Delivery of Care

Changing of the guard

Virginia Burke retires after 11 years as president and CEO of the Rhode Island Health Care Association; Scott Fraser has been hired as her successor

Photo by Richard Asinof

Virginia Burke, the outgoing president and CEO of the Rhode Island Health Care Association.

By Richard Asinof
Posted 12/10/18
Virginia Burke, the outgoing president and CEO of the R.I. Health Care Association, shared her valuable insights about what really happened with a series of government-made policy disasters, including Rhody Health Options, the Reinvention of Medicaid and UHIP.
Who will commission the public health case study about the disaster known as UHIP, to prevent it from ever happening again? What will happen when the Deloitte contract expires in March of 2019? Would the R.I. General Assembly consider conducting an oversight hearing that would be an opportunity to conduct an exit interview with Virginia Burke, allowing her to share her knowledge so that it becomes part of the public record? Is the idea that investing in health IT as a way to cut down costs in managing Medicaid be considered a failed program? As a political litmus test, should the expansion of the managed Medicaid population be seen as a sign of economic strength or weakness?
In the Modern Healthcare online issue published on Dec. 8, one of the sponsored content ads attached to a story with the headline, “Drug overdoses, suicide taking more lives, is from Deloitte, promoting “Strategies for stemming the opioid epidemic,” with the subhead, “How data analytics can help health plans and pharmacy benefit managers chart their course.”
The question is: why would anyone familiar with the data analytics mess that is the Unified Health Infrastructure Project in Rhode Island consider hiring Deloitte to conduct data analytics services around the opioid epidemic?

WARWICK – In a small office near T.F. Greene Airport, Virginia Burke is busy at her desk, preparing to turn over the reins to Scott Fraser as president and CEO of the Rhode Island Health Care Association, retiring at the end of the month after 11 years on the job. The Association represents the interests of the skilled nursing care community, including their residents, to government, business leaders, and the general public.

Hanging on her wall, there is a framed story from The Providence Business News from May of 2009, highlighting her achievements as a businesswoman in Rhode Island. It seemed to be from a galaxy long ago and far way.

If Burke’s first five years on the job were often challenging, then the last six have been filled with a series of government-made quagmires.

First there was the hurried launch in the fall of 2013 of Rhody Health Options, the first phase of what was known as the Integrated Care Initiative. Finally, after five years of negligible outcomes, the R.I. General Assembly in 2018 pulled the plug on the program, which had been managed by Neighborhood Health Plan of Rhode Island, through which the health plan had received as much as $60 million in administrative fees during that time period.

Next, in 2015, was the plan to reform Medicaid known as Reinventing Medicaid, an initiative promoted by Gov. Gina Raimondo, which served mostly as a long-term rate cute for nursing homes.

Perhaps the worst government-made disaster was the botched launch of the Unified Health Infrastructure Project in 2016, after numerous delays. The costs have risen to more than $640 million, and the problems are still ongoing, despite porgress in processing applications.. The reconciliation of interim payments made to nursing homes to stave off bankruptcies because of the government’s inability to make Medicaid eligibility determinations within 90 days remains a looming problem.

In each of these government-made problems, Virginia Burke was an outspoken critic, warning of problems, attempting to engage with government officials, often courageously standing up and challenging what was being planned.

With UHIP, Burke likened it to the Challenger explosion in 1986, when despite warnings from an engineer that the cold temperatures could put the mission in jeopardy, no one listened.

“It was sort of like the Challenger explosion,” Burke said. “There was one Morton Thiokol engineer, who kept saying: no, it’s too cold for a launch, and the O-rings could not withstand that kind of low temperature.”

But, Burke continued, “NASA had been shamed several times about having to cancel the launch, and they said: nope, we’re going ahead with it.”

This was a similar kind of denial, Burke explained. “UHIP had these cost overruns. And, it had been delayed a couple of times. And, I think they said: Let’s just hold our noses and [do it].”

Burke believes that the story of UHIP would make an excellent case study of what can go wrong with efforts to force policy decisions around health care, and the risks of pushing programs while shutting out stakeholders. But she was emphatic that she had no desire to write it.

Here is an exit interview with Virginia Burke, the outgoing president and CEO of the Rhode Island Health Care Association, sharing her thoughts about navigating through a series of man-made government policy disasters in Rhode Island.

