Credit: Darrow Montgomery

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The District’s health insurance program for low-income and disabled people will be fully managed by private companies beginning in October 2020. The rollout will take roughly five years.

It’s a massive change. 

The individuals that rely on this insurance are among D.C.’s most vulnerable: They have a disability, behavioral health diagnosis, or chronic illness like HIV. Some patient advocates are wary if private insurance companies should coordinate their care and services in exchange for a set fee per month, as the evidence is thin on whether these contractors can effectively do so. 

A majority of D.C.’s Medicaid recipients already have their health care administered by private insurers. Of the nearly 258,000 total patients enrolled in Medicaid, 76 percent are enrolled in a managed care organization or MCO. But that still leaves 61,900 patients still enrolled in traditional Medicaid, also called “fee-for-service,” where providers contract directly with the government and are reimbursed for all provided services. 

Historically, states have been reluctant to move frail and elderly people into managed care plans because of their complex needs. That hesitancy is fading as officials try to contain Medicaid’s ballooning costs. In D.C., fee-for-service patients make up roughly 24 percent of the total Medicaid population, but are responsible for 61 percent of Medicaid costs.

“One of the things that we have noticed in the data is the high level of inappropriate utilization use of the emergency room as a primary care doc[tor],” says Deputy Mayor for Health and Human Services Wayne Turnage. “We have been, for some years, talking about moving the fee-for-service population under the umbrella of managed care to give them access to the same kinds of care coordination that other members in the program have access to.”

Overall, the financial performance of Medicaid managed care is mixed. Moreover, experiences elsewhere have D.C. patient advocates concerned about interruptions of care, particularly during the transition period. In Kansas, research suggests Medicaid patients with mental illness faced significant barriers to care after the state moved to a managed care program. In Iowa, patients with disabilities sued the governor because they alleged their private plans refused to pay for life-saving services. One patient even died, and his wife faults Iowa for moving him into a for-profit plan

“Transitions from fee-for-service to managed care are often difficult because of existing relationships that patients have where the MCO may not have that provider or specialty group or hospital in their network,” says Erin Loubier, senior director for health and legal integration and payment innovation at Whitman-Walker Health.

While Loubier is not against managed care, she is worried about the community health center’s fee-for-service patients that require highly specialized care. Fee-for-service allows patients to move throughout the health care system so long as the provider accepts Medicaid as payment, so patients can see any provider without referrals. Broadly speaking, managed care plans have provider networks.   

“People with disabilities often have complex medical needs and may be seeing multiple providers or specialists,” says Loubier. “The possibility that their important list of providers is not all in-network with the MCO is very real and very possible.” 

That was D.C. resident Jamie Davis Smith’s experience with managed care. Her daughter Claire, who has a genetic syndrome, is enrolled in Health Services for Children with Special Needs Health Care System (HSC), one of four MCOs in the District. HSC recently subcontracted dental care to Guardian, so Claire’s dentist stopped accepting Medicaid as payment. 

“The dentist was a great fit for Claire, [understanding] her developmental delays,” she says. “We are either paying significant out-of-pocket costs or finding a new dentist … we might face going to a dentist who can’t handle Claire’s needs. That’s concerning.” 

Another issue was getting HSC to pay extra hours for Claire’s nurse, which she had a doctor’s order for. Davis Smith asked for an extra hour and a half per day because she can’t provide the one-on-one time Claire needs while caring for three younger kids. But HSC would only agree to no nurse at all and extra time with a personal care attendant, who isn’t authorized to administer Claire’s medication for epileptic seizures or asthma. 

“They wanted to arbitrarily cap hours of home care she receives, not based on her needs but costs,” says Davis Smith, who is an advocate with Little Lobbyists. “Overall, I do think HSC is a good plan because it is geared specifically for kids with disabilities and offers benefits like diapers and respite care typically not available through other plans, but overall I think managed care is problematic.” 

Turnage anticipates challenges during the transition. City officials are still thinking through the transition process, but he says elderly and disabled patients who need long-term services and support, like nursing facilities or home health aids, will be the last group within the fee-for-service population to be moved into managed care. He also says it’s undecided whether kids with disabilities, whose parents opted out of HSC, will move into managed care; that group includes about 3,000 fee-for-service patients. 

