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Area agencies not alone fearing managed care
By: Chris Dornin, Special to The New Hampshire Challenge

The State Medicaid Program is about a third of the way finished imposing a massive shift from traditional fee-for-service healthcare to managed care, hoping to rein in costs through better coordinated treatment. The state will pay managed care companies on a capitation basis, and those middlemen will somehow pay everyone else.
The change largely pleases the hospitals, scares the community mental health centers, terrorizes the nursing home industry and triggered a class action suit by nine area agencies who provide service for citizens with developmental disabilities. NH Challenge is closely following that litigation. Should the plaintiffs win, many DD families could sleep better.

The coaches call time out
Hearing all this angst, state officials paused the implementation process in July to host four months of listening forums. Then they postponed all deadlines again at the Oct. 2 meeting of the Governor’s Commission on Managed Care. See related story in this issue of Challenge. It was a meeting packed with anxious consumers and healthcare providers who left happier than they arrived. The goal of the forums finishing up this month is to find out what went well and badly in the acute care phase that launched in January then decide what to do about it.
Another large group of vendors attended a typical listening forum Aug. 27 in the Brown Building of Health and Human Services in Concord. Jon Eriquezzo, residential director at Crotched Mountain Rehab Center in Greenfield, said predictable payments are crucial to vendors; their budgets are sensitive to cash flow.
“Some might fold if they have payment delays,” he said. “Or the door might open for national chains to take over in New Hampshire.”
Susan Fox, a member of the Governor’s Managed Care Commission, has a child with DD and serves as the associate director of the UNH Institute on Disability. She said many long term care services were covered in step one of the Medicaid change. Those chronic needs are being treated as acute medical problems. Prior approvals often come for only six weeks of service.
“We’re seeing lots of problems covering meds and specialty services,” Fox added. “And Granite State Independent Living has had trouble getting personal care services approved. They’re the canary in the coal mine.”
Eleven thousand subscribers with both Medicare and Medicaid had the luxury of sitting out the big change for the first year. That grace period was set to expire Jan. 1, but those people will have longer now to choose their MCOs. They can also leave that decision up to the state.

The target… all of your healthcare
Meanwhile, nursing homes and assisted living programs for elderly citizens will come fully under managed care sometime after Apr. 1 as first planned. The area agencies will undergo the same change later, at an undetermined date, if at all, depending on the courts. Medicaid officials have confirmed that no DD implementation plan will be available prior to the general election next month.
Community mental centers came under managed care last December, but only partly. The three MCOs agreed to keep funding them the usual way for their long term care services. The two sides are still negotiating how to pay group homes, community residences and other chronic care services for citizens with mental illness on a capitation basis. People don’t get well from schizophrenia the way they recover from a broken leg. They learn to compensate for the disability and try to live a full life anyway. How will the MCOs pay for those supports? Nobody knows.

Can we afford not to try this experiment?
A lot is at stake. Experts widely agree the baby boomers will stress entitlement programs to the breaking point in a few years. But others warn that poorly planned change is worse than no change.
The fiscal outlook is grim if federal law stays the same for the next 25 years. The Congressional Budget Office posted a dire long term budget projection in July at http://www.cbo.gov/sites/default/files/cbofiles/attachments/45471-Long-TermBudgetOutlook_7-29.pdf. It said entitlements plus interest on the national debt would consume 19 percent of gross national product in 2039. All federal taxes and fees would raise only 19.4 percent of GNP, leaving almost nothing for defense and other national needs.
Ned Helms, a former state commissioner of Health and Human Services, heads the Institute for Health Policy at the University of New Hampshire. He thinks the country is inevitably moving toward managed care.
“A well-coordinated, patient-centered system with a medical home for each person has real advantages over a fee-for-service environment,” Helms explained. “But I know that’s hard to do in a political system with budget constraints.”

