Health system overhaul plan has Medicaid advocates worried

State officials are seeking millions of dollars in federal funds with the ambitious goal of redesigning how health care is paid for and delivered to the majority of Connecticut residents.

But critics say a late addition to the application has the potential to significantly change Connecticut’s Medicaid program, in ways they worry could make it harder for low-income children and adults to receive care.

What’s the plan?

The goals are big: Improve the health of Connecticut residents; eliminate disparities in health between different groups; improve care quality and access, as well as patient experience and participation — all while lowering costs. And the aim is to affect the care of nearly everyone in the state.

Gov. Dannel P. Malloy’s administration is applying for a federal grant of as much as $100 million to help fund the effort, known as the State Innovation Model Initiative, or SIM.

Their plan includes several strategies, but much of it centers on improving primary care and changing the way health care providers are paid as a way to influence how they deliver care. Mark Schaefer, who is leading the plan development as the state’s director of healthcare innovation, described it as trying to “change the culture in the practice of medicine.”

Currently, most health care providers are paid for each office visit or procedure they perform, a system most experts view as encouraging them to do more — and possibly too much — while not rewarding efficient care or better outcomes. Doctors often don’t get paid for things that could keep patients healthy or make care more efficient, like coordinating care, ensuring patients get needed specialty care, or talking with patients by phone or e-mail if a visit isn’t needed. And providers generally have no financial incentive to pay attention to the overall cost of their patients’ care.

Medicare and many health insurers are trying to develop new ways to pay for care that would reward providers based on patients’ outcomes and the cost-efficiency of the care. Many of the models being tried use an approach known as “shared savings:” Health care providers who meet quality goals while reducing costs can keep some of the savings. In other models, providers could lose money if they don’t meet cost and quality targets.

But those alternative payment models vary, as do the standards providers must meet to comply. Some people believe that limits the ability of the models to spur doctors and other providers to fully change how they practice.

One element of the SIM proposal is to develop a common system for insurers, the state employee health plan and other coverage programs, so doctors would follow a single set of standards for all their patients and, planners hope, make changes to help serve patients better.

What’s the controversy?

Advocates for low-income patients are concerned with the proposed changes. While unnecessary tests and other forms of “over-treatment” might be a problem for privately insured people, they say people in Medicaid more often face the opposite problem: limited access to specialists and difficulty getting adequate care.

Advocates worry that giving health care providers a financial incentive to save money on patient care could lead them to withhold treatment or not recommend services that could be helpful.

Supporters of the payment changes say that could be avoided by requiring providers to meet care quality standards to get the extra money, not just provide care at lower costs. Connecticut’s proposal also includes setting up a council to develop ways to ensure that doctors aren’t skimping on needed care. But advocates worry those safeguards aren’t enough.

Earlier versions of the SIM plan called for holding off on payment changes in Medicaid until officials could review how the model has worked with other insurance programs.

But the a new version of the proposal, released late last month, calls for significant payment changes in Medicaid, including a shared savings program for 200,000 to 215,000 Medicaid clients. The grant application is due later this month.

Why the change? Schaefer said the federal government made clear that Medicaid would need to be part of the plan. In addition, he said, it’s difficult for health care providers to change their culture if only some of the coverage programs that pay them change their payment criteria.

And Schaefer said that if reducing health disparities is a priority, it’s important to include Medicaid in the changes.

Under the state’s proposal, he noted, payments to providers would be tied in part to patient surveys on their experiences. That’s particularly important to Medicaid, Schaefer said, because clients in the program have made clear that they experience the health care system differently than people with other coverage: “Not feeling listened to, not feeling welcomed, not feeling respected.” That, he added, ought to be addressed.

The proposed Medicaid changes?

There are two.

One is to change how community health centers and certain other provider groups are paid starting Jan. 1, 2016, allowing them to share in a portion of any savings they achieve as long as they meet performance measures. They would also get payments to help make changes to their practices.

That change is intended to affect the care of between 200,000 and 215,000 Medicaid members.

The second proposal is to develop a project that addresses factors like housing, food, and safety — things that affect health but aren’t traditionally covered by insurance programs.

The project would only affect a limited number of Medicaid clients, social service officials say. For them, the state would seek federal permission to cover a wider range of services than Medicaid traditionally pays for, such as air conditioners for people with asthma or home modifications to help people manage chronic conditions at home. A goal of the approach is to better intervene when children experience trauma, which can contribute to mental and physical health problems later in life.

Some advocates worry that, in exchange for federal permission to cover a broader range of services, the state could have to agree to a limit to the federal funds it receives for the care of people in the program. Social service officials say the approach hasn’t yet been determined.

Why are critics concerned?

Some say the proposed Medicaid changes were developed so recently that they haven’t been properly vetted and should instead be studied before being tried on more than 200,000 people.

“You can’t just try untried methods of payment reform and performance payments without doing pilots, without really making sure you do no harm as at least the minimum,” said Sheila Amdur, a longtime advocate for people with mental illness. “You want to show that you can improve health and reduce the trend of spending.”

“I’m very concerned that…it’s almost like going back to a model where you have to deny care in order to cover your costs,” Amdur said.

Some advocates say the state should instead build on other programs for Medicaid clients. One — referred to as person-centered medical homes — gives health care providers additional money if they do things like offer extended hours and coordinate patients’ care. Providers aren’t rewarded or penalized based on how much their patients’ care costs.

Another program, which is still being developed, is intended to provide care coordination and case management for people who have both Medicare and Medicaid, many of whom have serious mental illness and whose care is among the most expensive in Medicaid.

Sheldon Toubman, an attorney with the New Haven Legal Assistance Association, suggested during a meeting Thursday that the planners were including the Medicaid changes as a way to get the grant, not because of what’s best for Medicaid enrollees.

What do proponents of the changes say?

Lt. Gov. Nancy Wyman, who leads the steering committee that oversees the SIM initiative, disputed Toubman’s charge.

“There has never been a feeling that the grant was more important than the people that we serve,” she said.

Others say existing Medicaid initiatives don’t go far enough.

Schaefer said the medical home program alone won’t drive the kind of changes in care delivery that are needed. He said the federal government’s goal is for all residents to eventually see primary care providers who are accountable for the quality of their patients’ care — and what it costs.

State Healthcare Advocate Victoria Veltri, whose office houses the staff working on the innovation plan, said that in focus groups, the top issues Medicaid clients identified was bad treatment, lack of access to specialty care or behavioral health, and the fact that they have to go to emergency rooms to get care.

“There are still substantial problems in the Medicaid program,” she said.

And Veltri said she doesn’t object to holding health care providers accountable financially.

Evelyn Barnum, CEO of the Community Health Center Association of Connecticut, said the proposal could provide community health centers with the cash flow to transform their practices so they can take care of more patients more efficiently and improve patients’ access to care.

“We don’t fear the shared savings in the way that a lot of others do,” she said.

Social Services Commissioner Roderick L. Bremby said the exact approach the state would take remains to be determined, and will be developed in collaboration with others.

What happens next?

The grant application is due to the federal government later this month.