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Bella Says Many States in Giant Duals Demo Wouldn't Join Until 2014

By John Reichard, CQ HealthBeat Editor

October 17, 2012 -- A controversial program to let states move up to 2 million chronically ill low-income Medicare enrollees into managed care plans will roll out much more slowly than its architects originally envisioned.

The slower pace could blunt criticisms by lawmakers, some Medicare experts, and a top hospital industry official that the so-called duals demo is moving far too quickly to safeguard care for its vulnerable enrollees. Overall, some 10 million Americans are duals, shorthand for people eligible for both Medicare and Medicaid. Many of them are in fragile physical or emotional condition, or are cognitively impaired.
The Centers for Medicare and Medicaid (CMS) official in charge of the demo, Melanie Bella, updated state officials on the status of the program at a conference in Baltimore sponsored by the National Academy for State Health Policy.

Bella said that 25 states have applied to take part. She said 14 of those requested permission to launch their programs in 2013. The remaining 11 would begin in 2014.

In remarks at the conference and in an interview afterwards, Bella described her agency as moving at a very deliberate pace in handling applications from the states. She underscored the fact that so far only one state—Massachusetts—has received the go-ahead for its program, which is supposed to launch next spring. The review process is rigorous, she added, indicating that the fact that a state applies is no guarantee it will be approved.

Complex Politics

Bella's comments come against a backdrop of effusive praise for the demo from some observers, and at the same time of strong criticism from others. The reaction does not break down along party lines.

For example, Medicaid policy experts say the program, launched under the health care law (PL 111-148, PL 111-152) is long overdue. The status quo for the duals is unacceptable, they say, because too often these patients have no one to oversee their complex treatment needs. In many instances, they have a number of doctors and take a variety of medications.

The lack of oversight leaves them without protection against dangerous drug interactions. It means they don't take their medications on time and don't get other forms of preventive care that would reduce the need for costly hospital admissions and readmissions. It can mean unnecessary and duplicative testing. And, properly managed care could improve their health and safety. Also, it could cut billions of dollars in federal and state spending, experts say.

Federal and state officials hope the demo will be one piece of a complex solution to rising debt that threatens the nation's economic well-being.

Bella's plans for the demo earned her virtual rock star attention and admiration earlier this year at a meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC). State officials have voiced strong support, notably Matt Salo, executive director of the National Association of Medicaid Directors.

But the large-scale shift of duals into managed care plans the demo envisions creates potential dangers too if not administered carefully. And depending on the tactics used by states, it could violate the legal right that Medicare enrollees have to choose their own doctor or hospital. Managed care plans often limit a patient's ability to see the provider of his or her choice. If a Medicare beneficiary freely chooses to enroll in a managed care plan, that's one thing. But if that choice isn't made without the beneficiary fully understanding the consequences, it's a violation of legal beneficiary protections, patient advocates say.

Beyond the patients themselves, many other players in the health care system have a strong stake in the demo. Hospitals and doctors treating the duals now could lose lots of revenue if they don't participate in the new managed care networks formed to treat these patients more efficiently. Members of Congress are wary about provoking a backlash from seniors if their care is mishandled. And policy experts who have long championed better managed care of the duals worry if the demo moves too quickly, efforts to streamline their treatment could be set back for years.

Policy leaders ranging from Federation of American Hospitals President Chip Kahn to Georgetown University professor Judy Feder have warned that the demo could violate the traditional right of Medicare enrollees to choose their own providers. The Medicare Payment Advisory Commission (MedPAC) has expressed concern that since for some duals and their families it takes many years to develop the right set of relationships with doctors and hospitals to facilitate the delivery of their treatment, that a shift to a managed care plan could cut off that care with dangerous consequences.

At a House Ways and Means Health Subcommittee hearing earlier this spring, MedPAC Chairman Glenn Hackbarth, anxious to assure the long term success of the demo, urged lawmakers to scale it back to a few states, to better learn how to manage care of the duals without causing them harm.

Keeping It Big, Moving It Slow

If lawmakers thought the hearing would be sufficient to pressure CMS to scale back the demo, they were disappointed. Bella sought to reassure the health community that duals would have free choice over whether to enroll in a managed care plan in the demo or stay in traditional Medicare.

She also explained why federal officials have stuck to their guns despite the pressure to back off.

"The leadership of CMS and the leadership of HHS—Secretary [Kathleen] Sebelius on down—is fully committed to these demonstrations,'' Bella said. "I mean the secretary having been a governor [of Kansas] faced much of the frustration that the states do in terms of really wanting to get solutions to this issue. So she's been on board since day one. Actually, well before day one.

"We've gotten a lot of concern over the size and the speed," she acknowledged, but "we've only approved one." The fact that 25 states have applied for the demo "means nothing about what CMS is approving."

Bella added that "it may be that not all states go forward." And when states do launch programs, their start dates will be spread out over two years.

Massachusetts, the first state, doesn't start until April of 2013 and California, which may be the next state approved, wouldn't start until June.

But clearly there are big obstacles to overcome. CMS is allowing states to request "passive enrollment," which means they can assign a dual to a managed care plan. The dual could then choose to opt out. This approach is thought likely to shift more duals into managed care plans than if duals had to "opt in."

CMS will require that beneficiaries get notification letters at least two months before the passive assignment explaining the new program and what their enrollment options are.

But that's likely to generate many, many questions, considerable confusion and anxiety, and require much individual counseling of duals or their families to help them decide what to do.

Bella acknowledged that "we had an opportunity about a week or so ago to field test some of our letters" in Massachusetts. "And let me say I think we failed miserably. Basically, all our feedback was 'We do not understand. Who is Medicare? We have MassHealth. What is Medicaid?' And all sorts of other things, like 'why are you sending me this letter in this envelope?' All of the stuff that you would expect, but it's a good exercise for us to go through.

"I just want to reinforce the importance that were placing on having a network of resources available to help beneficiaries understand choices," she added. CMS is pushing states to require the use of independent enrollment brokers and "choice counselors" to walk duals and their families through the options.

"We made funding available for the aging and disability resource centers and for the senior health insurance programs" to help with counseling,'' Bella said. "And then we will be working with advocacy organizations at a national level and each of the states on how we make sure that the messaging is clear."

CMS also is denying requests from states to "lock in" duals into managed care plans and keep them from leaving right away once they are enrolled.

In response to concerns about moving too quickly to learn from mistakes, CMS is requiring rigorous evaluation of the programs that includes the use of comparison groups to test how well a particular approach is working. "We have every reason in the world to have as rigorous an evaluation as possible because we don't these to just be demonstration in perpetuity," Bella said.

"This is hard," Bella concluded. "And these are complex issues. And you can't go at lightning speed. And so our commitment is to show that we are diligently and thoroughly working through these issues."

Capitol Hill, to say nothing of the health industry widely, will be watching.

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