Delivery of Care

Next stop: Wonkville

ConvergenceRI sits down with Patrick Tigue, director of the R.I. Medicaid office, in an in-depth interview talking about budgets, co-pays, accountable entities and Medicaid reinvention

Photo by Richard Asinof

Patrick Tigue, the director of the R.I. Medicaid office.

By Richard Asinof
Posted 3/12/18
An in-depth interview with Patrick Tigue, the director of the R.I. Medicaid office, offers some insights into the murky waters of policy decisions around budget recommendations in a time of budget shortfalls.
Will the R.I. General Assembly follow through on the budget recommendation to cut more than $10 million from the Integrated Care Initiative because of program failures to achieve the desired outcomes under the management by Neighborhood Health Plan? How will the proposed co-pays for Medicaid beneficiaries fare with legislators? What kinds of better data are needed to make evidence-based decisions around future investments in nursing home care? What is the status of accountable entities moving forward?
One of the divisive political arguments being played out here in Rhode Island and in Washington, D.C., is the idea that there are some folks who are “undeserving” of health care, with the goal of adding a work requirement to receiving Medicaid benefits as a way to weed out those who are “undeserving.”
The sad truth is that many who received Medicaid benefits are employed in low-paying jobs, where the employer does not offer health insurance benefits. Many of those are individuals between the ages of 40 and 65, who find themselves frozen out of the opportunities for good-paying jobs, particularly as the retail economy fades.
The tendency is to blame those on Medicaid for the high costs of medical care, rather than looking to rein in medical costs for drugs, for hospital care, for insurance premiums.

PROVIDENCE – There is no practical way to avoid the murky waters and weeds when making a deep dive into the sea of complexity surrounding Medicaid policies and practices in Rhode Island.

For some of the facts, there is a general consensus:

• Spending on Medicaid is huge and growing. At approximately $2.4 billion in spending in 2017, Medicaid represented about one-quarter of the state’s budget in 2017.

There were approximately 307,000 enrolled as members as of March of 2017, providing 30 percent of all Rhode Islanders with health insurance coverage.

The federal share of the Medicaid budget was 57 percent in 2016.

Reimbursements from the federal health insurance programs, Medicaid and Medicare, make up the bulk of income for hospitals in Rhode Island, bringing in between 60 and 75 percent of the total revenue, depending on the payer mix.

In Rhode Island, most of the money spent on Medicaid recipients is for seniors in nursing home care.

[One data point that is not known is how many relatively well-off seniors in Rhode Island set up trust agreements and divest themselves of financial resources so that they can qualify for Medicaid coverage. Or, what is the estimated commercial value to the legal industry engaged in such practices?]

At the same time, there is no consensus about how to control the growth in Medicaid spending. It is a political football that often divides along party lines

Points of contention
ConvergenceRI sat down recently with Patrick Tigue, the director of the R.I. Medicaid office, to ask about a number of policy issues related to specific programs, most of which involve the administration of programs that are not part of everyday vernacular.

Talking about Medicaid is complex, requiring traveling down a path overgrown with thickets of policies and a multitude of political thorns, lobbying brambles and unexplained decisions apparently made behind closed doors.

Take, for instance, Rhody Health Options, first introduced in 2013 as the first phase on an Integrated Care Initiative, with the promise that the management skills provided by Neighborhood Health Plan, which was awarded a sole-sourced contract, would create budget savings because it would decrease the number of people who ended up in nursing homes, transitioning folks back into the community.

However, things didn’t work out as planned, the projected outcomes were never achieved. But efforts to rein in costs and reduce the budget failed last year., despite recommendations by R.I. EOHHS. The current budget proposal by Gov. Gina Raimondo asks again for budget cuts – some $10 million – and a redesign of the program.

A similar complex part of the Reinvention of Medicaid is the creation of accountable entities to better coordinate and integrate care for the managed Medicaid population. The pilot programs for accountable entities, first begun in 2016, are about to become certified later this spring. The actual mechanics of how accountable entities work, and how shared savings are distributed, still remain a bit cloudy.

Finally, in a difficult budget year, the Medicaid office has proposed co-pays for Medicaid beneficiaries for some of the care provided, which still has to be approved by the R.I. General Assembly.

Here is the ConvergenceRI interview with Patrick Tigue, the director of the R.I. Medicaid office, attempting to better understand the moving parts in managing the state’s Medicaid program.

