New Jersey Managed Medicaid Home and Community Based Care

Medicaid 2.0 Blueprint for the Future

Authored by New Jersey Health are Quality Institute with support from the Nicholson Foundation.

This Medicaid 2.0: Blueprint for the Future lays out a plan to redesign and modernize New Jersey’s Medicaid program.

The report’s recommendations cover five basic areas:

A. Modern Foundation - these recommendations are intended to modernize the infrastructure used by the State to oversee and manage the Medicaid program.

B. Foundational Medicaid Reforms - these recommendations target essential functions in need of an upgrade.

C. Upgrades to the Medicaid Model - this section proposes fundamental changes to the way services are delivered.

D. Financial Reform - recognizing the State’s current fiscal problems, and the potential loss of significant federal funding, these recommendations are intended to improve the return on investment for beneficiaries and taxpayers.

E. Path to Population Health - these recommendations are designed to address the long- term health of the Medicaid population.

The Report outlines many outstanding issues in the Medicaid Managed Care system in NJ. It is refreshing to see these problems brought to light. However, my comments will focus on how the issues raised and the recommendations made in this report impact, what is perhaps the most overlooked and essential level of care – Home and Community Based Care for the MLTSS population. While this level of care is only 4% of NJ Medicaid spending, it could have a significant impact the Aged and Disabled population, which are 54% of Medicaid eligible in New Jersey. 

The frailest elderly people in New Jersey depend on the help provided by Home and Community Based Care program to stay at home. These are folks who would otherwise be eligible for nursing home care.  Thanks to this program’s care, and the work of more than 35,000 caring, well-trained Certified Home Health Aides (CHHA), these poor seniors are able to continue living at home. Without this help, their minimal incomes, and serious health problems, these fragile lives have few alternatives and would likely move into more expensive, taxpayer subsidized nursing homes.   

The overriding concern of any Medicaid reforms is the need to make the system more cost effective in order to either reduce or limit the programs spending. Many of the recommendations in the Medicaid 2.0 Blueprint for the Future report are meant to save money by making the system or efficient. Coordination, elimination of Fraud, Waste and Abuse (FWA), enhanced quality through better outcomes, and improved access for eligible individuals and providers are discussed. The efficiencies gain as a result of these recommendations are all impacted by utilizing the least restrictive setting and most cost-effective care delivery method.

There has been an effort for many years to move as much care to a less costly non-institutional based setting. In most incidents, this has meant the home. Advances in care technics and technology has made this shift possible, and home the appropriate setting for more care than ever before. As the report points out, long-term care can easily exceed $100,000 per year. It is no secrets then, that repositioning care to home has produced significant saving for Medicaid. This movement is further supported by the fact that most people would prefer to be in the comfort of their home rather than in an institutional setting, where the expected health and/or social outcomes are not aggravated by the stress and anxiety of institutional care.   

The Report’s Recommendation 6: Medicaid Regulations and Managed Care Contract Upgrade, discusses the need to update the regulations to more effectively and efficiently govern of the Medicaid program. This update not only provides the Managed Care Organization (MCO) with clearer guidelines, but also allows the State to more effectively monitor the performance of the MCO. This lack of clear regulations has led to a system where the State has been ineffective in exercising its responsibilities to oversee the Medicaid program under the MCO management, and the MCO in turn have been free to interpret program guidelines and regulations without interference from the State. It is important to recognize that New Jersey has a contract with the federal government, which outlines the State’s management responsibilities for the Medicaid program under federal law, and the MCO contract with the State contains adherence to these federal mandates, in addition to those imposed by the State of New Jersey. 

Recommendation 8: Statewide Universal Credentialing System, points out that there is a shortage of providers in the Medicaid program brought about by disjointed and cumbersome credentialing process. While this may be a factor in the lack of providers, it is not the sole or even the main reason for an insufficient provider pool. In fact, the main reason for this situation is the lack of adequate reimbursement rates paid to providers by the MCO. A case in point is the current reimbursement for home and community based care providers for personal care services. The rate is as low as $13.80 per hour, and was unilaterally reduced by the MCO from the initial $15.50 per hour in 2014. It is no wonder providers have left the MCO networks, or refused to become members of the MCO network. Additionally, these unwarranted low rates ripen the system for more fraud and abuse, thereby robbing the system of scares funds, and increasing oversight costs.

The need to find alternative payment models and incentives, discussed in Recommendation 15: Managed Care Organizations Performance Incentives, is needed if the impetus to reduce or limit spending is to push care to the home, or keep people at home rather than in an institutional setting. The current method of reimbursement to the care providers is unsustainable. Linking payment to outcomes, quality and beneficiary satisfaction is one idea with merit. It makes sense to pay those providers that get good results for their efforts, which will help improve the entire provider network by weeding out those providers who underperforming. Likewise, providing enough reimbursement to help improve the network with quality and outcome innovation is another important incentive. This may include payment based on disease management, prevention initiatives, and beneficiary support needed to realize the desired health benefits.

One concern is the incentive provided to the MCO. To give the MCO more money will not necessarily mean better outcomes, quality or satisfaction or the saving the State hopes for. However, reducing the amount of funds is counterproductive, even if outcomes improve. Sustaining the network and using incentives to improve care delivery is essential to the success of any effort to reform the Medicaid system and achieve the desired results.

Ideas like Patient Centered Medical Homes (PCMH) and Accountable Care Organizations (ACO) Discussed in Recommendations 19 and 22 are worth pursuing. Flexible, integrated and coordinated care fits well with the strengths of the home and community based care model. Caring for the entire person needs as they change, centered around the home environment, is very much within the capabilities of home care.  Who better knows the beneficiary than the care provider that sees them on a consistent basis, regularly monitors their condition, and identifies change early enough to intervene before the situation becomes critical.  Not only is there cost saving, but increased satisfaction with the quality of life can be obtained.

The problems and solutions outlined in the Medicaid 2.0 Blueprint for the Future, if not addressed, leaves little doubt that without change New Jersey Medicaid runs the risk of the State losing its fundamental fiduciary duty and the ability to properly administer the Medicaid program to ensure public Medicaid dollars are consistent with efficiency, economy and quality of care and do the most good for those who are in need.