in a notable example, recently ended its contracts with MCOs, determining that the administrative costs with managed care outweighed any quality improvements.[xii] With early reports on expenditures, we can expect to hear claims to certain savings and revised budget forecasts. As for firmer evidence on overall savings or losses, we should expect that to be years down the road.
Measured against its own goals, the transition to comprehensive Medicaid managed care in Iowa will have the jury out for some time. In the meantime, there will be many issues for lawyers and others to address, including access to services from out-of-state providers, denied payments to providers and the market pressure for providers to consolidate or diversify for purposes of improving care coordination. If change truly begets more change, we should expect these issues and others will keep us interested and engaged in “Medicaid Modernization” for some time.
[iv] The Iowa Department of Human Services Appropriations Bill, HF 2460, includes numerous provisions on Medicaid Managed Care Oversight, such as data collection and reporting by the agency. As of the date of this article, the bill had been sent to the Governor but not yet signed into law.
[v] Sparer et al., Medicaid Managed Care: Costs, Access, and Quality of Care, at 19.
[vii] Sparer et al., Medicaid Managed Care: Costs, Access, and Quality of Care, at 11-12.
[viii] Duggan M et al., Has the Shift to Managed Care Reduced Medicaid Expenditures? Evidence from state and local-level mandates, National Bureau of Economic Research, 2011.
[ix] See, e.g., Kaiser Family Foundation, “Medicaid-to-Medicare Fee Index,” http://kff.org/medicaid/state-indicator/medicaid-to-medicare-fee-index/; Nasseh, K at el., A Ten-Year, State-by-State, Analysis of
Medicaid Fee-for-Service Reimbursement Rates for Dental Care Services, Health Policy Institute, Oct. 2014, found at http://www.aapd.org/assets/1/7/PolicyCenter-TenYearAnalysisOct2014.pdf; Eljay LLC, A Report on Shortfalls in Medicaid Funding for Nursing Center Care, Dec. 2012, found at https://www.ahcancal.org/research_data/funding/Documents/2012%20Report%20on%20Shortfalls%20in%20Medicaid%20Funding%20for%20Nursing%20Home%20Care.pdf.
[x] A study determined that the transition to a primary care case management (PCCM) program in Iowa resulted in a 3.8% reduction in expenses, from 1989 to 1997. Momany, E et al., A Cost Analysis of the Iowa Medicaid Primary Care Case Management Program, Health Serv. Res. (Aug 2006).
[xi] Sparer et al., Medicaid Managed Care: Costs, Access, and Quality of Care, at 12.