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Managed Care Plans are taking over Medicaid Long-Term Care

More states are turning to managed-care companies to oversee populations in need of long-term care. States are increasingly turning to private firms to provide managed long-term supports and services (MLTSS). Their goal is to rein in costs and increase budget predictability.

Proponents say it enables delivery of more coordinated care and prevents sending people to expensive nursing home settings. But advocates are claiming that they are seeing care suffer under the model. Researchers who study the issue say the concern may be driven more by a fear of change than any actual shortcomings in care.

Until recently, most state Medicaid programs have excluded people with disabilities from managed care because of their complex needs. But that is changing. Twenty states now have shifted their MLTSS program to private managed-care companies.

The number of beneficiaries moved into MLTSS programs has grown from 105,000 to 1.6 million in the last 10 years. Almost all users of Medicaid-funded long-term supports and services over age 65 are dual-eligible for both Medicare and Medicaid. There are protections in place to ensure access to care. There are also financial incentives to reduce services in managed care that do not exist under a fee-for-service system. However, there are safeguards in place with appeal rights and the fact that if beneficiaries’ health is not managed well, managed-care organizations may face increased costs.

Plan operators say they’ve seen MLTSS create positive change that has allowed people who would otherwise be institutionalized under fee-for-service Medicaid stay in their communities.  However, a common complaint is lost access to care. Participants reported that the Medicaid managed-care organizations (MCOs) running the programs frequently deny long-term care services and supports that were previously provided under the Medicaid fee-for-service system. States insist such cases are rare and that care for disabled Medicaid beneficiaries improves under MLTSS and there are strong appeal procedures in place if there is a concern about impact on care.

Managed care for long-term support clearly can save Medicaid money. The median annual cost for nursing facility care nationally was $91,250 last year compared with $45,800 for one year of home health aide services, according to Kaiser Family Foundation.

Federal studies have also shown that MLTSS programs work best when the plan management company has control over a beneficiary’s Medicare benefits as well as their Medicaid long-term care benefits.


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