Advocates fear change in state health care payment policy will limit access

Payment rates for physicians and other health care providers in the HUSKY and Charter Oak programs, already considered inadequate by many providers, could get even lower under a policy change made earlier this year, prompting concerns among lawmakers and advocates that patients in the state programs could struggle to find doctors to treat them.

“This is guaranteed to hurt access,” said Sheldon Toubman, a lawyer with the New Haven Legal Assistance Association. Toubman, along with other health care advocates and legislators, learned of the change during a meeting Friday.

The state contracts with three managed-care companies to administer HUSKY and Charter Oak. It pays the companies a set amount per enrollee, and the companies contract with health care providers.

Since 2008, the state Department of Social Services has set minimum levels for the payments to providers. The department removed that requirement in August, retroactive to July 1. The change would affect all providers except federally designated community health centers.

The department is in the process of negotiating contracts with the managed-care companies. If the insurers save money by paying providers less, the state could negotiate lower payments to the insurers, although it is not clear how much the change would save in the short term.

A representative from Aetna, one of the insurers, said the company was not renegotiating with providers to pay less than the previous minimum levels. It was not clear Friday if the other two companies were doing so.

Lawmakers and patient advocates raised concerns that allowing insurers to lower payment rates could lead doctors and other providers to stop taking HUSKY and Charter Oak patients, or to limit how many they treat.

In addition to reducing access to health care, Toubman said, the change is unlikely to save the state money.

He pointed to a report last month showing that the insurers made margins of more than 20 percent in one of the HUSKY plans, and said the rates paid with the floor in place were already considered inadequate and produced “serious access problems.”

“This is guaranteed to make it worse,” he said.

State Rep. Vickie Nardello also raised concerns, saying experience suggests that provider rates will fall, making it harder for patients to get care.

“I am concerned about this. I understand the reasoning, but I don’t totally agree with it,” she said.

Nardello, a Democrat from Prospect, said the change could produce winners and losers, hurting providers who are not as skilled at negotiating.

State Rep. David McCluskey asked whether the department had considered excluding preventive services from the change. It had not, said Mark Schaefer, the department’s director of medical care administration.

“We want to make sure that in our exuberance to save a nickel here, that going forward it’s not going to cost us a dollar, two dollars,” said McCluskey, a Democrat from West Hartford. “And as important is the health of the people we’re providing Medicaid services to.”

Schaefer said that if the change saves money without reducing access to care or quality, he might not be particularly concerned, as long as the state can capture the savings, rather than letting them simply improve the insurers’ bottom lines.

Council member Debra Polun raised another concern: If it becomes clear that access to care, or quality of care, have been reduced, the state would seem to have little recourse until the next contracts are negotiated. She suggested building something into the contracts that would allow the state to address any problems sooner.

Schaefer said the department would consider if there is enough of a baseline to measure changes and whether doing so would be wise.

He noted that there was no floor on provider payments from 1995 to 2008.

“The policy was sufficient for 13 years, if I have my math correct,” he said.

Schaefer pointed to the need to achieve the greatest savings possible, and said managed-care companies can get the most efficient rates the market allows.

“My plea is that we embrace both the cost, quality and access, sort of all as a piece, because that’s really going to be the order of the day over the next few years,” he said.

Schaefer said the department can negotiate reductions in what the state pays each insurer based on the savings from removing the payment floor. He declined to discuss specifics of the contract talks, including what assumptions the state was making about rates providers would be paid, until after the negotiations are complete.

While the department is negotiating contracts with the insurers, it and the Medicaid council have been contemplating changing the way HUSKY and Charter Oak are administered, including possibly moving the programs out of managed care and into a system in which an outside company administers the program but the state pays the medical claims.

Toubman said Friday that the removal of the payment floor underscored the urgency of moving HUSKY away from its current management system.

He and other advocates have suggested that the state move to a system known as primary care case management, in which there is no insurance company and primary care providers are paid a monthly fee to coordinate their patients’ care. A small portion of the HUSKY program currently uses that method, a program known as HUSKY Primary Care. DSS officials have raised concerns about the feasibility of expanding the program statewide.