Increasingly, states are turning to managed care in an attempt to improve the quality and cost-effectiveness of Medicaid Managed Long-Term Services and Supports (MMLTSS). According to a recent CMS-sponsored survey, the number of states operating MMLTSS programs doubled between 2004 and 2012 (from 8 to 16) and is expected to grow to 26 by 2014. A majority of states currently operating MMLTSS programs (12 of 16) have built self-directed service options into their programs.41 Generally, these program components are based on preexisting self-direction initiatives within the states’ traditional fee-for-service systems. Little comparative information, however, is currently available on the nature and scope of self-directed initiatives within MMLTSS programs.
In several important ways, the basic concepts underlying managed care conflict with the principles of consumer choice and control that lie at the heart of self-directed services. Managed care attempts to achieve systemwide efficiencies by consolidating decision-making authority in a single management entity, restricting consumer choice to network-approved providers, and substituting lower-cost interventions for higher-cost interventions wherever possible. The self-direction model, in contrast, vests decision-making authority with the individual receiving supports, with or without the assistance of a designated representative(s). However, a well-designed managed care program may help to reduce some of the barriers to implementing self-direction, especially in the behavioral health arena. For example, some states are incorporating a self-direct services component in their health home initiatives on behalf of people with psychiatric disabilities.
The current interest in applying managed care principles to public long-term support systems is motivated primarily by a desire on the part of public policymakers to curb the growth in future Medicaid outlays for services to high-cost beneficiaries, primarily people with substantial, chronic disabilities. Fueled by the escalating service needs of an aging U.S. population, federal Medicaid expenditures are projected to increase by 134 percent between FY 2012 and FY 2022 (from $253 billion to $592 billion) and grow as a percentage of the gross domestic product from 1.7 percent to 2.4 percent over the same period.42 The question is: can self-direction thrive in an environment in which the principal aim of public policy is to limit the growth in program outlays by tightly managing utilization and expenditures and standardizing interventions practices?
Managed care originated in primary and acute health care delivery systems, with an emphasis on medical treatment and recovery. Only a handful of states and health care management firms have had extensive experience in adapting managed care techniques to the long-term services sector. Many disability advocates are deeply concerned that the significant differences in the nature, duration, scope, and intent of acute care and LTSS will smother participant choice and control under a new wave of medical paternalism once managed care is introduced to MMLTSS.
Are these fears justifiable? Will self-direction play a prominent role in future MMLTSS systems? Let’s examine the recent experiences of Wisconsin and New York, which have long traditions of consumer-directed HCBS and are in the process of shifting to MMLTSS systems.
Participant choice and self-determination have been core precepts of Family Care since Wisconsin’s managed long-term services and supports program was initially proposed in the late 1990s. As Family Care was phased in during the 2000s, however, it became clear that too few program participants were being afforded opportunities to self-direct their services and supports. When the required Secretarial waivers to operate the Family Care program came up for renewal in 2007, CMS insisted, as a condition of waiver renewal, that the state establish a separate HCBS waiver program for qualified adults who elect to self-direct their services and supports.
The IRIS (Include, Respect, I Self-Direct) Section 1915(c) waiver program was launched on July 1, 2008, to enhance opportunities for Family Care-eligible seniors and adults with physical and developmental disabilities to self-direct their Medicaid-funded services. The program is available to qualified adults only in counties participating in the Family Care program (46 of the state’s 72 counties as of August 2012). The state Department of Health Services, the single state Medicaid agency, retains an IRIS Consultant Agency to assist participants in selecting a qualified individual (consultant) to help them develop and manage a person-centered plan. The Department of Health Services also contracts with a Financial Service Agency to pay the bills and handle other back-office functions for IRIS participants and, with Disability Rights Wisconsin to act as program ombudsman, assist participants to file and settle grievances and appeals.43
As initially conceived, the IRIS program was to serve as an alternative for a comparatively small number of individuals who elect to self-direct their services rather than receive them through one of the nine managed care organizations (MCOs) participating in the Family Care program. Department of Health Services officials initially projected that 1,500 individuals would be enrolled in the IRIS program by 2011. In practice, almost 6,000 individuals were participating in the program by early 2012.44
The unexpected surge in enrollment in the IRIS program led to a series of problems, including a lack of program integrity and accountability, a flawed infrastructure to support participant choice and control, and an inequitable process of establishing individual budget allocations. These and other operational issues imposed constraints on the extent to which IRIS participants were able to select where and with whom they live as well as their capacity to direct their own services and supports. Some of these problems were pointed out in a 2011 evaluation of the Family Care program conducted by the nonpartisan Legislative Audit Bureau.45
In response to the audit bureau’s findings, as well as legislative and gubernatorial concerns about the growing cost of the Family Care program (which is expected to top $2.8 billion, or about 40% of the state’s Medicaid budget, during FY 2011–12).46 the Wisconsin Department of Health Services developed a plan to promote the long-range sustainability of the program. The plan includes a variety of action steps to strengthen the IRIS program and improve "…the ability of consumers to choose the most integrated, community-based and cost-effective services."47
It is not clear, at this early stage of the process, whether the planned changes will revitalize self-direction options for Family Care-eligible adults.
