medicaid managed care

Healthcare Reform

A Plan to Resolve Conflict of Interest in Managed Care

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medicaid managed care

Focusing on Medicaid eligibility in the quest for patient-centered care.

Implementation of the Affordable Care Act is increasing the number of people eligible for Medicaid, which is fueling the debate about conflict-free case management in Managed Care programs.

The Root of the Problem

Historically, Medicaid beneficiaries who needed to access home- or community-based long-term services (HCBS) and support programs underwent an assessment by a care coordinator or case manager. That person helped them develop service plans or make arrangements to identify appropriate local providers, explained Frank Spinelli, vice president of long-term care solutions, Xerox.

“But when the HCBS programs started to take off, a number of providers besides being service delivery providers were also running case management agencies,” Spinelli said.

There’s an increased possibility for conflict of interest in that kind of system; when the assessor is also the provider, he may be more likely to recommend treatments and care options that are more expensive, whether or not they are necessary.

Even when the case management and provider (i.e. homemaker services or group home) units are separate but contained in the same organization, the risk is high.

“In a particular state, we noticed that a significant number of individuals were being recommended for group homes, and some could have functioned very well in independent living,” Spinelli said. “The provider was influencing their choices.”

As reimbursement models changed, providers had incentive to get individuals to choose more complex, expensive services.

Addressing the Issue

Over the last several years, leaders at the Centers for Medicare & Medicaid Services began to recognize areas where this type of conflict of interest was common. National health policy has reflected their discovery.

“When the Deficit Reduction Act was introduced in 2005, there was a provision that allows states to develop some plans, requiring that they adhere to conflict-free case management,” Spinelli said.

The Community First Choice Option in the Affordable Care Act allows communities to expand their services as well, provided that they adhere to conflict-of-interest-free case management.

So how can Medicaid health plans remove conflict of interest from case management, and separate managers from provider services? More than 30 states are facing that dilemma as they move the bulk of their Medicaid beneficiaries into Managed Care Organizations.

Guidance from CMS suggests two basic options for long-term managed care plans:

• The state retains control of assessment.

• The state contracts with an outside case-management entity. The company providing the initial assessment must not have any financial interest in the amount or type of long-term services the beneficiary ends up choosing.

• The state allows assessment and provider services to co-exist in one organization, as long as the organization agrees to set up firewalls separating the two units.

Where’s the rub?

There’s an issue out there now about how states move to managed care, and a number of states over next two years will be doing this,” he said.

To adhere to conflict-free standards, plans must make sure the individuals are not related by blood or marriage to any of the caregivers, or are being paid by any them.

In many ways, plans are attracted to option three, the firewall approach. That would require the least change from the present system.

But will interior firewalls eliminate conflicts of interest, and will patients trust them?, Spinelli asked. He believes option two is the best approach.

An unbiased one-time assessment leaves the family with a detailed document of what the patient’s needs are, to what he is entitled, and what short- and long-term goals should be.

The family can refer back to this document if the level of care in their plan isn’t measuring up.

“The beauty of the independent entity is you’re putting it in the patient’s hands,” he said.

In other markets, when financial institutions need an audit or patients need a second opinion from specialist doctors, the best choice is always the most independent, he said.

“Companies don’t do an audit internally, they hire an outside CPA,” Spinelli said.

“The goal is giving people information so they can make unbiased, independent, informed choice about their lives,” he said.

“You want to empower people to be in a position to ask ‘Why this and not that?’”

Though many states are opting for the firewall approach, some states are choosing independent entities on the eligibility side, which Spinelli says is a good first step.

“I believe we should take this a step further and provide the family with recommendations for needs, goals, options – not just a stamp that says, ‘You are eligible.’”