ConvergenceRI: How does the entrance of Tufts Health Plan as the third managed care organization, joining Neighborhood Health Plan and UnitedHealthcare, add value for members of Medicaid? It’s not as if Medicaid enrollees are comparing the prices being offered by the competing plans.
It is also not clear that Medicaid members will be motivated in making a change in provider networks. In addition, adding a new managed care organization to the mix adds a significant amount of extra administrative burden to the folks providing the care, such as community health centers.
TIGUE:
My frame is less about what Tufts specifically adds to the marketplace, but rather my concern about having sufficient choice for Medicaid beneficiaries.

For me, as the Medicaid director for Rhode Island, as a starting point, regardless of who the managed care organizations [MCOs] may be, there is, for me, the need to achieve the right balance between administrative simplicity and consumer choice.

First of all, it’s a Center for Medicare and Medicaid Services’ requirement that Medicaid beneficiaries have choice. From a strategic standpoint for the program, only having two MCOs, while certainly satisfying the minimum requirement, for me, it’s not adequate.

The reason for that is: it’s really important [to have more than two MCOs participating], because if one of our MCOs were to choose to leave the market, I don’t want to be left in a position where we are down to the bare minimum.

I want to have sufficient flexibility, so that we always know that we have at least two MCOs [serving our marketplace.]

So, it really gives us the ability to negotiate effectively with all three MCOs, by having them compete against one another on the basis of quality, to ensure that they serve people well. For me, three is the right balance, between having enough choice but not so much so that it is overwhelming.

ConvergenceRI: What is happening with the management of the Integrated Care Initiative, a program to manage care for those dually eligible Rhode Islanders receiving benefits from both Medicaid and Medicare, originally known as Rhody Health Options when the first phase was rolled out in October of 2013, focused on Medicaid.

That was a sole-sourced contract with Neighborhood Health Plan of Rhode Island, with no competition.

The outcomes predicted for the program, that it would move some 3,000 residents currently residing in nursing homes back into the community, have never materialized.

In November of 2016, R.I. EOHHS initially recommended, in a budget preparation document for FY 2018 spending, having the R.I. Medicaid Office take over management of the program from Neighborhood Health Plan, with the elimination of some $12.2 million in administrative fees paid to Neighborhood. The final reduction in the FY 2018 budget was $9.5 million, I believe.

But that recommended cut was never made by the R.I. General Assembly.

What is the status of the program in the FY2019? Are similar cuts being recommended? Is there a comprehensive analysis that has been conducted about the outcomes achieved by the program?
TIGUE:
What I would say in response to your questions, specifically, is that it actually speaks to what I was talking about in regard to the benefits of having multiple MCOs in a given program. For all of our other lines of business in managed care, we have Tufts, UnitedHealthcare and Neighborhood, all competing for membership.

For that line of business [as part of the Integrated Care Initiative] to serve our dually eligible population, and this was prior to me becoming director [of Medicaid], Neighborhood Health Plan was the only MCO that chose to bid…

ConvergenceRI: [interrupting] Making them a sole-sourced contract?
TIGUE:
My understanding was that they were the only bidder, in fact. And the contract was awarded to them because they met the minimum requirements.

In an ideal world, in all of our lines of business, including that one [for the Integrated Care Initiative], we would have two to three MCOs competing, so that you can then evaluate performance across the MCOs, and to ensure that we are getting the value out of the performance.

But to your point, more specifically, Richard, we did propose cuts in this year’s budget, as well, to reform the program.

ConvergenceRI: It’s in the current budget proposal by the Governor, for FY 2019?
TIGUE:
Yes, it’s around the same number, approximately $9 million in cuts.

[Editor's note: The actual item from the executive summary of the proposed budget for R.I. EOHHS recommending the budget cut reads: “Dual Eligible and Long-Term Services and Supports (LTSS) Redesign – ($10,297,970). The Governor recommends the restructuring of the delivery system for individuals who have Medicare and Medicaid coverage or Medicaid coverage due to a disability, chronic condition or require an institutional level of care and receive LTSS. The redesign will achieve a more cost-effective transitional managed arrangement as a foundation for new innovative permanent arrangement to be developed for SFY 2020.”]

But what I want to be clear about, what we’ve proposed, is the need to look at that product line and say, fundamentally, the arrangement that we have, it is not working effectively, and we think we know enough today to say that we need to move into some kind of transitional management arrangement that is either renegotiating our current contract with Neighborhood, or looking at other options.

ConvergenceRI: Wouldn’t you do a better job managing that program, which is what you used to do, than giving it back to Neighborhood?
TIGUE:
The budget proposals will be very concrete, Richard, and we’re happy to follow up on it with you.

