PART Three

PROVIDENCE – Outgoing R.I. Medicaid Director Ben Shaffer, in his testimony on Nov. 30 before the special legislative commission examining the future structure of R.I. EOHHS, described his agency, Medicaid, as an “insurance company” serving one-third of all Rhode Islanders, responsible for one-third of the state’s spending budget.

“Medicaid covers 342,000 Rhode Islands in every city and town, including 55 percent of all children, 28 percent of adults, and 12 percent of seniors in the state,” Shaffer told the Commission members, as he began his presentation. The numbers, Shaffer continued, “represent a 15 percent increase [in Medicaid membership] over pre-pandemic levels, a dramatic and substantial increase over the last two fiscal years, primarily in child and families and in childless adults.”

Medicaid, Shaffer said, is “fundamentally a [health] insurance product,” built on managing risk.

Currently, more than three-quarters of Rhode Islanders enrolled in Medicaid receive services through what are known as “managed care organizations,” or MCOs, which function as both health insurance companies in the private market and as MCO, contractors with the state of Rhode Island, delivering services to those receiving Medicaid.

The current three MCOs are Neighborhood Health Plan of RI, UnitedHealthcare, and Tufts Health Plan. The state is in the midst of a “re-procurement” for MCOs, which has drawn interest from Blue Cross & Blue Shield of RI as well as Magellan Health, headquartered in Phoenix, Arizona.

Currently, approximately 296,000 – or 88 percent – of all Medicaid members have their care delivered through managed care organizations, according to Shaffer. The largest membership share is “owned” by Neighborhood Health Plan of Rhode Island, with 187,000 members. The next largest share is “owned” by UnitedHealthcare, with 97,000 members, while Tufts Health Plan has the smallest share, with only 17,000 members.

But, the biggest risk that Medicaid will need to manage is what lies ahead, according to Shaffer, when the federal government decides that the “public health emergency” has ended, and the dramatic increases in enrollment during the past two years will be rescinded. Given the rapid emergence of the omicron variant, the “end” of the public health emergency may not be anytime soon.

But if the experience with UHIP, the Unified Health Infrastructure Project, renamed by the Raimondo administration communications team as R.I. Bridges, is a benchmark for what can go wrong, “planning for the restart of when the public health emergency ends,” as Shaffer put it, needs to begin now.

According to Shaffer, the 15 percent enrollment increases over the last two years in the Medicaid population are primarily tied to the cessation of enrollment and termination activities.

“This is not yet upon us,” Shaffer warned, saying that at some point Rhode Island will start to see the number of Medicaid enrollees come down. The question, as Shaffer put it, is: “How do we do that? How do we make sure that it is fair to members?”

The information flow, Shaffer continued, will have to be coordinated through DHS and through HealthSourceRI, the state’s health insurance exchange marketplace. The goal should be how to preserve the high number of 97 percent of Rhode Islanders who currently have access to health insurance.

The other big tidal wave surging toward Rhode Island’s shores when it comes to Medicaid, according to Shaffer, revolves around its antiquated data system, which deploys an ancient computer programming system, MMIS, built using 1996 technology.

The federal Centers for Medicare and Medicaid Services wants Rhode Island to move its system and split it into component parts, according to Shaffer. “We cannot afford to have this system break,” he said. It is a real opportunity, Shaffer continued, “to move the data systems into the 21st century.”

Further, Shaffer suggested that it would be better to break down the effort to transform the system into component parts, and not use just one big contractor. Stay tuned.

Watching the money flow
One of the major concerns voiced by members of the Commission, led by Sen. Louis DiPalma, concerned the flow of money to managed care organizations, and the way that they were compensated on a per member per month basis, particularly in the aftermath of COVID, when utilization went way down, yet the insurers were still guaranteed payments based on higher numbers of project utilization, which did not happen.

“In any insurance product,” Shaffer explained, “there is a risk corridor,” based upon whether you spend more and less than the amount projected. Essentially, with the managed care organizations, that risk corridor in Rhode Island is 3 percent. With any profits above 3 percent, the state will profit; with any loses higher than 3 percent, the state will ease the burden, according to Shaffer, admitting that in addition, there is a profit margin built into the rates set for managed care organizations.

In Shaffer’s view, the risk corridors protected the managed care organizations from insolvency, prior to the public health emergency caused by the COVID pandemic. “What happened during the pandemic is that utilization fell off the cliff,” he said. As a result, Shaffer continued, “Health insurers did pretty well during the pandemic.”

Sen. DiPalma wanted to know how much the state was able to recoup, but Shaffer explained that he was using hypothetical numbers.

