Exploring Long-Term Care Options in Minnesota: Improving Care for Duals

1. “Long-Term Care: Exploring the Possibilities”The Minnesota Experience : One Model for States to Improve Care, Align Incentives and Rationalize Spending for Duals Mary Kennedy Former, Minnesota Medicaid Director Director of Medicare Programs ACAP

2. Health Coverage for Duals Dominant (non)system Integrated Care Model Care manager acts as the concierge or navigator within a plan that covers all services across Medicare and Medicaid and acute and long term care Plan ideally provides: Assessment of need and individualized, chronic care plan One ID, consolidated notices, appeals and grievances • Consumer acts as “general contractor” to manage these pieces: • Medicare FFS • Medicare Part D • Medicare Supplement or payment of cost sharing by states • Medicaid Acute Care (FFS or in a plan ) • Medicaid LTC or HCBS • Mental Health • Medicaid drugs

3. Coordination of the Medicare and Medicaid Benefit: State Relationships • Formal relationships vary widely • States tend to exclude duals from Medicaid managed care • Most states are just beginning to formalize the most basic Medicare cost- sharing relationships with plans • Even the “demo states” exclude some duals and continue to refine their models. Yes, but….

4. Policy Advantages of Using a Fully Integrated Model for Dual Eligibles Are Compelling • Well-designed integrated care models should improve dual eligibles’ clinical outcomes relative to the unmanaged fee-for-service setting • A recent Wennberg study from Dartmouth indicates that nearly 1/3 of spending on chronically ill populations is unnecessary, and that improving care would likely lower costs • Large-scale savings are available • Mis-aligned incentives lead to cost shifting between Medicaid and Medicare and premature/inappropriate use of nursing homes • New study from the Lewin Group co-funded by Medicaid Health Plans of America and the Association for Community Affiliated Health Plans estimates nationwide and state-by-state potential savings at $50 billion 2010-2014 if dual eligibles were served in a fully integrated capitated setting.

5. Potential Savings If All States Coordinated Care Like the “Best in Class” • 2010-2014 • $50 billion • 2015-2019 • An additional $96 billion • 2019-2024 • An additional $155 billion • GRAND TOTAL ACROSS 15 year Period Exceeds $300 Billion

6. Several Factors Limit Use of Capitation Comprehensive benefits in FFS setting for dual eligibles; presumption that FFS works in client interest Lack of strong state, consistent leadership with an understanding of how poor chronic care management leads to premature/inappropriate use of institutional care Absence of clear Medicaid policy on dual integration; voluntary enrollment on primary payer (Medicare) side Inability for states to share in early savings Early year cost savings typically accrue only to Medicare, with states not earning Medicaid savings until out-years However, states determine whether capitated programs for duals are developed and implemented State staff for planning are diverted to immediate budget crisis .

7. Yet some states have gone ahead… • Minnesota’s efforts were focused on better care management and diversion from inappropriate nursing home care • Demonstration status allowed Medicare “frailty” payments similar to PACE • Built on existing managed care infrastructure; flexible, evolving models • Managed care initiative supported by strong HCBS services and “rebalancing” mindset

8. Integrated Models in Minnesota for Seniors • Mandatory statewide Medicaid managed care program since 1985: • PMAP/Minnesota Care: DHS contracts with 9 local non profit HMOs/CBPs to provide services to about 447,000 families, non-disabled adults and children • Minnesota Senior Care Plus (MSC+): Most Medicaid seniors 65+ including dual eligible enrollees and NF residents required to enroll since 1985. Includes LTC services of PCA, home and community based and 180 days of nursing home services • Voluntary statewide integrated Medicare/Medicaid SNP programs • Minnesota Senior Health Options (MSHO): Began 1997, 83 counties, includes LTC services, contracts with 9 dual SNPs

9. Minnesota Integrated Models: Persons with Disabilities • Minnesota Disability Health Options (MnDHO) • Voluntary model began 2001 • Integrated Medicare/Medicaid includes LTC services, • Enrolls people with physical disabilities • 1 Special Needs Plan • Available in 7 county metro MSP area only • Special Needs Basic Choice • Voluntary model began 2008, • Integrated Medicare/Medicaid for all people with disabilities, • does NOT include PCA and most home and community based services, • 83 counties, contracts with 7 SNPs

10. Results of Integrated Programs in Minnesota • Several evaluations of managed care for seniors prior to MSHO expansion show some positive utilization results, no harm being done • MSHO showed increased access to HCBS, increased caregiver support, and reductions in expected use of nursing home • MSHO satisfaction higher than MSC, low disenrollment • Care coordination studies of MSHO show value to members in a variety of care coordination models • MSHO costs have been under control

11. Policy Issue: Achieving Significant Program Scale • Lewin model assumes all full dual populations are mandatorily enrolled for all acute and long term care services across both Medicare and Medicaid services • “Opt-out options” are more politically feasible than mandatory approaches; have worked well in some states • Phase-in of populations may allow more movement towards integrated care and time to develop appropriate care management models • Phase-in or carve-out of LTC services, especially some specialized home and community-based services, may be appropriate in some states • “Demo” states worked through issues for years Savings and care management opportunities are compelling even when the approach is scaled back

12. Policy Issue: Incentives for States • For states to prioritize pursuing these programs, they need access to part of the overall savings • States are unlikely to “invest” in capitated model for 5 years before realizing savings on duals alone • Creative arrangement with CMS (e.g. 50/50 sharing of overall savings between state and federal government) is likely needed to spur significant growth of capitation • Grants that cover start up costs to develop rates, contracts, beneficiary education would help

13. Federal Reform Needed to Promote Integration • Federal oversight and accountability for the cost, quality and access of dual eligibles • Long-term reauthorization of SNP authority • Payment appropriate to the risk of the member • Incentives for states to increase integrated care for dual eligibles

14. Contact Info Mary Kennedy, ACAP Director for Medicare Programs Phone: 202.701.4749 Email: mkennedy@communityplans.net www.communityplans.net Pamela Parker Special Needs Purchasing Minnesota Department of Human Services Email: pam.parker@state.mn.us