Medicaid Managed Care for People with Intellectual Developmental Disabilities

7/31/2019 Medicaid Managed Care for People with Intellectual Developmental Disabilities

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MEDICAID MANAGED CARE FOR PEOPLE WITH

INTELLECTUAL DEVELOPMENTAL DISABILITIES

REVISITING THE EXPERIENCES OF

ARIZONA, MICHIGAN, VERMONT AND WISCONSIN

By: Dennis L. Kodner*

OPENING COMMENTS:

I wanted Dr. Kodner to prepare an updated report on the status o managed care experience in theour states we identied in the paper he prepared in 2011. As many states are proposing moving morepersons with developmental disabilities into managed care, it is critically important to understand thelessons learned rom the initiatives in these our states.

The balance between ensuring access and adequate coverage with nancial risk continues to be anissue in these experiments. Adequate and timely government unding is one o the public policy is-sues that require constant attention otherwise programs could suer nancial distress or collapse.

What is encouraging is that managed care can work or populations that like those with developmentaldisabilities i there is adequate preparation and planning on the part o the state ocials and provid-ers o care. The one big lesson is that it takes time or all the kinks to get worked out and even thengovernment ocials have to be patient.

What is disconcerting are the limited evaluations, i any, o these our experiments either at e state orederal levels. In Wisconsin, there was an important legislative report that helped improve the initiative.

Arthur Y. Webb

INTRODUCTION

Intellectual Developmental disabilities (IDD) are a diverse range o severe chronic conditions that arethe result o mental and/or physical impairments. Aecting less than 2 percent o the population, IDDincludes mental retardation (MR), cerebral palsy (CP), autism spectrum disorders, Down syndrome,Spina Bida, and other complex genetic, chromosomal and etal disorders. People with IDD experi-ence problems with language, mobility, learning, sel-care, independent living, and economic sel-su-ciency. Depending on the specic condition, however, there may also be many associated physicalhealth and/or mental health problems, as well as challenging and abnormal behaviors.

Needs as complex as the above demand a wide range o IDD- and non-IDD-specic services rom the

medical, behavioral health, long term care, and social support systems. As a result, the IDD popula-


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tion requently experiences problems with respect to their ongoing care, especially the lack o coordinaservices. Moreover, the group is among the most costly o Medicaid beneciaries. As a result, the statesbecoming increasingly interested in adopting a managed care strategy to improve the accessibility, quand cost-eectiveness o services and supports or people with IDD.1

Arizona, Michigan, Vermont and Wisconsin have taken the lead in implementing managed care solutionMedicaid beneciaries with IDD. While the our models dier, the experiences and the lessons learnedate can nonetheless help policy-makers and providers in New York and in other states as they contempand plan how to best harness the potential o managed care or the IDD population.

The ollowing briefy updates a discussion o these pioneering Medicaid managed care programs presein an earlier paper.2

REVISITING FOUR PIONEERING MEDICAID MANAGED CARE PROGRAMS

Ater a short description o each states model, we will examine issues and lessons learned to date, includ

any major challenges.

ARIZONA

Program: Arizonas Medicaid program or people with IDD operates with a long-standing Section 1waiver under a unique structure known as the Arizona Health Care Cost Containment System (AHCCCAHCCCS is both the single state Medicaid agency and a state-operated, statewide managed care plan.

The IDD program serves children and adults. The Medicaid programs unique structure enables the pooo unds rom Medicaid home and community-based services (HCBS), ICF/MR, health plan services,havioral health services, and limited stated-only IDD-specic services. Home- and community-based

vices (HCBS) are an entitlement available to individuals who are at immediate risk o institutionalizatiAHCCCS subcontracts on a capitation basis with the States Division o Developmental Disabilities (IDDto manage all covered services or Medicaid beneciaries with IDD.

Health care and long term care services are managed by a network o contracted health plans on a caption basis.4 Behavioral health services are provided on a capitated basis through Regional Behavioral HeAgencies (RBHAs). IDD-specic services are reimbursed on the basis o published charges; these servare directly purchased by IDDD rom qualied vendors that have been traditionally part o the IDD netw

1 New York State has received an 1115 waiver rom the Centers or Medicare and Medicaid Services (People First Wato transorm the states current IDD system into a managed care program.2 See Kodner, D. New York States Peoples First Waiver: Concept Paper on Strategic Issues and Options Related tDevelopment o Innovative Medicaid Managed Care Models or Developmentally Disabled Adults, Arthur Webb Group,2011.3 A companion statewide program, the Arizona Long Term Care System (ALTCS), specically ocuses on Medbeneciaries with long term care needs and serves two groups: 1) older persons and adults with physical disabilities; anindividuals with IDD (both children and adults).4 All Medicaid beneciaries, including those with IDD, must enroll in a contracted health plan. Some o these health pcover long term care benets as well. When individuals who are eligible or long term care are enrolled in a health plan that not cover long term care benets, they have two options: 1) enroll in a health plan that covers both acute and long term benets; or, 2) receive needed long term care through enrollment in a separate plan that covers long term care benets-onl


