Nonprofits benefit from soaring Medicaid costs in New York

It is always instructive to look at how other states provide services to people with developmental disabilities. At the very least, we may learn what not to do.The New York Times has been investigating the crisis-in-care for people with developmental disabilities in New York and has come across some eye-opening discoveries on how Medicaid money is spent.

This article, Aiding Disabled, Nonprofits Rake in State Money by Russ Buettner, is one of the latest in a series. Community Habilitation is a state home care program that provides Medicaid Home and Community Based Services to people with DD. (Michigan's DD waiver services fall under the Habilitation Supports Waiver. Waiver services can vary from state to state.) According to the article, spending for this program has increased more than 40% over the past three years with much of the benefit going to the nonprofits who provide the services.

In New York, providers determine the services through an individualized plan and are reimbursed on a fee-for-service basis, with the fee negotiated with the state. Over all, providers are reimbursed about $40 per hour to pay for a program with little overhead. Workers, who provide the services in the homes of consumers, are paid only an average of $10 - $15 per hour. Medicare provides similar services to senior citizens, but the median reimbursement rate is $21 per hour.

The nonprofits are the proverbial foxes-guarding-the-hen-house and are apparently using the extra Medicaid dollars to pad executive salaries and build up reserves in their organizations. The state is considering doing away with the fee-for-service reimbursements and revising its incentive system to focus more on quality than quantity of services.

Here is a description of other financial shenanigans by nonprofits in New York.

Media coverage lacking on Michigan's dual eligibles proposal

Here is an article from Domemagazine.com by John Lindstrom on the state's project to integrate "dual eligibles". These are people who are eligible for both Medicare and Medicaid which makes them elderly and poor, developmentally disabled and poor, mentally ill and poor, or some combination of all of the above. The plan would place their care under a single entity that would manage and finance their medical care, mental health care, and long term care. 

Lindstrom points out this issue has tremendous import on the lives of the over 200,000 people affected, but it is receiving almost no coverage in the media. The state was surprised by the reaction it has received from critics. Despite the government's assurance that services will not be taken away and that the state's intent is to improve patient care while decreasing costs, the critics don't believe it.

In addition to the lack of coverage of this issue, despite the large number of people who would be affected by it, the subject is difficult to talk about. It is complex and encumbered by impenetrable jargon. 

At least one reporter is attempting to make sense of this:

"What is indisputable though is the genuine worry by recipients and their families that their care will be dramatically and drastically affected by whatever changes are made. The changes the state makes wouldn’t amount to a set of inconveniences. Those changes could trigger a massive change of life for some of these recipients."

Testimony on Dual Eligibles

December 6, 2011 
Jill R. Barker
Ann Arbor, MI    
  

To the Michigan House Appropriations Subcommittee on Community Health

I am the parent of two adult sons with severe developmental disabilities, including severe cerebral palsy and profound intellectual disabilities. I am also president of Friends of the Developmentally Disabled, a Washtenaw County group that provides support and information to families and friends of people with developmental disabilities. Friends of DD is part of ddAdvocates of Michigan, an Internet-based communication network with families and community groups all over the state.

I have strong reservations about Michigan’s proposal to integrate dual eligibles. The lack of consideration for populations whose services are currently managed by the Community Mental Health system could lead to disastrous outcomes. Other state’s have taken a less radical approach to integrating dual eligibles with plans that cause much less disruption to current service arrangements than Michigan’s proposal.

Habilitative mental health services for people with developmental disabilities are non-traditional Medicaid services designed as an alternative to hospitalization or institutionalization. These services can include housing in either licensed or unlicensed settings with varying degrees of support and many specialized services that maintain health, ensure survival, and lead to fulfilling lives in community settings. For people like my sons this care is both necessary and costly.

In the State Proposal that was submitted to the Centers for Medicare and Medicaid last February, the phrase “developmental disabilities” does not appear in the 10-page document. The assumption is that people with DD will be subsumed under Long Term Care that includes senior citizens over the age of 65, a much larger group whose needs are chronically and often tragically underfunded. Combining these populations together and expecting to reduce costs without eliminating services for people with DD and others served by the CMH system is simply not believable.

