Resistance builds to managed care for dual eligibles

Physicians are speaking out as states look to a vulnerable and expensive population of patients as a target of budget cuts.

By Emily Berry, amednews staff. Posted April 9, 2012.

IOphthalmologist Victor Gonzalez, MD, stood in front of a crowd of hundreds of physicians and patients in McAllen, Texas, and spoke in stark terms about what is happening as the state changes and cuts coverage for dual-eligible patients: those old or disabled enough for Medicare, and poor enough for Medicaid.

A move to put those 320,000 patients in Medicaid managed care, along with other cuts that result in a 20% reduction in payment for dual eligibles, has put “the future health of our elderly, of our uninsured and Medicaid population … seriously at stake,” said Dr. Gonzalez, president of the Hidalgo-Starr County Medical Society, at the March 27 rally.

With cuts to physician pay, he said, doctors “have really reconsidered and have left the area.” He and others called for doctors and patients to press legislators to reverse the changes, which went into effect March 1.

Texas is one of many states where physicians are wrestling with the effects of — and fighting back against — the expansion of managed care into the poorest, oldest and often sickest population of patients. Bringing in managed care is designed to clamp down on costs and adds a private sector intermediary for medical decisions.

Dual eligibles were largely left out when states dramatically increased the use of managed care for Medicaid enrollees beginning in the 1990s. Medicaid managed care programs are approved through a waiver process by the Centers for Medicare & Medicaid Services, so expansion has been on a state-by-state basis and has built over time.

In 2010, about 39 million Medicaid beneficiaries were enrolled in managed care — about 71% of the total, according to the Kaiser Family Foundation. As of 2009, only about 12% of dual eligibles were enrolled in managed care. In the past, federal and state officials have expressed concern about putting a vulnerable population of elderly poor into managed care.

Dual eligibles are 15% of the Medicaid population but account for 39% of spending.

However, state budgets have come under severe strain, and with the passage of the Patient Protection and Affordable Care Act in March 2010, the federal government encouraged states to experiment with ways to control spending on dual eligibles. The health system reform law established the Medicare-Medicaid Coordination Office at CMS, tasked with improving the quality of care and controlling spending.

Together with the CMS Center for Medicare and Medicaid Innovation, the Medicare-Medicaid Coordination Office gave states incentives to try new ways to improve the clinical quality of dual eligibles’ care and control the cost of that care. At stake is $300 billion in annual spending across Medicare and Medicaid for a group that makes up 15% of the Medicaid population but accounts for 39% of the program’s spending, and 21% of Medicare’s enrollment but 36% of Medicare spending.

Growing trend

Twenty-four states and the District of Columbia have moved at least some dual eligibles into managed care, according to the Kaiser Family Foundation. Many of those states are considering expanding the dual-eligible population in managed care, while others are taking the first steps toward moving those patients there. In April 2011, CMS gave 15 states $1 million grants to assist in designing managed care initiatives that would reduce costs and improve the clinical quality of care for dual eligibles. Twelve of those states already had some dual eligibles in Medicaid managed care, but three — Connecticut, Oklahoma and Vermont — did not.

By moving dual eligibles to managed care, states hope to save money on what Medicaid covers, which mostly are the out-of-pocket expenses associated with Medicare deductibles. Texas, for example, hopes to save $475 million over two years with the changes it has made to dual-eligible coverage. Texas requires anyone on Medicaid older than 21 to be in the state’s managed care program, Star-Plus. Dual eligibles moved into the program in full as of March 1. That was only two months after the state cut coverage to dual eligibles.

71% of Medicaid beneficiaries were enrolled in managed care in 2010.

“The people who are affected are our most fragile, our elderly, our poor, the ones who are unable to fend for themselves,” C. Bruce Malone, MD, an orthopedic surgeon from Austin, Texas, president of the Texas Medical Assn., said at the March 27 rally.

The start of a new year of Medicare deductibles, the state’s payment rate cuts and a technical glitch in claims processing meant that some Texas physicians have been paid nothing for caring for some of their neediest patients since the beginning of 2012.

As many as half of the patients who come to the family practice of Javier Saenz, MD, in La Joya, Texas, are dual eligibles. In March, he had to take out a line of credit at the bank, because he had run through his savings trying to keep his practice open. It was the first time since opening his practice 26 years ago he had been forced to borrow money for operations.

The state’s effort to shift his patients into managed care plans has reduced his time with patients and added to his administrative burden, he said. He has to call managed care companies for approval for common diagnostic tests.

