As I discussed in my October 31, 2011 entry, Connecticut is moving toward a new model of health care delivery for people on Medicare who also qualify for Medicaid because of their low incomes: the so-called  “dual eligibles.”  That plan is moving forward, but will be more consumer friendly thanks to coordinated advocacy spearheaded by New Haven Legal Assistance Association (NHLAA).

In December of 2010, the Department of Social Services (DSS) proposed a system of coordinated care for dual eligibles.  Everyone agrees that Medicare and Medicaid coverage should be better coordinated.  However, DSS intended to ask for a grant from the federal Medicare/Medicaid agency to integrate these programs under a “capitated” model: groups of providers, rather than insurers, would be paid a fixed amount of money per person per month to provide all health care covered under either program.   Paying providers a capped “per head” fee each month –instead of paying them for each service - can be problematic. If the doctor bears the cost  of a particular service  he or she may be less likely to prescribe, or support a prescription for, needed  treatment or a more appropriate, more expensive treatment. And low income people  can not  pay for services blocked by their providers. 

NHLAA organized a coalition of concerned advocates to oppose this aspect of the proposal. NHLAA educated advocates and consumers, who voiced their concerns at meetings with DSS. Advocates and consumers urged providers to weigh in against that part of the proposal tool. As a result, DSS’ final proposal in February 2011 did not have “capitation” but instead would pay all providers who form “integrated care organizations” on a fee for service basis. Connecticut then became one of 15 states in the country to receive a planning grant for integration of dual eligibles’ health care.   

Unfortunately, DSS’ new proposal still had a problem: providers who produce savings overall on their Medicare/Medicaid patients were to receive a share of those savings. Depending upon how these savings are measured, shared savings could also create financial incentives to deny care, as with capitation.

Over the last few months, DSS fleshed out its proposal for dual eligibles. It backed away from the formal “integrated care organization” concept in favor of a “health neighborhood” concept. Yet, DSS still included the shared savings component in its evolving proposal, to encourage providers to “economize.”  It proposed that providers not receive shared savings unless they also did well on certain quality measures. But it also proposed that providers who did exceptionally well on quality measures would still not receive any incentive payments unless they also saved money on their patients.      

As a member of the Complex Care Subcommittee of the Medical Assistance Program Advisory Committee (MAPOC) - which was charged with reviewing and advising on this proposal - I raised concerns about such an incentive system.   

DSS representatives argued that providers would economize by avoiding unnecessary treatments which should be discouraged anyway, such as hospital emergency department visits and re-hospitalizations. However, their proposal was not so limited: neighborhoods of providers would share in savings on their patients no matter how those savings were generated. They could as well be obtained by denying access to appropriate home care services, physical therapy or diagnostic tests, as they could by reducing ER visits. 

Other advocates on the subcommittee shared these concerns. Providers’ representatives expressed concerns about providers’ unwillingness to participate in a model that did not reward them for performing well on quality measures – which performance requires investments – unless they also saved money.

I signed a letter with 17 other advocacy organizations urging that any shared savings for this model be based on quality measures, not on savings by providers on their particular patients, to avoid these problematic financial incentives.  However, not all members of the MAPOC subcommittee agreed with this position. 

After several discussions, I proposed a compromise: shared savings would be distributed during the first year based solely on performance on quality measures. In years 2 and 3, neighborhoods of providers would be paid more if they also saved money on their patients, but well-performing neighborhoods would still receive some payments based on that performance even if no money was saved.  There would still be an incentive to “economize” but it would be muted in favor of recognizing quality.  This compromise was embraced by the subcommittee, which recommended that the full MAPOC approve DSS’ plan conditioned on incorporating this compromise.

On April 24, DSS produced its final plan for dual eligibles for public comment.  The subcommittee’s compromise was not in that plan.  At its next meeting, the subcommittee reaffirmed its commitment to the compromise. At the next full MAPOC meeting, it formally approved the DSS plan subject to incorporation of the subcommittee’s shared savings compromise.             

On May 25, NHLAA and 16 other organizations submitted formal comments urging DSS to modify the shared savings proposal as recommended, and to make other consumer-friendly changes.  Although we have not yet seen the final proposal, DSS representatives indicated that they are changing it to reflect the consensus recommendation.

It appears that DSS will be moving forward with a model which holds the promise of both coordinating and improving care. This model rewards providers for improving quality and provides some additional incentives to save money.  Continued vigilance is necessary, but this compromise may offer a way forward to better-coordinated care and better heath outcomes for low-income health consumers.