Virginia has submitted a waiver to transform its Medicaid program and move the state's most vulnerable populations into managed care.
The 1115 waiver (PDF) seeks approval from the CMS to implement two initiatives. The first is to transition blind, elderly and disabled people into capitated health plans. This group includes individuals dually eligible for Medicaid and Medicare. As a result the state plans to allow a demonstration it now has to coordinate care for duals to end next year.
The second part of the waiver requests a Delivery System Reform Incentive Payment program to allow the state to use federal Medicaid funding to create financial incentives for providers to pursue delivery-system reforms. Those reforms could involve infrastructure development, system redesign, and clinical-outcome and population-focused improvements.
The Virginia Medicaid program covers over 1 million individuals, mostly children and pregnant women. The vast majority of these individuals are already in managed care.
Under the proposed waiver, the state hopes to move the elderly, blind and disabled individuals it covers into managed care. This group is made up of over 200,000 individuals; today, just 80,000 enrollees are in capitated health plans, with the rest still in fee for service.
Virginia will bid contracts for Medicaid managed-care organizations to provide a fully integrated managed-care model that includes physical, behavioral, substance use, and long-term support and services benefits.
A disproportionate share of Virginia's Medicaid spending is allocated toward enrollees who receive ong-term supports and services. This population is only 6% of enrollment, yet accounts for 30% of total Medicaid expenditures, state data show. Virginia spends more than $7 billion annually.
Virginia is one of a dozen states that had rolled out three-year demonstrations under the Affordable Care Act to better coordinate health benefits provided to duals. The initiative, known as Commonwealth Coordinated Care, is set to expire at the end of 2017.
In a letter sent this past summer to the CMS, Virginia state officials had indicated they would extend the program.
The letter was sent as the state was planning the new waiver, according to Karen Kimsey, deputy director of complex care and services in the Virginia Department of Medical Assistance.
However that letter was nonbinding, and it was always the intent to let the program expire at the end of the contract. The state looked at it as a primer on managed care for duals, Kimsey said.
The voluntary demonstration was also limited to certain counties. Like other states with dual demonstrations, there a high proportion of patients who opted out.
At of the end of November 2015, there were 67,327 Virginians eligible for Commonwealth Coordinated Care, or CCC. Only 29,429 participated.
“There have been challenges in mitigation disruption of services when the beneficiaries opt out of CCC and back in to fee for service and perhaps repeat that cycle several times,” Dr. William Hazel, Virginia's secretary of health and human resources, said during a stakeholder call last year. “While some see this as freedom of choice, we see it as a continuity-of-care issue.”
Some advocates have expressed concern about moving duals and other vulnerable Medicaid populations to managed care. A leading worry is the lack of data on the impact on access to care for these individuals, according to the Virginia Board for People with Disabilities.
Providers were pleased with the Delivery System Reform Incentive Payment proposal in the waiver, which would provide funding for groups made up of providers and nonmedical personnel to work with the state's Medicaid managed-care organizations to develop innovative programs aimed at bettering care for Medicaid beneficiaries.
“The goals of the initiative are laudable—to bring a coordinated, cooperative approach to caring for patients with significant healthcare needs requiring regular attention that has the potential to bring down the cost curve through regimented care,” Julian Walker a spokesman for the Virginia Hospital and Healthcare Association, said.
