Editor’s Desk

Medicaid Managed Care Braces for New Regulations

Frank Diamond
Managing Editor

New regulations for managed Medicaid promise to shake up an industry that, apparently, needs very much to be shaken up. The implications of last week’s Kaiser Family Foundation (KFF) report on the state of nursing homes (hint: not so good) builds even more anticipation about CMS’ plan to unveil the regulations any day now.

The regulations were last updated in 2002, when the issue of the quality of long-term care did not loom over society like the Death Star. To paraphrase Lincoln, we cannot escape history, or demographics. CMS, for the first time, wants to regulate long-term care delivered by managed Medicaid.

Elderly Adults As a Share of the U.S. Population, 2000 to 2050

Source: Congressional Budget Office tabulations based on population projections reported in The 2012 Long-Term Budget Outlook (June 2012), www.cbo.gov/publication/43288.

Members of the baby-boom generation (people born between 1946 and 1964) started turning 65 in 2011 and will turn 85 beginning in 2031.

But not just that. It’s difficult to underestimate the scope of what CMS wants to do: A March KFF report shows just how huge of an overhaul is coming.

The part of the proposed regulations that addresses long-term care alone “could be the size of a regular reg,” says Jeff Myers, president and CEO of the Medicaid Health Plans of America (MHPA). MHPA represents 124 commercial and not-for-profit Medicaid plans that serve over 20 million lives in 33 states.

In 2002, managed care was not the presence in Medicaid that it is today. Now, according to KFF, “over half of all Medicaid beneficiaries—primarily children and parents—are enrolled in these plans.” The ACA has also encouraged an influx of single adults onto the Medicaid rolls, most of whom have choosen a managed care plan.

Myers tells Managed Care that nursing homes and other post-acute care still live in FFS territory. He should know: Before joining MHPA, Myers served as the senior vice president of policy and government relations at the American Health Care Association, the lobbying group for post-acute care facilities.

The KFF nursing home study notes that more than a third of those facilities, representing nearly 40% of all nursing home residents, received only one or two stars on the CMS’ Five-Star Quality Rating System for nursing homes this year. That’s the yin. The yang is that 45% of nursing homes, representing 41% of all nursing home residents, got four or five stars.

“There are 11 states where 40% of the nursing homes are frankly failing,” says Myers. “I understand how hard their job is. But I also understand that states and CMS would like to see significant quality. Care coordination, like the kinds of things our plans will do, are a way to drive quality that clearly has not happened in the last five years in the post-acute care space.”

Health plans are used to dealing with hospitals “where theoretically the hospitals share some risk in the outcomes for the patient,” says Myers. “In the post-acute care setting, particularly in the SNFs [skilled nursing facilities], there’s very little risk sharing that drives quality improvement. It would not surprise me if CMS is looking at the kind of managed effort a large plan can provide in this space to start driving quality.”