Where are the savings going to come from, if not from the elimination of services? The Community Mental Health System, though always in need of improvement, already has a managed care system in place for Medicaid-funded specialty services and has done well keeping Medicaid costs under control. Why remove CMH agencies as the managing entity for these special populations and replace them with Medicaid managed-care health plans that have little experience with these populations, especially people with developmental disabilities under 65 years old? 

Up to one-third of the people served by the CMH system are dual eligibles and account for up to half the costs of the CMH system. What will be the effects on the CMH system for people who opt out of the state plan and others left in the system? Will it be able to sustain itself under these circumstances and will the expertise and specialization of its employees be unnecessarily lost under this plan?

I worry especially about the loss of local control of decision-making under the state’s proposal. The lack of transparency and accountability of managing entities that have no obligation to include consumers on their governing boards will surely have an effect on the vital role that families now play in assuring the provision of mental health services for their loved-ones. Through their persistence and advocacy, parents and other family members fill in gaps in the service system that allow their DD family members to maintain their health and engage in a meaningful life. Families monitor the care of their loved-ones and establish networks that pass on an enormous wealth of information to people facing problems similar to their own. Relationships with CMH and other community agencies that are fostered by families, can be a check on the service system, making sure that local decisions reflect local priorities and needs, while preventing waste in the system. Most of this is done at no cost to the state. When agencies that local families have to deal with are more remote and less accountable, families become discouraged and their desire and ability to support and improve the system of care is diminished.

In my experience, the most creative solutions to increasing the quality of care without increasing costs to taxpayers comes from local family groups that have marshaled support from local community organizations including churches. For example, in Washtenaw County, the parent-directed Just Us Club serves more than 50 families with a licensed after school childcare program and an activity and respite program for adults with moderate to severe developmental disabilities. Space for the programs is donated by the Washtenaw Intermediate School District and Huron Hills Church in Ann Arbor. Fees to families are kept to a minimum by the parent Board of Directors. Intentional Communities of Washtenaw has been setting up residences for higher functioning adults using “community builders” to assure that DD adults stay engaged in the community with their friends and families. His Eye is on the Sparrow runs a supported living house in Dexter, Michigan, relying on volunteers and families as well as funding through the Community Mental Health agency. Harbor House in Ottawa County for severely disabled adults and many group homes in western Michigan are highly praised by parents and their communities. Encouraging these organizations and following their examples, leads to a higher quality of life for the people they serve.

Congress forgets how to pass a law

Revisiting Federal regulations on the use of Medicaid Waivers

Last April, the federal Centers for Medicare and Medicaid Services (CMS) proposed regulations that would restrict the use of Home and Community Based Service Waivers (this includes the Habilitation Supports Waiver for people with developmental disabilities in Michigan) to "prevent the provision of unnecessary or inappropriate care". The proposed regulations would effectively eliminate funding for Home and Community Based Services for many forms of congregate care for people with disabilities or for specialized services provided in group settings for people with specific disabilities. (See my blogposts from May and June 2011 for comments on specific issues raised by the proposed rules.)

There was a huge response to the proposed rules, both pro and con. Final rules have not yet been released by CMS.

According to an article in Disability Scoop, almost a hundred advocacy groups are demanding that CMS release the restrictive rules. CMS says there is no final date for publication of the rules, but they are a priority.

The proposed rules would limit the use of Medicaid Home and Community Based Services waivers to only those settings and services found acceptable by disability advocates who promote an ideology of full inclusion for everyone, regardless of the needs of the disabled person or the wishes of the individual and his or her family. The advocacy groups are aggressively pursuing a course that places them at odds with a significant segment of the population they presume to represent. This is a good time to remind CMS of how these restrictive regulations would affect your family member. 

Contacts at Centers for Medicare and Medicaid Services:

There is a new acting director of CMS, Marilyn Tavenner. Her e-mail address is Marilyn.Tavenner@cms.hhs.gov .

Cindy Mann, Director, Center for Medicaid, CHIP, and Survey & Certification, can be contacted at Cynthia.Mann@cms.hhs.gov

Henry Claypool is Director of the Health and Human Services Office on Disability. His e-mail is ODInfo@hhs.gov .

Refer to HCBS rules CMS-2296-P in the subject line of the e-mail.

Here is the letter sent by the National Disability Leadership Alliance.

More information on Michigan Dual Eligibles workgroups

The "Integrating care for dual eligibles in Michigan" Website has more information on the four workgroups that are making recommendations to the state. Rosters for each group are available along with meeting times and dates, agendas, summaries of meetings, and additional documents and information.

