Managed-care plans increasingly taking over Medicaid long-term care. Not everyone is happy about it.

Kristin Bollinger of Freehold Township, N.J., had a routine when it came to her personal and health needs. Since six weeks of age, the learning- impaired 34-year-old has suffered from a seizure disorder that requires long-term care. She has difficulty with the basic tasks of living such as swallowing her food.

For most of her adult life, New Jersey's Medicaid agency provided a private duty nurse who spent 40 hours a week helping her manage her five anti-seizure prescriptions as well attend to her daily needs. But now the state, which turned its long-term support service program over to private managed-care companies in 2014, wants to replace her nurse with a less expensive personal care attendant.

Her mother, Cheryl Bollinger, is appealing. She fears a personal care attendant can't adequately address her daughter's complex problems.

“If the point of managed long-term supports and services is to keep people in the community setting, why would they take a service away that enables that?” Bollinger said.

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.

Officials say it enables delivery of more coordinated care and prevents sending people to expensive nursing home settings. But some 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.

“Beneficiaries who use LTSS rely on those services to meet most of their daily needs, and it may have taken them a long time to cobble together their current services and providers, so the idea of changing delivery systems and the possibility of disrupting care arrangements creates risks,” said MaryBeth Musumeci, associate director of the Kaiser Commission on Medicaid and the Uninsured.

Until recently most state Medicaid programs have excluded people with disabilities from managed care because of their complex needs. But that's changing. Twenty states now have shifted their MLTSS program to private managed-care companies—largely insurers—compared with eight in 2004. Overall, Medicaid spent $146 billion on LTSS in fiscal 2014, according to the CMS.

“LTSS now accounts for a third of Medicaid spending, and states, particularly those facing financial troubles, are hoping MLTSS will help them save money,” said Alice Dembner, senior policy analyst for long-term services and supports at Community Catalyst, an advocacy organization.

The number of beneficiaries moved into MLTSS programs has grown from 105,000 in 2004 to 1.6 million in 2014. Almost all users of Medicaid-funded long-term supports and services over age 65 are dual-eligibles, as are about half of LTSS users under age 65, according to research firm Mathematica.

But as Medicaid programs have turned to managed care for the disabled in need of long-term care, families like the Bollingers have not always been happy with the results. Disability Rights New Jersey, an advocacy group, has been flooded with calls since the state transition to MLTSS in 2014, according to its legal director, Susan Saidel.

“I've seen many people who have had their services reduced or terminated after MLTSS implementation,” Saidel said. “Sometimes services are altered to the point that impacts their ability to stay at home and not in an institution.”

Researchers there have noted the trend as well but said there are protections in place to ensure access to care. “There are financial incentives to reduce services in managed care that do not exist under a fee-for-service system,” said Jennifer Farnham, a senior research analyst at the Center for State Health Policy and professor of public policy at Rutgers University, which is evaluating the state's transition to MLTSS.

“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,” Farnham said.

Aetna Better Health of New Jersey, Amerigroup New Jersey, Horizon NJ Health and WellCare are the managed-care companies offering MLTSS in the state.

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.

“We don't hear complaints about this often” Erhardt Preitauer, CEO of Horizon NJ said. “We are focused on making sure people get the necessary care that they need.”

Other plans also defended the MLTSS concept. “LTSS delivered through the fee-for-service system can be siloed, since they are not designed to include comprehensive coordination among the array of providers serving the individual,” said Merrill Friedman, director of Disability Policy Engagement at Anthem, parent company of Amerigroup.

“This can cause fragmentation that often leads to undue stress, unnecessary duplication of services, and unidentified and unmet needs that can result in poorer health outcomes for individuals.”

But complaints about loss of services aren't only noted in New Jersey. The National Council on Disability, a federal agency that advises the White House and Congress, turned up numerous complaints over the past two years at the 10 community forums it hosted around the country.

A common complaint was about 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.

“The impression is that some MCOs are very strategic in their denials and that other plans might just be careless,” NCD said in its final report. “But the way it plays out for people in MLTSS plans is the same—services are cut substantially without notice and explanation.”