ConvergenceRI: Is it ironic that both you and [R.I. EOHHS Secretary] Eric Beane are leaving at the same time?
I decided to go first. And then he announced he was leaving. When he did, I sent him a message, saying [with humor]: “Well, that’s it. If you’re leaving, I’m leaving, too.” I know he laughed; but I actually went first.

ConvergenceRI: It’s been a turbulent time on the job for you for many years.
Eleven years for me here.

ConvergenceRI: I don’t know if the first six years were as turbulent as the last five…
No, they weren’t. I thought they were, when the Global Waiver [for Medicaid] came around. I was concerned about it.

ConvergenceRI: In many ways, the problems UHIP are still going on, many of the issues are still not resolved.

ConvergenceRI: How would you frame the entire discussion about what’s happened?
I think the decision to launch UHIP when it happened should become a case study, because it would be awful to have it repeated.

I think, after reflection, part of the problem was this: we were [overmatched] by the people from Deloitte; they kept saying the software was working fine. Maybe we didn’t have the expertise here to realize that wasn’t true.

The second thing was that the secretary of R.I. EOHHS at the time, Elizabeth Roberts, just wasn’t interested in hearing anything from the provider side about our fears and concerns. They were legitimate concerns.

When the decision was made to lay off all the long-term care eligibility workers, I didn’t get that at all. That made so little sense. Even if we had highly functioning software, the implementation without those people [could have been predicted] to become catastrophic.

ConvergenceRI: From what I’ve been able to piece together, it was not just you on the outside, but there were many people on the inside, who were also issuing strong warnings.
That is my understanding as well.

ConvergenceRI: And those warnings were effectively blocked.
Long-term care eligibility is so much more complex than say, food stamp eligibility. It should not have been put in there until everything else was working, if at all.

There is human analysis that has to go into whether or not you are eligible for long-term care coverage.

ConvergenceRI: One of the outcomes of the UHIP debacle is that the once strong locally owned industry sector of skilled nursing facilities has become unstable. Is that accurate?

ConvergenceRI: Can you talk a little bit about that and what you see is happening?
Year after year our funding has been frozen or cut. That has taken an inevitable toll.

UHIP obviously was a major blow, but before that, there was the decision to place our residents into a managed care program that added great expense.

ConvergenceRI: Rhody Health Options?
Right. It added great expenses; millions of dollars. It had no value to our residents. And, it screwed up the claims processing process. I’m talking about for the nursing facility sector; it may have had value elsewhere but it made no sense for us.

Every time I talk about that, I have to hasten to say that Neighborhood Health Plan [of Rhode Island] does great work in its community health centers. But they were not prepared for long-term care. Their inability to process our bills was very de-stabilizing, it caused a lot of cash flow problems. It did nothing for the nursing home residents enrolled in it.

ConvergenceRI: Is there a final figure for how much money that may have been wasted in administrative expenses before the plug got pulled?
It was probably $15 million in 2017, and it started in 2014, you can do the math.

ConvergenceRI: Four years at approximately $15 is $60 million?

ConvergenceRI: My sense is that there is much more money involved in actual costs.
That may well be.

Some of it went to administrative overhead for processing nursing home claims. And that money is just unconscionable; it was wasted. HP [the state system] was already processing our claims, doing it better and cheaper.

And, I assume some of the money went to other Medicaid programs that Neighborhood was managing. And, you might say that’s fine, if the kids need more money or the disabled need more money. But it’s not fine, because it’s Medicaid money, and it needs to be transparent and accountable, if you’re diverting it away from nursing homes and putting it into, say, community health centers, because you are booking it as a nursing home expense.

So, you’re inflating what you’re actually expending on nursing homes, and you are understating what you are spending on community health care. I think the right thing to do is, if the community health centers need more money, then increase the amount you’re paying community health centers. Don’t put the nursing homes through this huge administrative burden just to divert the flow of funding to other needs.

ConvergenceRI: Why did it take so long, in your opinion, for the General Assembly to understand that the program did not make sense?
Rhody Health Options never made any sense to me. And, it wasn’t even a conflict issue. If you look at it, on the face of it, the way that managed care works, it is cutting out unneeded services.

Such as duplicative lab tests, unnecessary surgeries, finding cheaper pills that have the same effect. And, it was clear from day one that Neighborhood wasn’t going to be able to do any of that. All of those services are covered by the Medicare program; all Neighborhood was doing through managing Medicaid was covering was the nursing home stay. And, they had no way to cut back on the nursing home stay.