“They’re taking time away from us,” Dr. Saenz said. “We’re asking [the health plan] to approve certain services, and we’re talking to somebody 300 miles away.”

The Texas Health and Human Services Commission is looking for ways it can mitigate the pay cuts’ impact on physicians whose care is most vital, department spokeswoman Stephanie Goodman said.

24 states and the District of Columbia have at least some dual eligibles in managed care.

The momentum of managed care for dual eligibles is growing, despite the backlash. Not only do states feel they can save money by doing that, but health plans also believe they can make money in that business by helping states save on their Medicaid budgets. A 2011 research paper funded by the insurance trade group America’s Health Insurance Plans found that under the best-case scenario, managed care for dual eligibles could save $150 billion during the next 10 years.

In California, Gov. Jerry Brown is pushing for more managed care enrollment for its 1.5 million dual-eligible Medi-Cal enrollees, and California is one of 15 states with a CMS-approved managed care demonstration project in the planning stages, expected to launch in January 2013.

Ted Mazer, MD, an otolaryngologist from San Diego who serves on a Medi-Cal advisory committee, believes there are better approaches to saving money on Medicaid.

“I think there’s a population of [dual eligibles] here whose care is badly managed,” said Dr. Mazer, vice speaker of the California Medical Assn.’s House of Delegates. “But they are no different than any Medicaid patient who is not well-managed. If you want to identify all of those folks and put them into case management, that would be much more sensible.”

WellCare settles fraud allegations with Georgia Medicaid

Posted: Apr 09, 2012 11:22 AM EDT Updated: Apr 09, 2012 11:22 AM EDT

ATLANTA, GA (WRCB) — Attorney General Sam Olens announced today that Georgia is one of nine states that, along with the federal government, have settled allegations against WellCare, a health maintenance organization.

WellCare had entered into contracts with various States’ Medicaid programs, including Georgia, to provide managed care services to enrolled program beneficiaries. This settlement resolves allegations of accounting fraud, falsification of records and other reports, including number manipulation, and manipulation of the enrollment of covered recipients by selective marketing and related misconduct.  

Under the Agreement, WellCare agreed to pay the participating States and the United States $137.5 million, plus interest, in four installments over a period not to exceed three years. Georgia Medicaid’s portion of the settlement is $33 million in state and federal dollars. Medicaid is funded jointly by the federal and state governments.

Examples of the alleged accounting fraud include improper acts such as inflating expenses that serve as the basis for setting capitated rates — in one allegation, counting reinsurance profit as an expense.  

Examples of alleged falsification of records and manipulation of numbers include falsifying encounter data, and manipulating the Incurred but Not Reported numbers (an actuarial estimate of claims not yet reported or paid) and the Medical Loss Ratio (which reflects the percentage of every premium dollar spent directly on the provision of health care).

Examples of alleged manipulation of the enrollment of covered recipients include targeting desirable recipients (low-cost, healthy) for enrollment, while discouraging, failing to enroll, or disenrolling undesirable recipients (high-cost, chronically ill).

As part of the settlement, WellCare has entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. This Agreement provides for on-going oversight of the corporation’s rehabilitation for three years.

The investigation involved five whistleblower lawsuits filed under the qui tam provisions of the Federal and certain State False Claims Act. These actions are pending in the United States District Court for the District of Connecticut, the Middle District of Florida and the State of Florida Second Circuit.

There is also a criminal component to this case. In March of 2011, five former executives were charged with conspiracy to commit Medicaid fraud and making false statements. This is in addition to an information and plea agreement by a former executive entered into in 2009.

DC Plan Rolls Out Diabetes Texting Pilot

Washington, DC-based Medicaid managed care organization, D.C. Chartered Health Plan, is rolling out a pilot text messaging program for members with diabetes. The Medicaid plan is providing 50 of its members with the free messages, which will include tips about living with diabetes, as part of a broader program that includes in-person visits.

The texts aim to encourage patients to schedule annual appointments and get annual eye and foot exams in an effort to avoid unnecessary trips to the emergency room. The texts also include tips for taking medication “appropriately” and other tips for lifestyle changes that would benefit their health. The texts are not all one-way, however, some are interactive quizzes and others are announcements for community events.

In the future, Chartered hopes to expand the program if it proves successful. The plan expects to develop support groups for various diseases, send disease-specific messages, and personalized messages like appointment reminders.

