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Contract negotiations with Medicaid managed care plans often are so long and difficult that state officials may be prone to breathe a sigh of relief and close the file folder once they are done. But that can be a significant mistake if no preparation has been made for when a plan exits a state.
By now, nearly every state has experienced at least one plan exit and the disruption to patients and providers that can be the result of an exit. A new study by the Center for Studying Health System Change looks at the issue of plan exits and the best practices states can follow to ease the pain of a plan’s departure.
Anne Jacobs, a consultant in the Washington, DC, office for Tucker Alan, who drafted the report for the center, tells State Health Watch that states often don’t have enough time to deal with a pending plan exit because nothing in the contract specifies how much notice state officials should be given. "We think that six months’ advance notice is appropriate from a plan that is going to leave a market. The contract should also have as much detail as possible on transition steps and responsibilities."
When plans exit state programs, she says, their clients may lose their primary care providers and specialists or special services such as eyeglasses and medications. Clients with special needs are especially vulnerable to problems as a result of disruption of care.
Ms. Jacobs says states have found that addressing the following issues has helped foster smooth client transitions:
• determining enrollment options into other managed care or fee-for-service plans;
• determining whether new enrollment will be open or by auto assignment;
• taking steps to preserve provider-client relationships, such as forwarding the name of each client’s providers to receiving plans and telling clients which other plans their providers accept;
• specifying exit and transition tasks in contract language;
• holding plans responsible for materials and data such as medical records and other important administrative documents;
• notifying clients through a variety of communication channels;
• notifying providers;
• notifying the public and other stakeholders;
• taking special steps to serve clients with special needs.
Ms. Jacobs says that good advance planning may be of little help when a health plan is in financial collapse and seized by the state. In such an instance, it can be hard for state officials to get the information they need from the plan executives, and it is imperative that the state has a contingency plan ready so officials know what to do.
Communication with plan members and providers is very important, she says, and the message needs to get out in as many ways as possible to as many entities as possible, saying, "The more consistent the message is, the easier it will be to understand."
She adds that some states have drafted message points and given them to advocates to be used in the advocates’ newsletters. States also have had advocacy groups review proposed communication pieces in advance and have revised them heavily based on feedback from the advocates.
Maintaining continuity of care is the biggest issue facing patients during a plan exit, Ms. Jacobs says, while providers are most concerned about being able to maintain their patient base and being paid for outstanding claims. Patients with special needs require the most attention and assistance. Best practices for this population seen in several states include:
1. one-on-one client notification;
2. care coordinators and case managers assessing needs and transition clients;
3. special transition plans for clients with special needs;
4. continuity of care for pregnant clients in the third trimester.
Ms. Jacobs says the transition can be eased if both the state agency and the managed care organization specifically name a key contact person who is readily available and can be reached quickly as issues arise. She notes that large managed care organizations typically have the resources needed to carry out a transition better than do smaller local groups. This difference can become important as more large, national plans bail out of Medicaid managed care, leaving the field to smaller, local, Medicaid-only plans.
Colorado’s director of managed care Patrick Gordon tells SHW his state has experienced some loss of partial service areas, but so far has not had a full plan exit. Many years ago, he says, the state was in a contract dispute with a plan and offered to terminate the contract. But providers raised concerns about loss of access and reduced reimbursements that made it into the political process, and the state’s legislature encouraged both sides to find ways to resolve their differences.
One thing working in Colorado’s favor, Mr. Gordon says, is that rates in the state have been adequate. He says it’s his understanding that in states that have experienced plan exits, the cause often has been competitive bidding and inadequate rates.
Kathryn Haslanger, vice president of New York City’s United Hospital Fund, tells SHW her organization has had considerable experience with plan exits. In addition to the mechanics of transition, she is concerned about why plans leave and the impact on the program of the departure of commercial plans in particular.
One reason for the departures was a change in state law that eliminated a financial penalty imposed on HMOs — including those with commercial accounts — that failed to demonstrate a willingness to serve the Medicaid population. At the same time as the requirement changed, there were steep cuts in Medicaid managed care premiums and a move to a request for proposal process for selecting plans.
"Plans saw the state as a difficult and unpredictable business partner," Ms. Haslanger says. "Now we have a much smaller commercial plan presence for many reasons, not just money. There have been concerns about inappropriate and uncompensated regulatory and reporting demands, and commercial plans have wanted to concentrate on their core business."
She says there is a value in encouraging national commercial plans to participate in Medicaid managed care, not necessarily because of a higher quality of care, but because they potentially bring in a different set of providers. "Giving clients a broader range of choices is a good thing. Community-based plans are very valuable, but I think it’s important to have broad choice. Also, commercial insurers bring different eyes and voices to the policy discussions about how Medicaid managed care should operate. If they leave, all that are left are the safety net providers. I think the other plans strengthen the program."
Ms. Haslanger credits state officials with good work in easing a transition upstate, particularly through letters to the enrollees in the exiting plan, advising them of their need to pick a new plan and identifying available physicians and the plans in which they participated.
"The most important policy reason for Medicaid managed care is to give beneficiaries access to a medical home that will be available to them for an extended period of time, every hour of every day. There is a lot of overlap in provider panels and it’s good when state officials try to help patients stay with their physicians when possible," she says.
[Contact Ms. Jacobs at (202) 326-9210, Mr. Gordon at (303) 866-4092, and Ms. Haslanger at (212) 494-0700.]