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A support coordinator, i.e.., case manager, is responsible or coordinating services across the entire con-tinuum o care and in all settings.Experience and Lessons to Date: The Arizona Medicaid system is currently serving 32,000 enrollees withIDD. According to IDDD5, 24,000 enrollees (75% o the total) are receiving a combination o acute/be-havioral health and long term care benets. Total IDD enrollment is increasing at about 4.6% per year. The2012 blended capitation rate or this combined group is $3,199/month, which covers all services regard-less o the provider payment method used (capitation or published charges).

Arizonas 30+ year history o Medicaid managed care appears to serve the states IDD population well.6 Nomajor problems have been reported with the program. It operates within budget. And, the payment systemworks rom the state, health plan, and provider points o view.

Care coordination can be a challenge in the overall design o Arizonas Medicaid IDD program. This is be-cause ongoing support or the individual can cut across our dierent service bundles (health care, behav-ioral health care, long term care, and IDD-specic services) and as many as 3-4 organizations with clinicaland nancial accountability. Nonetheless, it appears that the support coordinator (case manager), who is

backed-up by a number o specialized team members and support systems, is well-equipped to handlemost, i not all o the challenges involved.

MICHIGAN

Program: Michigan established a managed care programthe Michigan Specialty Services and SupportProgram (MSSSP)in 1998 or children and adults with mental health, substance abuse, and IDD. Theprogram operates with both Medicaid 1915 (b) and (c) waivers; this enables individuals to receive neededHCBS whether or not they are eligible or institutional care.

The three populations are served by the same Prepaid Inpatient Health Plan (PIHP). PIHPs are capitation-

nanced health plans operated by the network o county-run Community Mental Health Services Pro-grams (CMHSPs).7 CMHSPs remain as the single point o entry or mental health, substance abuse andIDD services.8 However, the PIHP is responsible or the delivery and costs o all mental health, substanceabuse, IDD, and LTC services and supports or its enrollees, including the HCBS waivered services. 9

Since 2010, each PIHP receives capitated per member per month (PMPM) payments rom the Depart-ment o Community Health. There are two monthly payments: One covers mental health, substance abuse,and IDD state services (including targeted case management and special childrens Medicaid services);the other is or services provided to people with IDD who live in a residential group home and are enrolledin the Habilitation Support Waiver (HSW) Program. All per capita payments are blended (i.e., they cover

the three types o enrollees) and structured around Medicaid eligibility (DAB, TANF, and HSW) rather

5 Telephone interview on May 3 and 4, 2012 with Sherri Winse, AZ Department o Economic Security, Division oDevelopmental Disabilities.6 The apparent overall success o AHCCCS refects years o ne-tuning; see Health Management Associates (HMA),Final Report on Pilot to Serve Persons with Intellectual and Developmental Disabilities Submitted to 81 st Texas Legislature bythe Texas Health and Human Services Commission (HHSC), October 2010.7 PIHPs were supposed to be run by their respective CMHSPs. However, as a result o the State minimum enrollmentrequirement (at least 20,000 enrollees per PIHP) mandated in 2001, counties were encouraged to partner with nearby countiesto operate PIHPs jointly. Today, there are 18 PIHPs in 49 counties.8 They also manage all non-Medicaid dollars and services. However, the trend has been to contract with PIHPs toarrange and/or provide these services on their behal.9 HCBS waivered services are only available to individuals with IDD.


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than disability designation (e.g., MI, IDD). Ater calculating the base rate or each Medicaid eligibilitygroup, the gure is multiplied rst by an age/gender actor and then by a geographic actor or eachenrollee to obtain the total PMPM capitation payment.

Experience and Lessons to Date: MSSSP is the end result o Michigans gradual eorts over nearly30-years to achieve greater fexibility over state and ederal unds, increase program perormanceand accountability, enhance the delivery and integration o services, improve client outcomes, andcontain the overall cost o care or several high-risk populations, including people with IDD.

In Fiscal Year 2011, the program served over 220,000 Medicaid beneciaries, including 41,273 in-dividuals with IDD.10 The 2011 capitation or the IDD group under the 1915 (b) waiver was $1,384/month; or the IDD group under 1915 (c) waiver, $4,299/month.11

VERMONT

Program: Vermont operates virtually its entire Medicaid program under an 1115 waiver, the Global

Commitment Waiver (GCW).12

In essence, the State has entered into a managed care arrangementwith the ederal government and acts like a managed care organization (MCO). In order to secureederal backing, Vermont has agreed to assume a degree o nancial risk by operating the programunder a global spending cap set at $4.7 billion spread over a 5-year period. In return, Vermont hasgained the ability to include state expenditures which were not previously counted toward ederalmatch, as well as the fexibility to use excess dollars (savings) to invest upstream in new and ex-panded programs and services. IDD services were rolled into the GCW arrangement.

