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Managed Care Plays Key Role in Expanding Long Term Services

As long term services and supports (LTSS) have moved from institutional to home and community based settings, the use of managed care organizations (MCOs) has grown.

Use of managed care grows for long term beneficiaries

Source: Thinkstock

By Jesse Migneault

- Due to legal and financial reasons, the past several decades have seen LTSS move from institutional settings to home or community based care, increasingly adopting the use of MCOs.   As states adopt the MCO system into their LTSS design, the result has been a managed LTSS (MLTSS), which seeks to boost quality, streamline services and control cost of care. 

LTSS is an essential healthcare component for individuals who have cognitive disorders, mental health and/or substance use disorders,or physical, intellectual or developmental disabilities.

The five largest populations that use LTSS include: older adults, adults with physical disabilities, individuals with intellectual disabilities and/or developmental disabilities (ID/DD),  complex behavioral health conditions (mental health/addiction), and children with medical complexity. The largest group currently enrolled in an MLTSS are adults (and seniors) with physical disabilities, at approximately 17 percent. 

“Through a well-designed managed care approach, MCOs are able to enhance the delivery of coordinated, high-quality services and supports that help individuals stay in their homes and communities,” said an Anthem Public Policy Institute report. “The shift to managed care can result in greater satisfaction for the populations using services, create opportunities for providers to function in the most coordinated manner, and achieve states’ goals to serve Medicaid beneficiaries with high-quality care and services while operating under considerable budgetary constraints.”     

An MCO is a type of health insurance, where payers have negotiated costs with contracted providers and facilities to offer an in-network healthcare delivery system for their members. 

READ MORE: Medicaid Managed Care Spending Rose to $107 Billion in 2014

Typically, MLTSS programs focus on allowing beneficiaries to remain in their homes, with an emphasis on independence and community engagement, while also being part of a larger managed care network of stakeholders.

The price tag for LTSS is substantial, with nearly a third of all Medicaid spending going towards it.  The total amount of public and private spending for LTSS was $310 billion in 2013, about half of that being paid for by Medicaid.  This does not include the value of care provided by informal caregivers such as family and community members, which is estimated at $522 billion.

Although MLTSS expenditures were $20.5 billion, or only 15 percent of Medicaid LTSS spending, it represents a growth of four times that spent in 2008.

The high-cost of dual-eligible beneficiaries has made MLTSS a desirable option, because of shared facilities and providers, and fewer administrative interactions with multiple agencies.

The overall move towards a MLTSS represents not only a shift in healthcare delivery, but also a change in funding across the nation to a value-based system.  The previous LTSSs were primarily Medicaid funded fee-for-service (FFS), even in states with existing Medicaid MCOs. 

READ MORE: How CMCS Improved Managed Care in State Medicaid Programs

Despite a potential of savings in healthcare expenditures, some states remain reluctant to  adopt a MLTSS.  This is even when there are multiple drawbacks in the traditional FFS model, such as misaligned incentives, access issues, inefficiencies, and service fragmentation for beneficiaries. 

A primary advantage of a value-based MLTSS over the traditional FSS system is the integration of services and the ability to streamline a holistic healthcare delivery system.   

Due to federal and state regulations and agencies in the FSS system of care, delivery is often fragmented and difficult for the families of beneficiaries to navigate, which can lead to poorer health outcomes and a lower quality of care.  This is due in part to the fact there is no larger entity, like an MCO, which serves to cut across healthcare programs, providers and funding sources to determine the best care for an individual beneficiary.

The primary difference between MLTSS and the traditional fee-for-service model is a greater reliance on patient-centered care delivery. 

By employing a MLTSS care delivery model, the beneficiary has greater access to individual choices and independent action through the community or home based setting.

READ MORE: Health Payer Tips for Negotiating Managed Care Contracts

“The success of MLTSS depends on complete service integration and a commitment to person-centered solutions. Further, from the state perspective, a successful MLTSS program produces better outcomes for members while also producing value from an administrative perspective, including budget predictability,” stated the Anthem report.  

As state Medicaid funds move towards MLTSS initiatives, the report recommends three essential components to the states for success: maintain flexibility in designing the program to meet individual needs, engage a broad range of stakeholders, and provide value to the state.

This engagement of stakeholders includes early integration of advocates, providers, and ombudsmen  in the communities to handle consumer complaints and develop uniform processes for care. 

It also involves an emphasis by MLTSS to provide administrative and program value to the state.  This is accomplished by supporting Olmstead compliance goals.  The Olmstead goals resulted from a lawsuit between the US and the state of North Carolina’s mental health system.  The Olmstead decision mandated individuals to be moved from institutional settings to homes or community-based settings of their choice, the establishment of data-driven assessment and evaluation, and the elimination of unnecessary duplication of services.

MLTSS can also offer states greater budget predictability, by negotiating MCO contracts with capitated payments per beneficiary.  The payments are further tied to financial incentives based on the results from established quality benchmarks.

In terms of public health and transparency, perhaps one of the greatest features an MLTSS can offer a state is the creation of a network to monitor accountability.  This can include performance expectation, financial incentives and public reporting of conditions and member satisfaction. 

A state MLTSS network can also further the design and integration of a value-based purchasing model, which can further move the entire healthcare system towards accountability.

“LTSSs partnership with MCOs, and a state’s MLTSS program creates mechanisms for collaboration across health and supportive services, promotes access to HCBS, enhances quality of care and services, and develops payment methods that reward the coordination of the full array of services and supports an individual with LTSS needs may have (e.g., physical health, mental health and substance use disorders, LTSS, housing, education, and employment supports)” concluded the report. “MCOs are well-positioned to support states and their Medicaid beneficiaries in achieving the vision of a high-quality and efficient LTSS delivery system.”

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