Dual eligible payment reform update

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Advocates have raised concerns about DSS’ plans to re-engineer CT’s Medicaid pilot program for dual eligibles, people eligible for both Medicare and Medicaid. Last year HHS granted CT $1 million to plan this initiative. DSS intends to assign consumers to “health neighborhoods” – contractual networks of providers to cover the care continuum that will coordinate care, prevent problems and help patients manage their own health. Providers in the neighborhood may include hospitals, home health agencies, primary care and specialty providers, nursing homes, behavioral health providers, hospice, and pharmacists. Patients can access care outside the neighborhood. While DSS has abandoned plans to create ACO-like, risk-bearing entities, they intend to share savings with the neighborhood. Under shared savings, DSS will determine what each neighborhood’s patients would have cost the state without the extra services; we have no details on how they will make that determination. If patients in a neighborhood’s panel cost less than expected, DSS intends to share some portion of those savings with the neighborhood, as long as they meet certain quality standards (that have yet to be decided). Half the savings will be shared with the federal government who is paying half the costs of care. While this gives providers a financial reward for reducing inappropriate care, it may also reward denials of needed care and/or cherry picking patients into the program that they are likely to make money on. As patients are unlikely to know the subtle differences between various federal and state programs, they are most likely to ask their provider (in the neighborhood) which program is best for them. DSS is also considering whether to allow patients to choose if they want to participate (opt-in) or if DSS will just auto-assign them and possibly allow them to opt-out. Advocates support an opt-in, patient-centered approach and are proposing that DSS pool savings across neighborhoods and apportion them based only on quality measures. If there are no savings, providers receive no incentives. In addition to incentives to deny care and cherry pick, DSS’ proposal could end up costing the state more if the program does not save money overall but one or more neighborhoods show savings. Those neighborhoods would qualify for rewards from the program. Those reward payments would not be matched by the feds. Advocates also raised concerns about the fate of safety net providers within the neighborhoods. They could be placed in the position of investing in care coordination and prevention, and being at the mercy of larger institutional providers to get reimbursed. This same problem occurred under capitated HMOs in HUSKY. Another problem with the plan is that DSS expects the neighborhood to invest in care coordination and other services upfront relying on possible rewards much later. It is unclear how many providers in CT have the resources to make such upfront investments. Many are concerned that it will take years before there are any savings and that costs may increase in the short term to pay for enhanced primary and preventive care. Planning groups are being asked to make these decisions without any data. The entire system requires a great deal of trust in DSS. The full committee considering the program design is meeting Friday at 9:30 in Room 1A of the LOB.