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State Medicaid Leaders See Challenges in Covering the Dual Eligibles

By Rebecca Adams, CQ HealthBeat Associate Editor

May 30, 2013 -- State Medicaid officials last week questioned whether the national experiment to find a better way to coordinate care for people eligible for Medicare and Medicaid will be worth the effort and time the pilot program is taking.

The state leaders also talked about their concerns over implementing the health care law and dealing with a shortage of primary care doctors willing to accept Medicaid patients. The handful of Medicaid directors and other officials—from the District of Columbia, Kansas, Maine, Massachusetts and West Virginia—spoke about their concerns at the National Medicaid Congress in Washington.

Most of the state Medicaid officials said more needs to be done to coordinate care for beneficiaries who receive both Medicare and Medicaid—the group of people known as "dual eligibles." But several said they were relieved that federal officials had denied their requests to be part of a national experiment to move those patients into managed care plans.

The managed care demonstration project was announced in 2011. Initially, 26 states asked to participate. So far, six have been approved.
Massachusetts is the first state approved to start its demonstration. Robin Callahan, Massachusetts deputy Medicaid director for policy and programs, told the audience that in the two decades she has been involved in Medicaid policy, on the scale of challenges, the demonstration is "very, very high up there.

"We hope we can pull this off but as you probably know, these duals demos have been difficult to launch," she said. The challenges include negotiating the details, including rates, with all of the providers; ensuring adequate benefits, including mental health services; and anticipating the needs of patients who need complex care.

But the officials also said the current fee-for-service system for the 10.2 million people who receive coverage under Medicare and Medicaid needs fixing, and more coordinated care is necessary.

Fee-for-service, or FFS, should be known as "fend for self," said Nancy Atkins, the Medicaid commissioner in West Virginia.

Izanne Leonard-Haak, a former Medicaid official in Pennsylvania, said that the state had a tortured history of shifting dually eligible patients into managed care and back out again. In 1997, the state tried managed care for dually eligible people but in decided in 2006, as the Medicare Part D program was being implemented, that the structure was too complicated.

"Pennsylvania is still struggling with where to go with our duals," she said.

Some officials said that states should not count on saving a lot of money by coordinating care for the dually eligible patients.

"Sometimes it's going to cost a little more on the front end before you see a decrease in avoidable hospitalizations and so forth," said Linda Elam, Medicaid deputy director in the District of Columbia.

Atkins said West Virginia had not been approved by the Centers for Medicare and Medicaid Services (CMS) to participate.

"Actually I'm glad because when I talk to some of the other Medicaid directors, it's a very heavy lift," she said. Kansas Director of Medicaid Services Susan Mosier also said it would have been too much work if her state's application had been accepted, in part because of the demands of scrambling to finish implementing the health care law (PL 111-148, PL 111-152).

Callahan said that in Massachusetts, the state whose health program the federal overhaul is modeled on, local officials have fewer changes to make than some states. But they are still concerned about implementation, particularly about whether the rules and updates they've put in place to implement the law will pass muster with CMS officials who will decide whether to approve them.

"We're not really sure all those rules are finally going to be accepted because many of them are a matter of our interpretation," she said. "I think we're kind of holding our breath that there won't be any major hiccups" or changes required by CMS, because "certain things will be pretty hard for us to change quickly."

Even after states start the process of enrolling new beneficiaries in Medicaid and the new health insurance marketplaces starting in October, some state officials are worried that the biggest problems could come months later when patients start trying to get care.
One big issue in most states is the lack of primary care providers who will agree to care for Medicaid patients.

Washington, D.C., officials decided to increase pay for primary care doctors in April 2009, said Elam. The government increased Medicaid payments to be the same as in Medicare, compared to previous rates that were 60 percent of Medicare on average. In later years, the government had to decrease the rates to 80 percent of Medicare rates because of the recession, she said.

"We didn't see a great influx of providers with that increase," she said.

The health care law called for similar changes in 2013 and 2014 for Medicaid primary care providers, although the higher rates have not yet been implemented in most states.

"I don't know how that translates into the national experience, but we did not see an influx," said Elam.

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