Some early red warning flags
Last winter three Medicaid managed care organizations began paying New Hampshire hospitals, doctors, clinics and other providers that treat people for acute and temporary illnesses. Most subscribers in a Medicaid focus group this spring conducted by Horn Research said consumers had picked their care manager in ignorance of that company’s drug formulary, its prior authorization criteria, its provider network, and its track record. Half the 36 participants in the study said they were unhappy with their choices.
Families in need of treatment at Boston Children’s Hospital have found themselves in a special limbo. That tertiary care center only enrolled with one managed care company, Meridian Healthcare, which served 30 percent of the subscribers. Meridian dropped out of the New Hampshire market this summer. That left only Dartmouth-Hitchcock in Lebanon to serve the whole state.
Eriquezzo told officials that losing Boston children’s was a huge blow to the delivery system. “Families relied on that service,” the Crotched official said. “Will there be more whoops moments like that?”
Advocates for nursing homes and assisted living programs still assume they would get paid on some kind of per capita basis. Whenever that comes, the intrigue lies in the many missing details. The area agencies may or may not undergo a similar payment change even later.
The state has begun collecting rigorous quality assurance data, and the first four months revealed a possible pattern of bill payment delays and rejections for physical, speech and occupational therapy; prescribed medications; and medical transportation services. Small medical providers have been hardest hit because of cumbersome paperwork requirements, which differ for each managed care company.

Mental health centers got a break on chronic care
Roland Lamy heads the Behavioral Health Association representing the ten nonprofit community mental health centers. After years of financial losses due to low Medicaid rates, the industry gained a modest funding hike in the current state budget, mostly for crisis services. It also won a settlement this year in the Amanda D. class action suit over the decline of services for the mentally ill. But it’s common knowledge that any payment glitches could drive any number of mental health centers out of business.
“The biggest issue for us with managed care has been the incredible drain on physicians’ time justifying prescriptions for meds people have been getting for 10 and 15 years,” Lamy said. “Resolving a problem can take 45 minutes on the phone with a pharmacist. That’s time the doctor is not seeing patients.”
Jay Couture heads the Seacoast Mental Health Center, which gets most of its revenue from Medicaid. “This change went live with no pilot program,” she said. “It just went bam! If you add a middle man and keep the same pot of money, you have to diminish care.”

Hospitals: Full speed ahead, please
Steve Ahnen, president of the NH Hospital Association, said hospitals are familiar with managed care from years of working with HMOs and Medicare. That’s why the sector has made a pretty smooth transition to the new Medicaid program, he said. They’ve also had a seat at the table preventing implementation glitches and resolving in real time the few that arise.
Henry Lipman, senior vice president at Lakes Region General Hospital in Laconia, said the goal of managed care is to get more from the healthcare dollar by serving patients with the right care in the right place at the right time. Good preventive care can keep people out of hospitals.  “Our population benefits from better coordinated care,” Lipman said.

Cutting a 2 percent profit margin?
Kathryn Kindopp administers the Maplewood Nursing Home owned by Cheshire County and has seen payment snafus for pharmacies, ambulances and eye doctors. That onrushing April deadline really worried her.
“All of us are getting squeezed as it is,”  she said. “We’re seeing prescription denials for patients who have been on the same meds for years.”
Ted Purdy, the administrator at Sullivan County Health Care, has an open mind about managed care, at least in the long run. The current system is so broken for nursing homes that Medicaid managed care might be an improvement. The short run is the problem.
Today the counties lose a lot of money on Medicaid, Purdy explained, because they lose twice. Medicaid badly underpays them for their own residents, and the counties cover the state’s 50 percent matching share of costs for Medicaid patients in private nursing homes. Purdy, nevertheless, hoped the new policy might in the end build a range of suitable, cheaper community programs for elderly citizens. 
“But how will our new rates be calculated?” he asked. “How will the system work?”
That April deadline  scared John Poirier as well, president of the NH Health Care Association representing assisted living centers and private nursing homes. He said the state and the feds closely monitor them.
“What are the managed care organizations going to manage that isn’t already well managed?” Poirier asked. “And what will we pay them for that? Where will that money come from? We get 70 cents on the dollar from Medicaid now. We’re forced to cost shift onto our private patients who planned ahead and saved their money. Nationally, the profit margin for private nursing homes is 2 percent.”

Remember where we have been
Richard Cohen, director of the Disabilities Rights Center, helped sue the former Laconia State School when he worked for Legal Assistance.  He said the area agency system has bare bones funding.
“There’s nothing more to take from the system, unless you cut services further,” he warned. “That poses the danger of abuse, neglect and consumer regression. I have major trepidations putting the DD system under managed care. They want to make a profit, and they have no experience doing long term care.”