Under the [redesigned] plan, the Medicaid office would take the risk back, and pay the medical claims, and then we would contract with Neighborhood to do the just the care management services and the customer service-facing functions.

We think that it will be a balance between ensuring that people are still being taken care of but also ensuring that the state gets the financial benefits from paying medical claims.

I will be testifying at committee hearings in the Senate and the House about this proposal.

ConvergenceRI: I’ve been covering this issue since my very first issue, when ConvergenceRI was launched in September of 2013, raising questions about whether the outcome expectations were realistic around the numbers who would likely be transitioned from nursing homes back to the community.

A similar kind of cost assumption has been built into the projections around the Reinvention of Medicaid: that there are savings that can be achieved by keeping people out of nursing homes by providing increased coordinated care in their homes.

I have yet to see the budget numbers crunched for what are the costs of providing 24/7 care in someone’s home versus care in the a nursing home, in terms of projected cost savings, for someone with Alzheimer’s or dementia? Long-term care in a nursing home may prove to be more effective and efficient.
TIGUE:
What I would say, Richard, is that one of our four principles that your are alluding to, that were part of the Working Group To Reinvent Medicaid, is to ensure that vulnerable Rhode Islanders are in the least restrictive setting possible.

What I think is really important, and I would say it slightly differently: it’s not saying that no Rhode Islander should be in a nursing home; it should be that every person is in the care setting where they can get the services they need.

So, there may be cases where nursing home care is the most appropriate, most cost-effective, safe, high-quality setting.

I think our goal is simply to ensure that anyone who can be served in the community effectively, and wants to be served in the community, can be.

That is the more targeted, sophisticated approach that needs to happen. And that is a goal we’re going to continue to have over the long-term.

ConvergenceRI: Does the state have a database, a census, about who is currently residing in nursing homes or alternative living facilities, compared to those living at home? Is there a way to determine what the demographics are for the people in nursing homes, what are their medical conditions, using de-identified data, to better understand what the data tells us before making policy decisions?

For instances, according to recent surveys, Rhode Island has one of the largest ratio of residents who are considered “old old” – over 85 years of age – in the country. Would it make sense for Medicaid to have a better grasp of the data about the people you are paying for?
TIGUE:
I don’t know if we have that data comprehensively. I can tell you, Richard, that the state [is interested] in making investments in building that data to inform those efforts. It is my expectation, and we are making every effort we can, to have our decisions be more data driven.

Where we have the data, we certainly use it. We also recognize that there are gaps, so that over time, we going to try to have our decisions rooted in the best data that we have available.

ConvergenceRI: You cannot have an evidence-based decision….
TIGUE:
[interrupting] without the underlying data.

ConvergenceRI: In terms of the current budget proposals to add co-pays for Medicaid recipients, what was the rationale behind that decision?
TIGUE:
We have proposed a suite of co-pays for Medicaid beneficiaries that we thought were responsible.

Behavioral health services, we are exempting those from co-pays. We have a strong concern about behavioral health access in the state.

Secondly, we are exempting from the proposal any individuals that have disability determinations from the federal or state government. We recognize that for this population, it is not appropriate to charge cost-sharing to them.

And, federal rules prohibit cost-sharing for children as well.

We tried very hard to structure the co-pays so that it wouldn’t be about financial liability but as a way to add positive policy value.

Under the proposal, for instance, there would be an $8 co-pay for emergency room visits, but only for care deemed to be non-emergent, that could have been seen in another setting.

For primary care visits that are preventive, we do not charge a co-pay. Instead, we put them on non-preventative office visits, recognizing that we want to put the emphasis on prevention – similar to what has been done in the commercial health insurance market under the Affordable Care Act.

Those are some examples of how we’re trying to add positive policy value to the co-pays.

ConvergenceRI: How does the policy of co-pays fit for those who go to the emergency room seeking care for the “impression” of alcohol intoxication? Will that be considered emergency care? Because alcohol intoxication is one of the leading “impressions” for people using EMS services for transport to hospital emergency rooms in Rhode Island?
TIGUE:
I appreciate the feedback. Something I think that is really important and that I’m really proud of, is that we have had a really difficult budget year. We had to put forth a responsible budget to close a very large deficit. I’m really proud that, for Medicaid, we did not propose any cuts to eligibility or to benefits.

It certainly required that other, hard, responsible choices be made. But that was something really important to us, that we did not do either of those things [cutting eligibility or benefits]. But sometimes it requires us to make other difficult choices.

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