California Gov. Jerry Brown's latest fiscal budget proposes ending a program that coordinates care for people enrolled in both Medicaid and Medicare next year. The program failed to show it saved money but because Gov. Brown believes it improved care, he's asking to continue with many aspects of it.
Last week, Brown said his proposed budget for fiscal year 2017-2018 did not include funding for its Coordinated Care Initiative (CCI), despite the fact that the state is enjoying a surplus.
The program, which began in 2012, had private insurers pay for managed long term services and supports to Medicaid beneficiaries and a demonstration that would coordinate care for people dual-eligible for both Medicare and Medicaid in an effort to provide less expensive, but better care.
CCI was flagged for years as not being cost-effective and included a provision requiring the program be accessed for cost savings every year. If it failed, the program would be canceled the following year. If Gov.'s Brown budget is finalized, the program will end June 30.
Brown said he'd like to preserve elements of the effort, including asking payers to continue to oversee benefits for dual-eligibles. Brown also hopes to continue the MLTSS program because it kept people in their homes instead of hospitals or nursing homes. In order to continue those services, new legislation would have to be drafted.
"We are pleased that the governor's budget preserves the Cal MediConnect program, which allows us to continue to coordinate care and improve care outcomes and access for this fragile population," said Cherie Compartore, senior director of government affairs at L.A. Care Health Plan, a CCI plan.
Currently, in most states, a person who is dual-eligible for Medicare and Medicaid is covered under one plan for Medicaid, while receiving fee-for-service Medicare. Thirteen states, however, have demonstrations that have one private payer in charge of all of that person's health benefits under an umbrella.
“While the administration has indicated that it does not expect these changes to have any negative impact on beneficiaries, we will be monitoring this proposal,” said Linda Nguy, a policy advocate for the Western Center on Law and Poverty.
The coordination of dual-eligibles is something a number of government agencies have aspired to as a way to curb costs for what is predominantly a chronically ill population that currently costs about $350 billion a year in federal and state spending to cover. The benefits of such coordination, however, have yet to be proven in any federal analysis.
Charles Bacchi, CEO of the California Association of Health Plans, said in a statement that he's hopeful Brown will continue to push to coordinate physical, behavioral and social services under one umbrella.
However, providers and plans are worried about one change likely to stick. Private payers will no longer offer home-supportive services benefits, such as the use of personal care attendants. Instead, local counties will provide those services under Brown's proposal.
"This action does not support integrated services and care, as there would no longer be a single accountable entity, and it misaligns incentives for keeping people out of institutions, especially nursing homes,” said Maya Altman, CEO of Health Plan of San Mateo, one of the plans involved in CCI.
The shift in responsibility could cost county governments an estimated $625 million next fiscal year and more than $4.4 billion over six years.
“We undoubtedly would have to make cuts in other vital social services to cover these costs,” Keith Carson, president of the California State Association of Counties, said in a statement. “These services are required by both state and federal laws, so if the costs do fall on counties, we have to pay them, and we don't have the ability to raise the revenue we'll need to do so. That means cutting other critical local services.”
Correction, January 19, 2017:
This story was updated to correct and clarify the process by which California's Coordinated Care Initiative would be changed.