The CMS will engage providers in New York in an effort to turn around the state's struggling experiment to coordinate care for low-income and disabled residents eligible for both Medicaid and Medicare.
A dozen states have rolled out three-year demonstrations to serve dual eligibles, who often receive splintered care at extremely high costs. Most of the demonstrations are facing similar problems.
In New York, as many as 124,000 residents were eligible for the state initiative called the Fully Integrated Duals Advantage when it launched the first of this year.
But as of Sept. 1, only 7,280 had enrolled and 57,375 have opted out. On top of that, nearly 400 people dropped out of FIDA between August and September.
“New York ... has achieved levels of market penetration that are not remotely close to any of the other markets,” Tim Engelhardt, director of the CMS' Medicare-Medicaid Coordination Office, said Tuesday at a duals summit hosted by America's Health Insurance Plans. “We need to make a mid-course correction.”
The CMS, which benefits if the program successfully lowers costs, will try to attract providers, which in turn, could draw their patients and other beneficiaries looking for wider access to care.
Engelhardt hinted some other relief may be coming that would benefit demonstrations nationally. Right now beneficiaries can change plans on a monthly basis, destabilizing enrollment and risk.
“The experience we've had … gives us a lot of reason to think about how this policy has played out in real life,” Engelhardt said. “The challenge of delivering a truly integrated product, in which we prioritize care coordination for a beneficiary, can easily be undermined by (constant) movement back and forth across plans.”
Engelhardt stopped short of saying how the CMS might remedy the situation.
In a white paper released earlier this month, the New York Department of Health wrote that providers were not encouraging their patients to enroll and that patients were opting out for fear of losing their current Medicare providers if they were not in the network.
New York is not the only state that has needed a mid-course correction.
Under the demonstrations, states receive a capitated payment combining Medicaid and Medicare, minus agreed-upon savings.
The CMS earlier this year allowed Massachusetts to reduce the savings needed to achieve under its demonstration after it became clear that the initial goals were too ambitious given the needs of the enrollees.
“One of the reasons Massachusetts needed a mid-course financial correction is that nobody figured out what would actually happen when you found some of these people, did a risk assessment, and came up with a list of what they actually needed,” Dr. Kit Gorton, president of Tufts Health Plan, said at the AHIP event.
Up to 9 million are dually eligible for Medicaid and Medicare in the U.S., and many of them have severe chronic conditions and physical or behavioral disabilities.
As many as 1.7 million are eligible for the dual demonstrations, but less than 400,000 have signed up so far for the voluntary program, according to the CMS.
Making matters worse, people who are passively or willing enroll into the demonstrations are dropping out.
A recent Wells Fargo analyst note stated that more than 13,000 people covered by various payers dropped their dual demonstration plans between Sept. 15 and Oct. 15.
The fact that these individuals dropped out of the demonstrations all together, rather than switch to another plan under the federal initiative, indicates these individuals decided they would rather stay in their current coverage options, said Peter Costa, an analyst with Wells Fargo Securities.
Ana Gupte, a managing director at Leerink Partners, has also noted the trend. Providers in some states such as California have been encouraging the dual-eligible members to move out of the managed-care pilot programs into unmanaged fee for service offerings, which do not control utilization as tightly and may be more lucrative for the providers, Gupte said.
“There is no obvious financial incentive for the members themselves to remain in the managed-care pilots,” she added.
The high opt out and turnover has led many payers participating in several states to drop out of the demonstrations.
“Opt out is really challenging in this market. If you don't have the ability to lock people in, you don't have predictability in the investment you're making,” Shawn Fitzgibbon, chief product officer at New York-based Emblem Health, said while at the AHIP event. “It's an overwhelming challenge to make it work.”