States insist such cases are rare and that care for disabled Medicaid beneficiaries improves under MLTSS. New Jersey officials acknowledged that some may face a cut in service hours, but there are strong appeal procedures in place if there is a concern about impact on care. There have also been instances where services have increased as a result of the new program, according to Nancy Day, deputy director at the New Jersey Department of Human Services, Division of Aging Services.

The state also says the program is keeping people in the community. There are now 48,000 people getting MLTSS, and 30,000 are in the community, up 12% since launch.

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.

Tennessee also claims success for its MLTSS program, dubbed CHOICES, which was launched in 2010. In the year before the program launch, only 9.75% of LTSS expenditures for older adults and adults with physical disabilities were home- and community-based. By the end of fiscal 2015, that had more than doubled to 20.06%.

One factor behind the state's success is that the plans offering MLTSS coverage in Tennessee are addressing the key issue of access to adequate and affordable housing for the developmentally disabled and others in need of long-term support. While Medicaid law prohibits plans from paying directly for housing, payers can connect their enrollees with providers that own housing or, in some cases, place individuals in homes of people willing to rent rooms to those who are less fortunate.

“Having a place you can call your own, where you pay rent, provides individuals with a sense of purpose,” said Stephani Ryan, director of LTSS Programs at BlueCare Tennessee.

Still, there hasn't been a national study that definitively shows MLTSS achieves both increased care quality and reduced costs, according to Musumeci at Kaiser. “The literature is still inconclusive,” she said.

Last year, the foundation launched a study of MLTSS programs in Ohio, Massachusetts and Virginia, but found insufficient evidence to draw conclusions.

Fragmentation of care for many of the beneficiaries who are dually eligible for Medicare and Medicaid also stands in the way of analyzing the effectiveness of moving to an MLTSS model. In some states, the managed-care plan only has control over long-term support benefits and not primary-care benefits under Medicare.

“When all you're responsible for is home care and long-term care, you're really doing care management with one hand tied behind your back,” said John Baackes, CEO of LA Care in California, which has created an MLTSS program specifically for dual-eligibles. “If we don't integrate MLTSS, it's never going to be 100% successful.”

Both the MLTSS program and the dual demonstration are part of a broader coordinated care initiative in California, which Gov. Jerry Brown has flagged as failing to save the state money. He's promising to end the experiment in 2018 if the trend doesn't turn around.

Plan managers are frustrated by expectations that MLTSS programs will show savings in just two or three years. “It can be challenging to manage expectations about the potential for immediate versus longer-term MLTSS beneficiary impact and cost savings,” said Friedman at Anthem, which runs MLTSS programs in eight states.

Policy makers need to understand that there are significant upfront costs for administrative and IT systems, Friedman said. In some cases, higher provider reimbursement rates are needed to build out a robust provider network that delivers high-quality services.

“Reducing overall cost and improving the health of program participants takes time, investment and a commitment to thoughtful program development,” he said.

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. This past spring, HHS examined two programs in Minnesota that targeted Medicaid beneficiaries 65 and older in need of LTSS. Under one, the care of duals was fully integrated, while the other only allowed plans to have a say on a person's Medicaid benefits.

Enrollees in the coordinated effort were 48% less likely to have a hospital stay, and those that did wind up in the hospital had 26% fewer readmissions. They were also 16% less likely to have any assisted-living services.

MLTSS “works best when integrated with Medicare,” said Gretchen Ulbee, manager of special needs purchasing at the Minnesota Department of Human Services. “It's a lost opportunity if dual-eligible people have different coverage for their medical benefit.”

Dennis Heaphy, 55, a quadriplegic with MLTSS coverage under One Care, Massachusetts' financial alignment demonstration, said his life dramatically improved once his benefits were integrated. He received a higher-quality wheelchair from Commonwealth Care Alliance, his One Care plan, and a new lift was installed in his home to help his caretakers get him in and out of bed more efficiently.

“If my care became fractured again, I would become really concerned,” Heaphy said. “I don't want to be going in and out of the emergency room again.”