Tanja Kubas-Meyer, the executive director of the Rhode Island Coalition for Children and Families, raised the issue about the lack of a coordinated plan to address behavioral health care for children and families, something that has been under discussion for more than five years, without any tangible results.

“We are in an enormous behavioral health crisis,” she said. “It is a combination of failures in our public behavioral health system, mostly paid for by private health insurance as well as Medicaid. There is no comprehensive system of care. We have talked about developing a comprehensive community-based treatment plan as an alternative to hospitalization since 2017, but it never went anywhere.”

Kubas-Meyer continued: “I am not seeing change, or partnerships. How do we get back to where we need to be? It will require a planning process. Is Medicaid going to serve as the center of that planning process? Is EOHHS at the center of that planning process? What is your perspective?”

Shaffer responded by saying that this was exactly the value of the current model of the Secretariat, because no one has the answer, and it may take Medicaid money and expertise to create such a coordinated system and to rebuild the system. “That is the reason to have an executive office,” Shaffer said, “to knit together these agencies. We may not always get it right.”

Shaffer further qualified his response. “As it relates to Medicaid, I would need to look at what is embedded in the rate settings. Is it more money for something we already cover, or is it truly a new covered service that we don’t provide? In this situation, it is probably both.

Exit interview
An hour into the hearing, Michael DiBiase, the former director of the R.I. Department of Administration, attempted to cut to the chase. “I am not sure that this is the right time for the question, it probably will not be as dramatic as a death-bed confession, but I know that sometimes, when people [depart] a job, they can offer [observations],” he said.

DiBiase wanted to know if, despite the fact that EOHHS seems to have its arms around all the money, they still lack the authority around enforcing accountability.

Sen. Miller, in turn, interrupted DiBiase and reframed the question, saying that the role of the Commission was to look at EOHHS and determine if it should be any different.

“When you have one division, Medicaid, which is responsible for one-third of the population who is receiving health care through it, and basically, one-third of our budget, my question is: Is Medicaid properly positioned and does it have the proper authority to do everything that it should be doing?”

Shaffer, in turn, seemed to avoid answering either DiBiase’s question or Sen. Miller’s question, saying that the current structure, with Medicaid embedded within EOHHS, was not an unusual structure, and that there was tremendous value in coordinating the constituent agencies at EOHHS, because it takes a combined approach.

Shaffer said he couldn’t envision it working in any other way than it currently did. “Effectively, what we are doing is running an insurance company, with four bosses – the Secretary, the broader executive branch, the General Assembly and CMS.”

Further, Shaffer continued, every agency is heavily dependent on Medicaid fundings [save for the R.I. Department of Health].

EOHHS Assistant Secretary Ana Novais interrupted Shaffer, saying that the Department of Health has a strong relationship with Medicaid funding, particularly around children’s health. [Shaffer responded: “That is my bad.”]

Oops, he did it again
Shaffer continued, saying: “Sometimes what is written down on paper is not how it actually works, so when you try to peel back the layers of the onion, to manage the money, it is dependent on expertise and staff.”

There are other federal grants involved in the braiding of funds, Shaffer said. “I know one topic that is near and dear to Secretary [Jones’] heart is housing. For Medicaid to solve the housing problem, you are going to be waiting a long, long time, not just because of whether or not it is a medical problem, but because CMS is saying you cannot spend money on room and board, so it ain’t happening.”

Sen. Miller took great exception to Shaffer’s response, saying: “In the last few minutes [you] indirectly lectured me on my legislative efforts for the last four years of trying to get Medicaid to apply for a waiver to get Medicaid to pay for housing for the seriously ill and chronically homeless.”

Shaffer attempted to dig his way out of the hole he had dug for himself, but Miller, once again, persisted. Miller asked: “Let me ask one more time: Is there anything that you would change within the structure of Medicaid and EOHHS to be more effective in the relationshisp with other departments?”

After a long pause, Shaffer replied: “You really can’t do anything at Medicaid without policy staff to understand it, finance staff to see that those rates are kept up to date, and legal and project management staff to implement it…

Sen. Miller interrupted Shaffer. “Does that mean [you need to hire] more consultants to cover that work? Or is there the need for more FTEs, or that staffing should be restructured?”

Shaffer responded: “I think that is a yes and a yes. When we did the substance use residential rate review, you want to have an actuary doing that.”

Like so many of Shaffer’s answers to Sen. Miller’s questions and to others on the Commission during the hearing, there appeared to be a distinct gap between the rationale given to explain policy decisions and the ability to take action to find a solution, in ConvergenceRI’s opinion.

And, also, a full-throated disdain for engaging in a partnership with the legislative process – as well as having a healthy respect for the expertise of legislators.