The states existing IDD system continues to operate as previously. A network o ten (10) area-widenon-prot Designated Agencies (DAs)unded on the basis o a budgeted allocation rom the Ver-mont Department o Disabilities, Aging and Independent Living (DAIL)determine client eligibility

or both children and adults, develop an initial plan o care, and provide and/or purchase needed ser-vices rom local contractors.13 The agencies submit reimbursement claims on a bi-weekly basis orservices actually provided; these claims are processed by an outside vendor or the states MedicaidAgency, the Department o Vermont Health Access (DVHA). Since the inception o the DAs, theseagencies have employed managed care approaches like case management to coordinate services.

Experience and Lessons to Date: GCWs sole impact on Vermonts IDD system is to leverage Med-icaid matching unds or two previously unmatched services, i.e., employment supports and amilysupports. This additional ederal nancial participation accrues to the State and not necessarily toDAIL or the DAs.

10 According to the Michigan Department o Community Health (DCH), the breakdown o the IDD population is asollows: 19% (children) and 81% adults; 69% (IDD-only) and 31% (Mental Health plus IDD).11 According to DCH, there were 8,114 enrollees in this category. They receive additional services under theHabilitation Supports Waiver (HSW) because o their serious disabilities.12 The GCW does not include LTC services and supports or the low-income elderly and other adults with physicaldisabilities; this is provided under a separate Section 1115 waiver/demonstration program.13 There are ve (5) so-called special service agencies involved in the program as well. These agencies specializein particular types o clients or services. While they deliver services, they are not engaged in the initial intake, eligibility,assessment, and care planning unctions assigned to the DAs.


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To keep costs within budget, Vermont has implemented a priority system or the provision o servicesand supports or people with IDD. In Fiscal Year 2011, Vermont served 4,029 people with IDD; 2,539were receiving services under the HCBS waiver.

The constant increase in numbers o individuals served by the program, however, has recently led tocuts in the budget allocations or the DAs and special service agencies; 2.7% in FY 2011 and 1% inFY 2010. DAIL gives these agencies the fexibility to address budget allocation reductions throughoperational eciencies, vacancy savings, etc.

Overall, Vermonts approach to serving the Medicaid IDD population is the most cautious and con-servative o the states reviewed in this paper, but works well.

WISCONSIN

Program: A 1999 law established a new Medicaid managed care programFamily Careor peoplein need o long term care (LTC) services and supports.14 Family Care was implemented in 2000 and

operates under the authority o a combo 1915 (b) and (c) waiver. These waivers enable the programto pool HCBS waiver and ICF/MR dollars, certain state plan coverages, and state and county match-ing unds.

Family Care covers all LTC services and supports, including nursing homes, ICF/MR, HCBS waiverservices, state plan HCBS (or example, home health and therapies, but not acute care-orientedservices), and behavioral health services. Covered services are delivered and/or arranged by MCOscontracting with the Department o Health Services (DHS). For the most part, these are homegrown entities ormed in part by elements o the IDD network.

DHS pays each MCO a monthly capitation payment or each participant or comprehensive care

and intermediate care.15 Until recently, capitation was calculated on the basis o the most recentlyavailable unctional characteristics o Family Care participants (derived rom the unctional screenassessments prepared or each individual) in each MCO and the actual 2008 service expendituresreported by the ve original pilot counties adjusted or current infation.16 In 2010, monthly capita-tion rates or the comprehensive care level ranged rom $2,689/month to $3,542/month.

The program began as a successul pilot,17 and has been gradually expanded statewide since 2008;it is currently available in 53 o the states 72 counties. In 2008, Family Care served 15,688 par-ticipants18 (slightly over 4,000 participants with IDD or about 25% o total participants); as o June

14 The Family Care program should not be conused with the Wisconsin Partnership Program. The ormerprogram involves the management o LTC services and supports in a single, capitated managed care organization, whilethe latter combines the management o health and long term care services under a single, and capitated managed careorganization. Most Medicaid beneciaries with IDD are enrolled in Family Care; this program is the ocus o this paper.15 Intermediate care is made available to participants with less severe clinical or behavioral health needs, andconsists o more time-limited services. Family Care participants with IDD all into the more extensive and higher-costComprehensive Care category.16 The rate is calculated jointly by DHS and PricewaterhouseCoopers, LLC.17 Family care was piloted in a limited number o counties; the pilot received a positive evaluation. Initial programseliminated waiting lists, substantially improved participant choice, achieved high consumer satisaction, and reduced costsvis--vis traditional ee or service arrangements. It was on this basis that Wisconsins Governoron recommendation oDHSmade the decision to expand statewide.18 The State preers to reer to individuals enrolled in Family Care as participants rather than enrollees.