“Mobile health is the wave of the future for improved management of chronic disease,” Dr Richard Katz, director of the division of cardiology at the George Washington University Hospital, stated in a press release. “It can be extremely popular with diabetes patients and result in reduced emergency room visits and hospitalizations.”

Last year George Washington University Hospital partnered with Chartered Health Plan on a pilot of WellDoc’s DiabetesManager. In December 2011 MobiHealthNews reported that Dr Katz had presented findings of a demonstration program called DC HealthConnect at the mHealth Summit in Washington DC. The program tested WellDoc’s mobile health program DiabetesManager during a 12-month period. The results: DiabetesManager reduced ER visits and hospital stays by 58 percent on average compared to the previous year — when they weren’t using the program.

“Our goal is to leverage mobile technologies and smart networks to improve the well-being of our community,” Chartered executive Karen Dale stated. “We’ve been committed to improving the quality of care, reducing costs and creating a healthier community for the past 25 years, and will continue to take advantage of new opportunities to solve Washington’s most critical health and social challenges.”

More in the press release below:

WASHINGTON, April 9, 2012 – D.C. Chartered Health Plan, Inc., the oldest Medicaid managed care organization in the District of Columbia, is launching a new text messaging program for 50 of its members to help them better manage diabetes, which requires regular care to avoid costly complications. This program enables participants to receive brief tips about living with diabetes, a disease that disproportionately affects the community, as part of a case management program that also includes face-to-face support.

Research shows that people who actively participate in their care can more effectively manage chronic diseases such as diabetes. In many cases, however, particularly in the neighborhoods Chartered serves, people with diabetes find it difficult to understand and manage the disease. The new program provides a different avenue for education.

“Mobile health is the wave of the future for improved management of chronic disease,” said Richard Katz, M.D., director of the division of cardiology at the George Washington University Hospital, which previously partnered with Chartered Health Plan on a similar program. “It can be extremely popular with diabetes patients and result in reduced emergency room visits and hospitalizations.”

Diabetes affects local residents at substantially higher rates than in other areas of the country. In 2010, 10.9 percent of adults in the District received a diabetes diagnosis, compared with only 8.7 percent nationwide, and death rates associated with the disease are also disproportionately higher. Poorly managed diabetes can lead to complications such as blindness and foot problems, often leading to costly emergency room visits that could be avoided.

“This program connects our diabetic members to the real-time support they need,” said Karen Dale, an executive at Chartered Health Plan. “Through this and other innovations, we’re opening doors to good health for those who need it most in our community.”

Bridging the gap through text messaging

For years, Chartered has sought to keep members with diabetes engaged in their care through regular telephone calls and mailings, as well as face-to-face interaction with members. By adding a text messaging element, Chartered is expanding the impact of this effort and enabling members to play a more active role in the management of their disease.

The program encourages members to avoid unnecessary emergency room visits and instead, to schedule annual appointments with their primary care providers as well as get annual eye and foot exams. It also helps people take their diabetes medicines appropriately and make lifestyle changes to better support their health.

Participants in the program receive tips and messages on various topics, including when to contact a doctor, nutrition tips and diabetes-related information. The text messages also include interactive quizzes and announce community events to keep participants involved.

Future plans

The program will be evaluated later this year with an eye toward potential expansion. It is part of Chartered’s commitment to transform health care in the District. Building on its secure cell phone technology platform, Chartered ultimately hopes to create support groups for various diseases and send other disease-specific messages and personalized messages, such as appointment reminders, to its members.

“Our goal is to leverage mobile technologies and smart networks to improve the well-being of our community,” said Dale. “We’ve been committed to improving the quality of care, reducing costs and creating a healthier community for the past 25 years, and will continue to take advantage of new opportunities to solve Washington’s most critical health and social challenges.”

About Chartered Health Plan

As the oldest Medicaid managed care organization in the nation’s capital, Chartered Health Plan, Inc. is the most comprehensive resource for local residents with serious health conditions. Chartered opens doors to good health for those who are most at risk, facilitating care to more than 100,000 people who are Medicaid-eligible or uninsured, who would otherwise have limited access to the care they need.

Chartered recognizes that good health also depends on addressing a number of social factors, such as employment and a stable and safe living environment. That’s why Chartered cares about the “whole person,” offering innovations that address these factors and empowering members to become actively engaged in their care. The National Committee for Quality Assurance (NCQA) awarded Chartered an accreditation status of commendable for service and clinical quality that meet NCQA’s rigorous requirements for consumer protection and quality improvement.

