PROVIDENCE – Wow. Wow. Wow. In its budget recommendation for FY 2018 submitted by the R.I. Executive Office of Health and Human Services to Gov. Gina Raimondo, under Item 10, “Healthy Aging in the Community,” the agency recommends cutting $35 million from Rhody Health Options in administrative payments to Neighborhood Health Plan of Rhode Island, and moving the seniors covered by Medicaid that were part of the Integrative Care Initiative back into a Medicaid fee-for-service plan to be run by the state.

For the past three years, under the Rhody Health Options initiative, the state has been paying millions in administrative fees to Neighborhood Health Plan of Rhode Island, to manage the care provided to Medicaid-covered seniors, in order to reduce nursing home use. 

The reason given: “The significant investments by Medicaid into the Integrated Care Initiative to date have had limited impact on reducing nursing home use.” Wow. Wow. Wow.

Further, under the proposed FY 2018 budget, the agency wants to repurpose a portion of the saved administrative costs, some $10 million, to develop home and community-based options “that can serve as an alternative to expensive nursing facility based care.”

Translated, the Rhody Health Options program has proven to be a costly failure, as measured by the outcomes. At the time of its launch in 2013, the state projected that savings were to be achieved by the projected transition of some 3,000 patients currently in nursing homes back into the community.

It proved to be wishful thinking – because those large numbers of promised transitions never materialized.

• In 2015, the total number of transitions achieved under the direct auspices of Neighborhood Health Plan [and not under other pre-existing programs] was 36, according to the state’s public records. That is correct: 36 transitions.

• Even more damning, the total number of transitions from nursing facilities back to the community were actually lower than the transitions achieved, compared with previous programs underway before Neighborhood Health Plan became involved, according to state’s public records.

Yet, for the last three years, the R.I. Executive Office of Health and Human Services had insisted that Rhody Health Options [the first phase of the larger Integrated Care Initiative], had been successful, singing its praises at hearings and in interviews – and also singing the praises of Neighborhood Health Plan of Rhode Island for the way it had managed the program.

Now, all that evocation of success has apparently fallen off the budgetary cliff. Why? What caused the change of heart? The reasons seem to reflect a budgetary reality: cracks are now appearing in the financial foundation supporting the reinvention of Medicaid in which the numbers and results do not add up.

Another big question: If $35 million is the recommended cut in the proposed FY 2018 budget in administrative costs paid to Neighborhood Health Plan, does that mean that a total of some $140 million in taxpayer dollars were paid out over the last four years to Neighborhood Health Plan for a failed program?

The rent comes due
Since its inaugural issue in September of 2013, ConvergenceRI has frequently covered the controversial rollout of Rhody Health Options. [See link to ConvergenceRI stories below.]

Among the questions raised:

• The size of the administration fee paid to Neighborhood Health Plan for its work, given that the touted skilled managed care capability of Neighborhood Health Plan was going to be limited. Most enrollees had the majority of their health care services covered by Medicare, leaving Neighborhood with control over their long term care but nothing else. This meant Neighborhood had no opportunity to create efficiencies, eliminate duplication of services, or coordinate care.

Once a determination of care was made, many of the residents of nursing facilities were not candidates to move back into the community.

• The confusing manner in which dually eligible nursing facility residents were enrolled, which enrolled them in Rhody Health Options unless they chose to opt out.

• The reality of the demographics of Rhode Island – the state leads the nation in the number of “old old,” people who are 85 years and older. And, the fact that the frailer, older residents of Rhode Island are much more susceptible to the ravages of Alzheimer’s, Parkinson’s, dementia and the full flowering of chronic diseases such diabetes and heart disease, requiring constant 24/7 care.

Some background
The first phase of the Integrated Care Initiative, known as Rhody Health Options, had been launched three years ago in October 2013, under then R.I. EOHHS Secretary Steven Costantino, as an initial partnership between Neighborhood Health Plan and the state’s Medicaid office as a way to provide managed care to the dually eligible population for both Medicaid and Medicare.