First of all, the state maintained the function of deciding who was clinically eligible for care. And, it is not a service you can cut back on, and say, you can have 20 hours a day and not 24, or five days a week, not seven.

The added 7 or 8 percent in administrative fees: what was that for? What were they going to be able to do? The savings from cutting out unnecessary services were supposed to cover the  expense of the administrative fee. But here the system was set up so that Neighborhood had no control over tests, medications, procedures, etc.; all the areas where you can find typically find savings were controlled by Medicare.

ConvergenceRI: Whoever writes the “case study” will have to spend some time on a number of people who appear to be responsible for bad decision-making. There is also the role that research may have played in supporting those decisions, such as the research published by Vincent Mor.
The thing with Vince Mor was that he wrote a piece about the prospects for transitioning residents back to the community. And, any time there was a chance to achieve Medicaid savings, it was, understandably, something that R.I. EOHHS was going to jump on.

They read the research, and they read what they wanted to see in it, but they kind of ignored – they are human – what they didn’t want to see.

His findings were that we had this low-care population in our facilities that could manage at home with help.

What he didn’t look at was dementia: the fact you could have dementia and not be safe being left alone, but people with dementia were classified as part of the low-care population.

What he also didn’t look at was the cost of providing 24/7 care in home care settings.

The last thing that people overlooked in his research was that he had two definitions of low-care: a broad definition and a narrow definition.

If you look at the narrow definition, we had one of the lowest rates of low care in the country. But, if you looked at the broad definition, we had maybe the third highest. Everyone kind of breezed right past that.

ConvergenceRI: Was it wishful thinking?
They didn’t take a measured look at it. They wanted us to have a lot of residents that could be moved back to the community, because then they figured that they could save money.

But the fact is, the least expensive way to take care of people who can’t be safely left alone because they are too frail, or because they are too afflicted by dementia, is nursing center care.

ConvergenceRI: The next big whammy to hit was the reinvention of Medicaid.
When Elizabeth Roberts first became secretary, I met with her individually. And, she told me that we needed to make some drastic changes to the program, and I agreed fully.

Then she said: we have the highest per enrollee cost in the country.

I responded, saying: That doesn’t mean we are expending improperly, that just means our pool of enrollees has more of the elderly and disabled than other states.

She said no, going by eligibility group, we spend more than other states on the children, on the disabled and on the elderly.

And, I knew that was incorrect. I had seen a lot of data. But I also knew that she wasn’t going to take my word for it.

So, I said: I’m not sure that’s correct. I went back to my office, did a few hours of research, and looked at every single study I could find. I wasn’t selective at all; anybody that published data on this, I looked at it.

And there was no study showing us spending more on elderly than other states do. We spent slightly more because of geographic wage differences and because of the higher acuity of our elderly – we have more, older elderly than other states.

So, I put it all together in a binder, with the simple explanations, and with every single statement I made supported by a tab in the binder. Roberts said thank you very much.

A couple of weeks later, and the Medicaid Reinvention is launched, and the Powerpoint for the reinvention group had, as one of the first things, that we spend 67 percent more on our elderly enrollees than other states.

While we could always get a meeting with Secretary Roberts, we couldn’t seem to get her attention to what we were saying. It’s true that her door was always open.

The same thing happened when we explaining that you can’t keep pulling all the Medicaid eligibility workers from doing their work, in order to work on UHIP, because there was this growing number of pending cases.

And the response was, basically, UHIP is coming soon, and that will take care of all of it.

And then, there was the laying off of people a couple of weeks before they launched UHIP.

ConvergenceRI: I remember the news conference when those layoffs were announced.
I think it was actually Jennifer Wood that I talked with about the laying off of workers, warning her that it was guaranteeing the launch of UHIP was going to be catastrophic.

It was just so frustrating. I know that she is an intelligent person, a person of integrity.

ConvergenceRI: The contract with Deloitte ends in March of 2019. What happens next?
I want to add to what I said before, that there was a huge contrast with [Elizabeth Robert’s] successor, Eric Beane. He was interested, he listened, I’m not saying that everyone has to agree with me all the time, but when I bring you data, that’s not from me, that’s from an objective source, like Kaiser Foundation, or the U.S. Census Bureau, you need to consider that.

And, Eric Beane did, and although we disagreed on several things, he didn’t shut dissenting opinions out.

