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 Trend for More Medicaid Managed Care in the Offing, Expert Says

As the Centers for Medicare & Medicaid Services (CMS) continues to tweak the way Medicaid managed care works at the federal level, a leading expert in the field says long term and post-acute care providers should know the trend for states to utilize managed care organizations (MCOs) for Long Term Services and Supports (LTSS) populations remains red hot.

Cristal Gary, principal, Leavitt Partners, tells Provider “definitely, the trend indicates that the Medicaid system is going to move to a more managed system. And that is going to include managed LTSS.” Around half the states have a managed Medicaid system in some fashion, with two more—Arkansas and North Carolina—adding to the ranks in 2019.

“And, even states that have managed care programs are increasingly looking to carve more populations into them, and LTSS is a major cost driver in the Medicaid program,” she says.

This attention to LTSS had a little bit of reprieve over the last couple of years as most of the focus has been on the Affordable Care Act expansion population, but states are refocusing on LTSS as it remains a higher-cost subset of Medicaid.

“The pendulum will likely swing back, and people are going to be looking at how do you really get to targeted interventions that will help bend the cost curve in that LTSS population,” Gary says.

For providers, the expectation should be that more and more of their interactions with Medicaid and the reimbursement structure will be via relationships with MCOs.

“Providers definitely need to be expecting that and thinking about what that means for their business models and how to adapt to it,” she says. Even if the MCOs have not generated a positive reputation in some areas, Gary says managed Medicaid is not something to fear and actually, if done correctly, encompasses more than just managing payments.

“We are starting to see more and more states start to look at managed care through the value-based care lens and start to think about how they can better manage their Medicaid managed care programs toward value,” she says. “This means trying to build more quality metrics and value-based payment into their managed care system.”

As with the case in Medicare and value-based care arrangements like accountable care organizations, it will benefit those providers in the LTSS sector who can prove to MCOs their ability to deliver positive outcomes in an efficient, low-cost environment, Gary says.

“The challenge is that there is really no common or obvious definition of value in the long term care context. It is very different from acute care. I think that is the next thing states and managed care companies are going to have to tackle, and CMS as well, by addressing what outcomes do we need to look at and what do we mean by value in these complex populations,” she says.

To prepare for more extensive Medicaid managed care, Gary recommends skilled nursing providers to continue their focus on quality of care, specifically on preventable hospitalizations and transitions of care. “So, identifying and developing those partnerships better and having more efficient processes for doing the hand-offs is part of this,” she says.

The business model for providers should recalibrate to be able to show their value proposition to the managed care company and be able to say, “What we are really good at now is rehabilitation and getting people back to their homes or community,” or, “We are really good at managing this particular type of person who may have just been at an acute institutional level of care.”

Despite the reality and perception that the skilled nursing or other institutional setting is out of favor with MCOs and/or policymakers, Gary says the reality is that there is always going to be a percentage of the population that needs long term care and is not going to get better.

“It is really about understanding your population for the nursing home and the long term care provider,” she says. This means being able to understand the population in the facility and in the broader geographic area.

Providers should be looking at the trends and what is likely to happen over the next few years, Gary says. They should be thinking, “What percentage of my beds will be my baseline, my kind of staying-put population, and then how can I set myself and my staff up for transitions that might be shorter lengths of stay that can really show value? This is a stronger position to be in to get managed care contracts.”

Against this backdrop of the trend for more managed care and more value-based care, Gary admits there is scant evidence the models have met their goals to reduce costs and bring more coordinated, efficient care.

“We have seen some studies and results that have been kind of mixed depending on what you are looking for and what your time horizon is,” she says. “As far as looking at outcomes of managed care, I am not aware of anything that has looked at LTSS managed care.”

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