Managed-care companies now running the state’s Husky Medicaid program will soon have some new competition, which proponents say could help lower health care costs.
Beginning Jan. 1, the state will be piloting a new enrollment plan for the Husky program that puts primary care providers directly in charge of providing case management and care coordination, and allows doctors to bill the state directly for health services, completely shutting out insurance companies from the process.
The new option, known as Husky Primary Care, will be available to Husky enrollees in Greater Hartford and New Haven, and is being piloted in Waterbury and Willimantic.
Husky is the state’s approximately $1 billion Medicaid program that serves about 350,000 low-income adults and children.
Proponents of the new enrollment option say it will help enhance quality care and drive down the state’s Medicaid costs by creating more competition, thus improving the state’s ability to negotiate rates with the three insurance companies — Community Health Network of Connecticut, Aetna Better Health and AmeriChoice by UnitedHealthcare — currently running the Husky program.
About 30 other states are offering a similar option to their Medicaid members, state officials said.
The state legislature required the Department of Social Services to develop the Husky Primary Care plan option in 2007, partly in response to complaints by consumer advocacy groups who said that the privately managed Medicaid plans were not transparent about reimbursement rates, were denying requests for services, and too costly.
“There is a serious problem of overpayment to the HMO’s,” said Sheldon Toubman, a lawyer with the New Haven Legal Assistance Association. “That money is coming from taxpayers, and we just can’t afford it with the big deficit we are facing.”
Toubman said the new enrollment plan is similar to a public option currently being pitched by some Democrats on Capitol Hill, and will create a cost savings to the state by removing the overhead costs that insurance companies create. He said insurers typically charge about a 15 to 20 percent overhead fee.
An independent audit conducted by Seattle-based Milliman Inc. earlier this year concluded that the rates negotiated by state officials and insurers were 5 percent to 6 percent too high, and that the state overpaid them by up to $49 million. The report by Milliman, which was hired by the state comptroller’s office to review the Husky Medicaid program, was disputed by the insurance industry.
Savings Questioned
Keith Stover, a lobbyist for the Connecticut Association of Health Plans, said he doesn’t necessarily believe that the new option will be a cost saver.
“Anybody who believes that by the wave of a magic wand, a new system is going to produce dramatically reduced expenses is just wrong,” Stover said. “If there is any system that is set up to provide quality care, cost containment, and a data overlay that permits you to measure those things, it’s the existing Husky managed care plans.”
Under the Husky Primary Care option, primary care providers will be responsible for approving and monitoring the care of enrolled Medicaid beneficiaries, and they will receive a monthly case management fee of $7.50 per member per month. That’s in addition to their regular Medicaid fee-for-service reimbursement for medical services and treatment.
Toubman said that most of that money will be used by physicians to hire case managers, who will be responsible for coordinating care of patients including arranging transportation to appointments, setting up appointments with needed specialists, and performing risk assessments.
In a managed care plan, insurers share case management functions with the primary care provider, and provide more of the customer service functions, such as appointment and transportation scheduling assistance.
In Waterbury and Willimantic, where the new plan option is already being piloted, 54 primary care providers have signed up to participate, and 237 Husky members are using it, said David Dearborn, spokesman for DSS.
Meanwhile, over 90 primary care providers have signed up to participate in the New Haven area, while nine have contracted in Greater Hartford.
Dearborn said an independent evaluation of the pilot program in Willimantic and Waterbury is due to the state by July 1. If the audit finds that the enrollment plan is successful in containing costs and improving quality and access, it will be expanded to other areas.
Ellen Andrews, the executive director of the CT Health Policy Project, a health care consumer advocacy group, said that the new option will keep decision making between the doctor and patient.
“Doctors are not going to have to fight with insurance companies to get paid and there won’t be an insurance company overruling any of their decisions,” Andrews said.
Donald Langer, president of AmeriChoice by UnitedHealthcare in Connecticut, a Husky provider, defended managed care companies, noting that one of the advantages they provide is their deep experience and resources.
He said AmeriChoice has 2.8 million Medicaid members in 25 states, which are backed by a national support team that has a “wealth of knowledge in the industry’s best practices.”
He also said managed care companies offer things like local social workers, and stress preventive care initiatives that lead to long-term cost savings.
“All of the things that we offer are tried and tested,” Langer said.
