A Deeper Dive: 34 Initiatives To Change Medicaid

Apr 30, 2015

A group of 29 Rhode Islanders, from health care providers to policy experts and lawmakers, has been convening for several months to come up with a plan to find $90 million dollars in savings from Medicaid. (Wonk note: That $90 million is just state dollars. The budget proposal calls for cutting more than $180 million, some of which is federal matching dollars.). That was at the behest of Gov. Gina Raimondo, who asked for help closing a nearly $200 million dollar state budget deficit.

Here’s a deeper look at some of the 34 initiatives they’ve proposed to do that.

Some of these initiatives, if approved by the General Assembly, could have a direct impact on Medicaid recipients: that’s one in four Rhode Islanders, by the way.  Others will affect health care providers like hospitals, nursing homes, and health plans. Taken together, they’re a big deal because we’re talking about how we spend more than 30 cents of every tax dollar in Rhode Island.

About the initiatives
The group’s recommendations fall under three categories: initiatives the reform the way we pay for or deliver health care; ways to reduce fraud, waste, and abuse in the system; and ideas for streamlining administrative and operational functions.

Here are some highlights from the first category, which I believe will have the biggest impact on patients and providers.

Initiatives # 1 and #2: The biggest savings would come from cuts to hospital and nursing home payment rates.
For hospitals, it’s five percent; for nursing homes, three percent. That represents about $58 million in total savings, about half of that state dollars.

What’s under consideration now is a plan for hospitals and nursing homes to earn some of that money back by pooling the savings in an incentive fund. (Wonk note: this would require negotiating a DSRIP [Delivery System Reform Incentive Payment] plan with the federal government, which could match some of the savings with federal dollars.) The Hospital Association of Rhode Island, including Care New England, proposed this plan, so they’re on board. It would require them to do things that reduce how much people use emergency rooms or need expensive hospital stays (all revenue losses for hospitals, until they figure out a way to make it up someplace else).

Lifespan, the state’s largest hospital system, was nowhere to be seen at this final meeting, and they have not weighed in on the plan.

I’m told nursing homes aren’t yet totally on board with this plan either but that they are in discussion with state officials. Their incentive fund would be based on their ability to transition people out of nursing homes sooner, if they don’t need that level of care, and other quality measures, like the frequency of the use of antipsychotic medications, which aren’t always so helpful for dementia patients.

Initiative #7: Scale up community health teams to target “high utilizers”
Wonk note: a high utilizer is a patient who uses a lot of medical services, particularly expensive ones. It’s not a judgment about that person, it’s just a statement of fact. We’re talking specifically about patients who often have multiple, chronic health conditions, could be homeless or transient, and might visit the emergency room frequently.

The thinking here – and you’re going to notice a theme – is that a high utilizer’s needs could be met in a less expensive setting. Let’s use an example: imagine someone who goes to the emergency room every time his blood sugar is out of control. It’s not that he wants to go the ER, it’s that he can’t afford diabetes medication. It’s also because an untreated mental illness prevents him from adhering to that treatment plan.

This initiative would scale up the efforts of a couple of community health teams already in operation. Here’s how it works: Medicaid goes through its rolodex of recipients and identifies high utilizers. They send that list to community health teams – who are community-based health care providers like nurses – who go find that person and help meet their needs. That might include getting them into housing, providing check-ups at home, securing a supply of medication, identifying a behavioral health problem that can be treated.

The Reinvent Medicaid group thinks it can save more than $6 million dollars doing this; that’s based, they tell me, on the early experiences of the community health teams already up and running.

Initiative #8: Expand opportunities for people, primarily elders, to stay in their homes or in the community longer
Notice the theme yet? The majority of Medicaid spending is for hospital and nursing home care. That’s why there’s such a focus on keeping patients from entering those institutions if they don’t need to or moving them out as quickly as possible.

This initiative is designed to save nearly $6 million dollars by narrowing the eligibility for receiving nursing home care. To qualify, a Medicaid recipient would have to need help with three Activities of Daily Living, instead of just two. (Wonk note: an activity of daily living is something like bathing, feeding yourself, going to the bathroom.) Changing the eligibility for nursing home care might mean that fewer people go into nursing homes, but it also means the state will have to boost resources for people to stay in their homes or in the community. One option is PACE (see my earlier story about that here), others have to do with creating more places for people to live in the community, like smaller residences or assisted living facilities.

Initiative #12: Make better use of Eleanor Slater Hospital
To save about $2 million dollars, this proposal would move 13 people who are currently this state-run behavioral health hospital out into a less expensive community. That would begin to make room for people who are in an even more expensive setting – an acute care hospital – to come to Eleanor Slater.

There aren’t many details yet on how this proposal would be implemented. Do they need to license new facilities as group homes? Two group homes will be closed, under a different initiative. Will it require investment up front? None of that is clear yet.

Initiative #14: Set up a place for people to sober up, besides the ER
Lawmakers have been trying to get the STOP program (Sobering Treatment Opportunity Program) off the ground for a couple of years now. But no one wanted to invest the money to buy a place or fix one up. We’re talking about a safe place for people who are drunk or high to sober up, with supervision by medical staff, without taking up beds in emergency rooms unnecessarily.

I’ve spoken with ER staff who tell me this is one of the toughest parts of their jobs: they have to care for people who come in inebriated, and some might need emergency care. But many will be back again and again for the same issue. They could be safely cared for in a special setting, and connected to addiction treatment resources while there. Maybe this program will finally get off the ground now, if approved by the General Assembly.

The plan is to establish the center on the upper level of Emmanuel House.

What’s ahead
These are just a few of the highlights, initiatives that caught my eye for their ability to have real, direct impacts on patients.

What’s next is this: the group presents its proposals to the governor, who will review them and then submit them (or some of them) as budget articles, amendments to the budget she’s already proposed. The General Assembly will take a look, and what’s approved will then go to the drawing board for details, timelines, etc. By July, the group must have a broader, long-term strategy for reforming Medicaid on the governor’s desk.