I have been participating in the Workgroup on "Education, Outreach, and Enrollee Protections". It is hard to tell if  the workgroups will have much of an impact on the state. The Michigan Department of Community Health has set limits on the topics that are covered by the workgroups, placing the most controversial aspects of the state's plan for dual eligibles out of bounds for discussion: whether Medicaid managed-care plans are the best entities to manage and finance services for dual eligibles, whether allowing consumers to opt-in rather than opt-out of the plan is a better idea, and whether the plan as it has so far been described by the state is worth the partial destruction of the Community Mental Health system. 

Other metaphorical elephants in the room: the issue of local control and access that is one feature of the Community Mental Health system that would likely be lost; citizen representation of people directly served by and affected by the system of care that exists in the CMH system but is lacking in the dual eligibles plan; a lack of transparency and access to Medicaid managed-care plans that appear to be the most likely entities to manage services for dual eligibles; managing costs of health plans that pay exorbitant executive salaries; the effects of privatizing mental health services for dual eligibles - an idea that was soundly defeated in the state more than a decade ago; rivalries between groups affected by the plan; different federal mandates for different groups of beneficiaries; and expecting to save money by combining several under-funded groups and transferring funds from a CMH system that has been successful at holding down Medicaid costs to another system that has little experience serving the populations served by CMH.

At the end of each Workgroup meeting there is a time for public comment. The Workgroups meet again on December 13 and 15 in Lansing. After that, the state will put together its plan and release it for public comment. This will be the first time that we see in detail what the state intends to submit to the Centers for Medicare and Medicaid for integrating care of dual eligibles and your comments on the plan will be important.

For background on the dual eligibles plan, see the DD News blog here.

Legislative hearings on Dual Eligibles

To review this confusing topic, see other posts on Michigan's plan to manage and finance medical and specialty services (mental health services for people with mental illness and developmental disabilities) for people who are eligible for both Medicaid and Medicare. 

Subcommittee Hearings:

Appropriations Subcommittees are looking at the possible affects of the Michigan "Integrating Care for Dual Eligibles" plan on appropriations and the state budget.

 
The following are recommendations from Tom Bird of ddAdvocates of Michigan of things to consider if you want to testify:

If you can attend and testify, the emphasis should be on financial impact: 

• How this will effect those who choose to "opt out" if there is no workable CMH delivery system left (should the "money follow the person"?)
• What will happen if the new plan isn't financially feasable? Will services to the most vulnerable be cut, or will "the most needy" be protected?
• If the anticipated (pipe-dream) savings do not occur, will the plan continue, anyway? Who will pay the bill?
• What if the Fed Government doesn't have the money to pay for the 400,000-800,000 new Medicaid enrollees? Do we dis-enroll them, or will services to all be dilluted?
• What if it actually winds up costing more, not less (as is the experience in Mass and Texas)?
• What negative impact on services would the proposed "savings sharing" plan have as a dis-incentive to provide the best array of services? (restrict services to pocket the profits)

You may also choose to discuss ways for the system to save money, such as eliminating the PIHP layer of administrative overhead; normalizing provider contracts and reimbursement rates across CMHs and for comparable service delivery. Recognizing the cost effectiveness of multi-bed settings for those who choose them.

Times and locations of hearings:

House Appropriations Subcommittee on Community Health

Tuesday, December 6, 2011 at 10:30 AM
State Capitol, 3rd floor, Room 352
Agenda: Public testimony on Integrated Care Planning for Dual Eligibles

If you wish to testify, fill out a card before the hearing. Bring enough copies of written testimony for all subcommittee members.
Clerk Phone Number: 517-373-8080
Chair: Representative Matt Lori
Other members: MacGregor (Maj. VC), Agema, Genetski, Tlaib (Min. VC), Bauer

Senate Appropriations Committee Subcommittee on Community Health Department
Chair: John Moolenaar

Thursday, December 8, 2011 at 12:30 PM
Location: Boji Tower, 124 W. Allegan Street, Lansing, MI
Clerk Phone Number: (517) 373-2768
Agenda: Presentation on the impact of the proposed Dual Eligible Waiver on the Department of Community Health Budget

The clerk for the Subcommittee said that a number of groups are lined up to testify and time is limited.