But what happens next? The state needs to get federal matching funds for the interim payments that they’ve made to nursing homes for the past two years.

And, they can’t get them until the applicant has been determined eligible in accordance with the state plan.

They have been paying us these interim payments to keep the cash flow going and to keep the doors open. But eventually it all has to be reconciled.

For each case where they have been paying interim payments, when they will finally accomplishment the eligibility determination, and if the person is approved, they then pay for the person under the regular method, and they want to recoup the interim payments. It sounds fairly simple, but there are lots of issues there.

ConvergenceRI: What happens if the person died in between?
That’s a big one; also if someone has been discharged. And I think the biggest one is the fact that there is a patient co-pay for nursing home care.

When they sent out a notice that so-and-so who was admitted in 2017 is approved for Medicaid coverage from April onward, they will pay the facility for April onward, but deducting the patient share.

Well, we can’t go back to the patient now and say: OK, well, you owed us a $1,000 a month for the last 15 months, so we need you to pay $15,000. These are people on Medicaid. They don’t have money, and that’s why the facilities can’t collect that money back.

I don’t think that’s fair. I don’t think it’s fair to make the facilities pay for the state’s mistakes. Was that clear?

ConvergenceRI: With all your knowledge on this, can you write the case study, Will you write the book on this?
Absolutely not! I am so tired of this issue. I really think somebody should, but it shouldn’t be me.

ConvergenceRI: What do you plan to do now, in retirement?
I’m going to actually be staying on a very part-time basis to consult through the 2019 legislative session.

So the new guy, Scott Fraser, doesn’t get swamped. There are a lot of issues that will take time to understand.

ConvergenceRI: So, is it done deal? Your replacement has been hired.
Yes, We are sending out a press release, hopefully today. I’m very excited about Scott coming on board. He’s knowledgeable and conscientious, and I’m sure I’m leaving things in good hands.

ConvergenceRI: If you had the opportunity to sit down with Gov. Gina Raimondo for an exit interview, what would you tell her?
[laughing] Do whatever it takes to get Eric Beane back.

I think I’d let her know that the nursing homes we have in Rhode Island are [doing a good job.] We get paid no more than any one else, but our quality has been outstanding. And that is now very much threatened.

We’ve had sequential rate freezes or funding cuts for the past several years and it’s taking a toll. We are losing local owners and selling to national chains.

I think we’ve been lucky so far, we have some good chains here, but there are some bad ones out there, and you only need to look north to Massachusetts to see what happens somebody comes in and provides cut-rate nursing home care.

Replacing the local corner store with the Walmart, you’ll get lower prices, and maybe from a politicians view, that would be a very good thing. Lower prices for screwdrivers and sweatshirts is one thing, but here we’re talking about very vulnerable elderly.

Local ownership is important. And I don’t mean to malign the chains. Some of them do a very good job through the savings they get through efficiencies. But, without local ownership, you’ve got money flowing out of state that should be staying in state. You’re at risk of having less accountable owners when it’s no longer a neighbor you know, who your kids maybe played softball with. If they don’t know how to drink Dels, do you want them taking care of your grandmother?

ConvergenceRI: What do legislators need to know more about when it comes to nursing homes?
With the home and community based services, that sector was underfunded for years, and I’m glad that we’ve nourished it a bit.

But I worry about that it was done at the cost of nursing home funding, because you are taking care of two different populations.

People don’t come into a nursing home because they want to.

With respect to the progressives, one thing I have a great deal of sympathy with is the people who do the bedside care, the certified nursing assistants or CNAs, they should definitely be making more money. They do hard work, challenging work, and so many of them are so good at what they do, they really care, they get attached to their patients, and when you have someone like that, you’d like to pay them more money. And keep them.

But, we only have for revenues what the state pays for Medicaid. We can’t charge more, either with Medicaid or Medicare, in paying the bills. Our margins are generally less than 1 percent, and nowadays, many facilities are losing money on an annual basis.

Last session, for example, a state senator introduced a bill, saying that our workers should get time and a half on Sundays, because everyone else does in other settings in health care.

I testified in response that we don’t have any other source of extra money, that the administrators are expert at balancing things and getting the staffing right.

If all of sudden you say that everyone working on Sunday gets time and half, then you have take money [from those who] are working on Wednesdays, Thursday and Fridays.

And then, everybody is going to want to work on Sunday and refuse to work on Saturdays.

If you guys would pay for it, we’re in, I told her.

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