The roots of consumer-directed Medicaid services can be traced back to the late 1970s, when a group of young adults with disabilities in New York City rebelled against having home care administrators, nurses, and social workers control their lives. They formed an organization called Concepts of Independence to administer their home care services on a self-directed basis. In late 1980, Concepts became the state’s first certified provider of consumer-directed PAS, with responsibility for acting as a fiscal conduit for Medicaid beneficiaries who elected to self-direct their home care supports. Over the following decade, consumer-directed service programs sprang up in other areas of the state; and, in 1996, the state legislature converted a statewide demonstration program into the Consumer Directed Personal Assistance Program (CDPAP) with a mandate that the Department of Health give all New York State Medicaid recipients the option of self-directing their Medicaid supports through a certified fiscal intermediary.48
One of Governor Andrew Cuomo’s initial actions upon assuming office in January 2011 was to issue an executive order creating a Medicaid Redesign Team (MRT). The governor’s charge to the MRT was to develop a comprehensive plan to "transform health care delivery for New Yorkers who are enrolled in both Medicaid and Medicare."49 One of the MRT’s recommendations was to mandate the enrollment of low-income seniors and adults with physical disabilities in existing managed long-term care plans. Approved by the New York General Assembly as part of the state’s FY 2011–12 budget (along with many other MRT recommended actions), the plan calls for delivering MMLTSS through existing Managed Long-Term Care plans, including existing services to more than 60,000 CDPAP participants, approximately 40,000 recipients of home health state plan services, and 24,000 participants in HCBS waiver services for seniors and adults with physical disabilities.
Disability advocates contend that the transition to MMLTSS threatens the integrity of current and future self-directed services, due both to the abbreviated transition period (i.e., all people to be enrolled in Managed Long-Term Care plans by the end of 2013) and the many key policy issues that have not yet been addressed. The concerns of disability advocates revolve around potential conflicts between the interests of the MCOs and the interests of the individual,50 including the following:
- The inherent conflict between the medically-oriented care management model used by existing MCOs and the overarching goals of self-direction (independence, personal control, and improved quality of life);
- The possibility that MCOs will be assigned responsibility for determining whether an individual is self-directing his/her services or has designated a willing and able representative to direct the service plan on his/her behalf;
- Whether MCOs will be responsible for notifying self-directing participants of their opportunity to appeal denials of eligibility and their right to a fair hearing on such appeals; and
- Whether MLTC plans will be required to contract with independent providers of CDPAP services instead of using existing home care contractors to furnish in-plan CDPAP services.
Participants in the Comprehensive HCBS waiver program administered by the state Office of People with Developmental Disabilities (OPWDD) are exempted from mandatory enrollment in MLTC plans.51 "Due to the complexity of the OPWDD system," the Medicaid Reform Team decided that a separate federal managed care waiver program should be established for services to people with intellectual and developmental disabilities.52 This waiver request, referred to as the People First demonstration, waiver was submitted in final form to CMS in April 2012 and remained under federal agency review at the time this report was prepared.53
As part of the proposed People First waiver program, OPWDD plans to build on nearly 20 years of experience in offering self-directed support options under the state’s Comprehensive DD waiver program. The state’s proposal treats self-directed supports as a "non-negotiable" element of planned systemic reforms, and spells out in considerable detail the steps that OPWDD is prepared to take to ensure that people with I/DD have opportunities to control their own services and supports. Although they support the state’s efforts to ensure access to self-directed services, some disability advocates express concern over the proposed model. Noting the importance of conflict-free case management, advocates point out that the current proposal to allow nonprofit and public managed care entities—referred to in the state’s People First waiver request as Developmental Disabilities Individual Services and Supports Coordination Organizations—to both provide and coordinate HCBS to plan enrollees would constitute an inherent conflict of interest for individuals who choose to self-direct their services. Self-direction, they argue, is not likely to flourish in such a provider-driven service delivery system.
The problems that Wisconsin and New York have encountered in attempting to ensure access to self-directed supports for enrollees in MMLTSS plans are far from unique. Various sensitive issues must be resolved if participants in MMLTSS plans are to be afforded genuine opportunities to self-direct their own services and supports.