SOURCE Chartered Health Plan

Medicaid Provider shares fall

Sector Snap: Medicaid provider shares tumble

By The Associated Press

Shares of insurers Molina Healthcare Inc. and Centene Corp. sank Monday in early trading, one trading day after the state of Ohio picked some competitors to administer its Medicaid program for more than 1.5 million people.

State officials said Friday they selected Aetna Better Health of Ohio, CareSource, Meridian Health Plan, Paramount Advantage and United Healthcare Community Plan of Ohio. Medicaid is a state and federal program that covers the aged, blind, needy and disabled. States hire private health insurers to run their Medicaid programs.

Aetna and Meridian Health are new entrants to the Ohio program, Bernstein analyst Ana Gupte said in a research note.

The loss is “most problematic” for Long Beach, Calif.-based Molina, Citi analyst Carl McDonald said in a separate research note. He called Ohio Molina’s most important state and said it is expected to generate more than $1.2 billion in premiums this year, or about 20 percent of the company’s total.

But he also noted that Ohio’s contribution to Molina earnings would have dropped in the next couple of years due in part to growth in the rest of Molina’s business. McDonald also said the loss means Molina now has capital it would have used to support its Ohio program available for other expansions.

Ohio represented about 9 percent of Centene’s revenue, Goldman Sachs analyst Matthew Borsch said in another note. Other incumbent providers pushed out for the contract, which starts in 2013, include WellCare Health Plans Inc. of Tampa, Fla., and Amerigroup Corp. based in Virginia Beach, Va. Ohio represents a much smaller portion of revenue for those companies compared to Molina and Centene.

Borsch said the decision could put these companies, all of which focus on government business like Medicaid or Medicare, at a disadvantage later this year, when Ohio awards a potentially lucrative contract to cover and coordinate care for people who qualify for both Medicaid and Medicare.

Shares of Molina fell more than 22 percent, or $7.87, to $27.14 in early trading, while Centene’s stock was down 9.7 percent, or $4.93 to $45.87.

Shares of both WellCare and Amerigroup fell by much smaller margins as the broader markets declined about 1 percent.

IRS Gets Half of Implementation Dollars

Why the IRS gets half of health reform’s implementation dollars

From Wonkblog – Washington Post

By , Monday, April 9, 9:47 AM

Daniel Acker Bloomberg Among its many provisions, the Affordable Care Act included a $1 billion fund to cover various implementation costs. The law didn’t commit that fund to any particular activity, but rather allowed the administration to use it wherever needed to lay the health care overhaul’s foundation.

Monday morning, The Hill’s Sam Baker reported that the White House has found a home for half that fund — $500 million — at the Internal Revenue Service.

“HHS plans to drain the entire fund by September, before the presidential election and more than a year before most of the health law takes effect,” Baker reports. “HHS has transferred almost $200 million to the IRS over the past two years and plans to transfer more than $300 million this year.”

Sending a big chunk of money to one of America’s least liked federal agencies is unlikely to score many political points. That might be especially true with the health reform law, where the IRS is responsible for administering half the much-maligned mandated purchase of insurance.

But, policy wise, it probably makes a lot of sense. Even though it’s a health insurance expansion, Treasury is probably on equal footing with Health and Human Services in making the Affordable Care Act work. It will be the agency that administers one of the most important parts of the health care overhaul: The requirement to purchase health insurance.

It will not, as some have suggested, hire an army of gun-toting IRS agents, who will show up at your door and demand proof of insurance. The agency’s role will be much less dramatic. The agency has already started administering tax credits for small businesses, as an incentive to provide health insurance to their workers.

It’s role will expand significantly when the coverage expansion starts in 2014. It will, for example, add new lines to annual tax filing forms where individuals will write down their source of health insurance coverage. Those who do not include coverage will face a tax penalty, as part of the individual mandate.

The IRS will also administer subsidies to low and middle-income Americans, to assist with the purchase of health insurance. Since those subsidies are tethered to income — the lowest-income Americans get the most assistance purchasing coverage — the IRS will play a crucial role figuring out who gets what.

Treasury isn’t usually the most public agency when it comes to the health reform law. Much of the rollout has happened at Health and Human Services, which has helped states lay the groundwork for setting up health insurance exchanges and regulating their insurance markets. But as the health reform law’s bigger provision kicks in, the department will play a key role in achieving one of the law’s biggest goals: Expanding access to affordable health coverage.

© The Washington Post Company