California Pilot Offers Caveats For Moving ‘Dual Eligibles’ To Managed Care

As federal officials evaluate state proposals to move millions of the nation’s poorest and sickest individuals into managed care plans, they might consider a recent report from the California HealthCare Foundation.

Photo by Calsidyrose via Flickr

The report analyzed California’s year-long transition of 240,000 low-income seniors and people with disabilities from fee-for-service plans into managed care as part of a federally approved demonstration project. Beneficiaries had to pick a managed care plan, or the state assigned one to them.

Despite efforts by state and health plan officials to smooth the transition, caregivers and others reported “the managed care system … was not prepared” to care for the population’s specific needs, which include complex cases involving mental illness, homelessness and developmental disabilities, the report said.

The beneficiaries are enrolled in California’s Medicaid program Medi-Cal, and most are non-elderly people with disabilities who will qualify for Medicare coverage as well once they finish a two-year waiting period, said Christopher Perrone, deputy director of the California HealthCare Foundation’s Health Reform and Public Program’s Initiative.

Perrone notes that California state officials, health plans and others involved in the waiver program made “enormous effort” to develop the initiative. Nonetheless, the report noted several problems, including:

  • Beneficiaries “experienced anxiety due to confusion and concern over whether or not they would still be able to see their current primary care physician, specialists and mental health providers” as well as those who provided their prescriptions and medical equipment, according to providers, advocates and others who had contact with them.
  • Many had trouble understanding the complex written materials they received, and fewer than half of the health plans offered individual counseling or support to beneficiaries by telephone.
  • While most health plans reported that they trained staff to work with beneficiaries to provide “information, support and care coordination,” stakeholders said this service should have been offered earlier in the transition period to managed care, rather than once beneficiaries were enrolled in a plan and needed medical care.
  • Health plans reported out-of-date contact information for many beneficiaries, and said they had difficulty recruiting fee-for-service providers to their networks.

The report about California’s experience comes as the U.S. Centers for Medicare and Medicaid Services (CMS) is ramping up plans to move many of the nation’s 9 million “dual eligibles,” who qualify for both Medicaid and Medicare, into managed care plans. Coordinatnig their care is important because it’s so costly: They are the nation’s poorest and sickest people, accounting for approximately 20 percent of Medicare’s beneficiaries, for instance, but 31 percent of its spending, and 15 percent of Medicaid beneficiaries, but nearly 40 percent of that program’s spending, according to federal officials.

The 2010 health law created the Federal Coordinated Health Care Office to oversee demonstration projects to find better care models. Twenty-six states – including California — have submitted proposals.

The Medicare Payment Advisory Commission and Sen. Jay Rockefeller, D-W.Va., among others, have criticized CMS for moving too quickly . CMS has said it is “implementing important reforms that will improve care for these millions of Americans” and that is recognizes “how critical it is to have beneficiary protections in place to achieve the highest-quality health care possible.”

Perrone said that good communication with providers, beneficiaries and their advocates is critical when moving duals to managed care.

“Once you have the policy set, you have to make sure there is sufficient time to reach out to the provider community, to convey what those policies are and what the transition means to them,” he said. “What we heard again and again from those who were surveyed for this study was that a much more extensive and personal education and outreach strategy was needed.”