“This is not something—with the long term care population—that we’re doing overnight,” says Turnage. “That is probably the most complicated of all and that’s why we have established a roll [out] of this to four or five years out. That gives us ample time to meet with all of the stakeholders and talk about some of the challenges and how we plan to overcome them.” 

Melissa Byrd, Medicaid director within the D.C. Department of Health Care Finance, also says some elderly and disabled patients are moving into the managed-care program next year under a new initiative called the Program of All-Inclusive Care for the Elderly, or PACE. “We’ll have experience in the District and be able to learn from those things between now and the next five years,” she says. 

The press release from mid-September announcing the switch to a fully managed Medicaid program states that the Department of Health Care Finance “will implement universal contracting for critical providers.” Turnage says the new managed care program will include universal contracting with hospitals. 

“So regardless of which plan you end up with, you’ll have access to that same hospital with respect to specialty-care physicians. So there will be no interruption in your plans,” says Turnage.

Patient advocates say private plans need to cover more than hospitals to ensure no interruptions in care.   

“Hospitals are, no doubt, among the District’s critical providers,” says Mark LeVota, executive director at the District of Columbia Behavioral Health Association. “We also want to see DHCF implement universal contracting for appropriately identified types of organizations that deliver community-based services as critical providers to ensure people have access to an entire continuum of care that allows them to live healthy lives with the highest degree of independence.”

Loubier echoed LeVota, saying “individual specialists are also critical to continuity of care and may not fall under the hospital contracts.” 

A District employee who asked not to be named for fear of retribution pointed to a recent DHCF report analyzing MCOs as reason to be skeptical. “When comparing FY 2017 results to the FY 2016 baseline, [Trusted HP] was the only MCO to meet all minimum standards on the [pay-for-performance] measures and receive full recoupment of the capitation withhold,” the 2018 report reads. (A withhold arrangement, a success measurement, is a payment mechanism where a portion of a rate is withheld from a MCO until the company satisfies the targets specified in the contract.)

“Given MCOs’ recent track record of failing to deliver positive health outcomes for beneficiaries and MCOs’ financial issues because of a failure to contract with key District providers, it’s tough to see what inspired the District to rely on MCOs more,” they say. “I don’t know any reason why D.C. should expect positive results from this change—the only thing guaranteed is more revenue for MCOs.”  

Others in the D.C. health community are ready to applaud the decision to fully move into managed care.

“We just can’t do things the way we’ve been doing year upon year,” says Mary’s Center Chief Medical Officer Tollie Elliott. “Any time you have a change, there are always going to be growing pains associated with it … ultimately, a coordinated effort is going to drive down costs.” 

He says Mary’s Center has had positive experiences working with MCOs. For example, the community health center piloted a telemedicine program with AmeriHealth and Trusted that allowed patients to virtually access primary care. Since 2017, Mary’s Center saw roughly 3,000 home health visits.  

“I cannot emphasize enough how much a collaborative process worked on behalf of patients,” Elliott says.

Medicaid is still a ways off from being essentially privatized. The September announcement was intended to let companies know that D.C. is re-procuring managed care contracts next year. Two companies that already participate in the existing program, Amerigroup and AmeriHealth, cheered the city’s decision to move fee-for-service patients into the managed care program.  

“We have a full range of vendors and community-based organizations … of all the populations, these people who are more vulnerable are ones that could certainly leverage and utilize these programs,” says AmeriHealth Caritas DC Market President Karen Dale. She referenced the company’s collaboration with DC Greens and Food & Friends.

AmeriHealth already sees a disproportionate share of high-cost beneficiaries, which a recent report says is indicative of adverse selection and drives up costs. Even so, Dale says she isn’t worried about covering the fee-for-service population, which requires even more specialized, costly care.    

“The expectation in evaluating each of the bidders is that they cannot be selected if they do not have the comprehensive networks,” says Dale. “If each of the three MCOs that are selected are required to have the same network of specialists and hospitals then there should be no reason for a member to only go to AmeriHealth because AmeriHealth is the only one that has a fully comprehensive network.” 

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