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2010, there were 28,885 participants (11,905 participants with IDD or 41.2% o total participants).People with IDD (both children and adults) are the astest growing group o program participants,and are considered the most costly to serve because o their high-needs.19 Wisconsins network oAging and Disability Resource Centers (ADRCs) are linked to the FC system. ADRCs make elderlyand disabled citizens aware o long term care services and supports throughout the state, as well aseligibility requirements or various programs including FC. Perhaps this is a eature that needs urther

consideration or other states.

Experience and Lessons to Date: The Wisconsin Joint Legislative Audit Committee (see ootnote 11below) recently perormed an evaluation o Family Care. The report provides a good overview o theprogram, including the challenges aced.

According to the analysis, Family Care has improved access to LTC services and supports, providesparticipants with choice and care tailored to individual needs, and achieves high participant satisac-tion. However, serious questions have been raised about the programs nancial stability.

Two (2) major scal problems were identied in the report:

X Several MCOs in the program have incurred operating decits. Although the overall scal pictureor the MCOs began to improve in 2009/2010, three (3) o the nine (9) plans continue to be atserious risk o insolvency; and,

X Five (5) o the Family Care MCOs owed substantial amounts in required reserve unds.

The ollowing two (2) actors appear to be responsible or this unstable scal situation:

X MCOs maintain that they are being underpaid, i.e., capitation payments are lower than actual par-ticipant costs, especially or rapidly increasing numbers o participants with IDD and other high-cost needs.

X Newer MCOsthose that joined the program during the expansion phaseare less experiencedin managing care and the nancial risks involved.20

To remedy this situation, DHS has increased its nancial oversight. Equally as important, starting in2010, capitation rates were calculated with a new ormula which takes into account the proportion oparticipants in each o the three groups served (IDD, physically disabled, and elderly).21 It is not clearwhether this new ormula will generate an adequate level o unding.

19 According to the Wisconsin Joint Legislative Audit Committee, in Fiscal Year 2009-10, average monthly servicecosts per participant with IDD ranged rom $2,900-$4,600, and rom $1,800-$2,800 per participant who was physicallydisabled or elderly; see Wisconsin Joint Legislative Audit Committee, An Evaluation o Family Care, Department oHealth Services, Report 11-5, April 2011.20 DHS acknowledges that it takes at least three (3) years, perhaps even longer, to become a well-managedprogram that is capable o aligning expenditures with available resources.21 First, calculate the baseline rate or each o the three (3) types o Family Care participants (developmentallydisabled, physically disabled, and IDD); second, adjust the amount based on costs associated with the unctionalcharacteristics o participants in the MCO (using data rom the unctional screen assessments); third, create a weightedaverage amount or each MCO using the three (3) rates and the proportion o each type o program participant served.


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*This paper was authored by Dr. Dennis L. Kodner with the support of the Arthur Webb Group, Inc.

About the Author:

Dennis L. Kodner, PhD is a global thought leader and strategist on integrated systems and services, and an expert on coordinated and managed care

strategies and solutions for people with chronic, disabling and medically complex conditions whose needs cut across the acute, long term care, mental

health and social support systems. In addition to consulting with providers, payers and policy makers, he is currently an International Visiting Fellow at

The Kings Fund, London, UK, where he co-directs an Aetna Foundation-funded project on coordinated care for complex populations.

In addition to the above, DHS is considering the recommendations made by a consultant (APSHealthcare) in February 2011 to make additional modications o the capitation rate-setting ormula.This includes the possibility o additional risk-sharing payments (up to ve years) or new MCOs, aswell as urther adjustments or participant characteristics that better predict high-use/high-cost.

IMPLICATIONS

There are wide variations in how Medicaid managed care can be used to meet the complex needso people with IDD. The programs operated by Arizona, Michigan, Vermont and Wisconsin weresketched in this paper. These states were early adopters o managed care or children and adultswith IDD. Although the approaches dier in major ways, they represent some o the most innovativemodels.

Our review o these our states experience suggests that Medicaid managed care is capable o e-ectively delivering the broad range o services and supports or the IDD population. There are,however, two urther lessons that can be learnedprimarily rom Wisconsins Family Care program:

First, homegrown health plans, i.e., those which are organized by local providers and are new tomanaged care, will need 3-5 years to mature to the point where they can satisactorily manage careand the nancial risks involved or IDD enrollees on a capitated basis. This will require creative risk-sharing arrangements.

Second, capitation rate-setting models or the IDD programs must be careully calibrated to take intoaccount those enrollee characteristics which best predict the high costs o this population.

Documents

Medicaid Managed Care for People with Intellectual Developmental Disabilities