The expectation was the two-legged stool, featuring the state and Neighborhood Health Plan, would soon become more balanced as a three-legged stool that included the federal Medicare program, the state Medicaid program, and Neighborhood.

However, the signing of such a three-way contract, preceded by a Memo of Understanding, took more than two years to be completed. The new three-way contract was finally announced in a news release on April 28, 2016.

Why did it take that long? The problem, according to numerous sources, was negotiations around how much money Medicare would take off the top of the contract.

The news release announcing the new agreement occurred on the exact same day that Elizabeth Roberts, secretary of R.I. EOHHS, was testifying before the R.I. Senate Finance Committee about the FY2016 supplemental budget and the proposed FY2017 budget.

‘It’s a nightmare’
At that same hearing, Gail Sheahan, the owner and operator of the Consistent Care agency in Jamestown, who has run her business for more than 24 years and been a nurse for 32 years, did not hold back her harsh assessment of Phase One of Rhody Health Options and its failings.

Sheahan said she was upset by Roberts’ testimony about how “great” the program [dubbed Phase One of the Integrated Care Initiative by R.I. EOHHS] was going.

“I sat here and heard about Phase One, and how great Phase One was going, that [there] had been a few bumps in the road in Phase One,” Sheahan testified.

And now, Sheahan continued, the state is going to flip the switch and think that everything’s going to work great under Phase Two [now dubbed “Integrity” by EOHHS].

“It’s not going to happen. Phase One is so messed up, you cannot believe it; it’s a nightmare,” describing the lack of coordination of care between agencies, the state and Neighborhood Health Plan. “The right hand doesn’t know what the left hand is doing.”

I have no idea, she testified, “why they are going to roll out Phase Two when Phase One was horrible.”

Further, she warned the members of the Senate Finance Committee: “They are selling you a bad bill of goods, people.”

Image vs. reality
The decision to drop Rhody Health Options and move back to a fee-for-service Medicaid program, eliminating $35 million in administrative fees to Neighborhood Health Plan, comes at a difficult time for Secretary Elizabeth Roberts at R.I. EOHHS and for Gov. Gina Raimondo, both of whose credibility has suffered as a result of glitches and communications problems in the rollout of the $364 million Unified Health Infrastructure Project.

When the three-way contact was first announced in the April 28 news release, Raimondo said: “Rhode Island continues to play a leading role nationally in building healthier communities and sparking innovation across our health care system.” Through this new initiative, she continued, “We are improving access to high-quality care and creating a system that is more efficient, coordinated, and responsive to Rhode Islanders’ needs.”

Sounds very convincing. But how does that square with the fact that six months later, it is being recommended that Medicaid return to a fee-for-service program managed by the state and $35 million in administrative fees for Neighborhood Health Plan of Rhode Island be eliminated? Good question.

Pushing to raise wages for direct care workers
On Friday, Oct. 28, state Sen. Louis P. DiPalma, first vice chairman of the Senate Finance Committee, held a news conference at West Bay Residential Services to champion efforts to include in the FY 2018 budget a call to increase wages paid to direct care workers who provide services to individuals with intellectual or developmental disabilities to $15 an hour in five years, and tying the pay rate to inflation thereafter.

Roberts wrote a letter in support of DiPalma’s proposal, saying that both she and Raimondo “enthusiastically support your proposal to implement multi-year wage increases” for direct care workers.

In the concluding paragraph of the letter, Roberts, saying she was speaking on behalf of Raimondo, praised DiPalma for continuing to support “our statewide rebalancing effort to reduce over-reliance on institutional, congregate care settings by investing in home- and community-based services.”

A number of Senate staffers attending the event, when asked by ConvergenceRI after the news conference, said that they were not yet aware of the proposed changes in the R.I. EOHHS budget that the agency had submitted, nor the fact that the agency was recommending a cut of $35 million in administrative fees to Neighborhood Health Plan of R.I. Wow. Wow. Wow.