NY asks, should managed long-term care be limited to provider-sponsored networks?
NY Managed Long-Term Care
June 30, 1997
It seems virtually certain that New York’s legislature will pass a vastly expanded managed long-term care program by the end of its current session. But, it’s unclear who will be allowed to participate and whether other long-term care policy reforms will be enacted.
One area of disagreement is whether HMOs should be allowed to participate in managed long-term care or whether it should be limited to provider-sponsored networks.
The Democratic-controlled Assembly and the Republican-run Senate both are considering bills to expand on the state’s limited foray into managed long-term care, which thus far includes a couple of PACE (Programs of All-Inclusive Care for the Elderly) operations and one so-called pre-PACE’ site, which uses capitated Medicare and Medicaid funds to provide a range of managed long-term care. But, they serve fewer than 1,000 people—a tiny fraction of the elderly New Yorkers, who either need long-term care now, or will in the near future.
Tens of thousands would be served under the legislative proposals, which would allow for two dozen managed long-term care demonstration programs to operate.
"I want to give priority to provider-sponsored managed long-term care plans for a variety of reasons, including keeping the health care dollar in the system," says Assembly Health Committee Chairman Richard Gottfried, a Manhattan Democrat, who is leery of HMO participation. "I have more confidence in provider-sponsored plans, that they will use the managed care system to assure appropriate care rather than cheapest care. And I’m concerned that because of the enormous access to capital that HMOs have, that if we let them in the field, they may crush the provider-sponsored plans, and they’ll never be able to get off the ground."
Gov. George Pataki, who has weighed in with his own long-term care proposal, argues that the state will learn more about what works best by allowing all players, including HMOs, in the game.
Senate Health Committee Chairman Kemp Hannon, a Long Island Republican, is less worried about HMOs’ impact on managed long-term care, than he is about a stalemate in negotiations that have been progressing smoothly. Legislation in this area has bogged down over just that question in the past couple of years.
While he’s open to the idea of letting HMOs participate in the demonstration project, Mr. Hannon says he’d rather drop them out if opponents like Gottfried won’t pass legislation that includes them.
"I’ll give the exploration of HMO entities an honest shot [in discussions], but if Gottfried puts his feet in cement and won’t move, I’m going to still want to move ahead with coming up with a program. At least we start to then have a program to take care of this population and gain the necessary experience in having people run it, along with the state regulating it, so we find out what’s appropriate."
There’s no question that any attempt to include the HMOs will run into stiff opposition from providers—particularly nursing homes.
Medicare risk-contracts
"I just don"t understand the rationale for allowing HMOs, who are not providers, to participate in a process when, in fact, if they want to do Medicare risk-contracting, they can do it right now," says Carl Young, executive director of the New York State Association of Homes and Services for the Aging, which represents not-for-profit nursing homes. "Generally speaking they’ve avoided the long term-care population. Let’s let the people who know how to do it test their mettle and see if we can create these networks on our own."
The state Home Care Association has traditionally opposed any effort to let the HMOs into the programs, notes Fred Griesbach, the association’s vice president for government affairs, but it is trying to be more open to the idea. "They tend to manage money and not care. But we’re rethinking that position. Maybe we should just let everybody play since this is a demonstration project."
The New York HMO Conference agrees. "Letting HMOs participate in the demonstration projects will enhance patient continuity of care, because you could have actually current HMO patients moving into the long-term care end of things, and have a seamless transition in terms of their care," argues conference spokeswoman Leslie Moran.
Who will be served?
Another area of disagreement between the governor and the legislature is the population to be served in managed care. The Legislature would restrict managed care programs to clients with chronic illnesses while the administration thinks that’s too limiting.
While the proposals being considered give organizations sponsoring demonstration programs wide latitude to try various approaches, one state official believes capitation is a key feature of a good program.
"We want them to operate exactly the same way PACE does, using capitated funds," says Linda Gowdy, director of the Health Department’s Bureau of Long-Term Care Initiatives. "Then you have responsibility for all the components of an individual’s health care needs."
Besides an expansion of managed long-term care, the administration has made other proposals for long-term care reform stemming largely from recommendations put out last year by the Task Force on Long-Term Care Financing. Those recommendations reflect a widely acknowledged fact about the state’s long-term care system: It should be weaned from an over-reliance on Medicaid.
"The state needs to encourage more individual citizens to take responsibility for their own long-term care needs," says state Health Department spokeswoman Frances Tarlton. Nationally, Medicaid pays for 47% of all nursing home care, but, in New York, Medicaid picks up 81% of the cost. Conversely, private assets cover 42% of nursing home care nationally, but only 10% in New York.
The administration’s proposal would make permanent the Partnership for Long-Term Care program, which promotes the purchase of long-term care insurance by individuals. The partnership now operates as a demonstration project funded through a grant by the Robert Wood Johnson Foundation and runs out next year. What will happen at that point if the Legislature doesn’t make it a permanent state program is unclear.
The program guarantees purchasers of long-term-care insurance policies that they will have unlimited Medicaid coverage after they use up their private benefits, without having to first spend down or otherwise dispose of their assets. About 12,000 such policies are now in effect in New York.
Gov. Pataki’s proposal also would allow people with life insurance policies to take accelerated death benefits once they’re determined to be chronically ill and in need of nursing home care for the remainder of their lives. His proposal also would remove restrictions on developing residential services for the long-term-care population. It would make it easier for continuing care retirement communities to obtain financing and for assisted living programs to provide nursing care.
Partnership for Long Term Care
The Assembly has already passed legislation making the Partnership for Long-Term Care permanent, and there’s little opposition to easing the financing for continuing care communities or accelerating death benefits.
Although his group, the New York State Association of Homes and Services for the Aging, feels mixed about the administration’s proposal, Mr. Young acknowledges that it’s a positive development to see the governor stake out a broader long-term care policy, two-and-a-half years after entering office.
"We have advocated for developing policy in long-term care and getting away from this budget-driven process that we’ve always had. "—Harvy Lipman
Contact Ms. Gowdy at 518-473-6275; Mr. Young at 518-449-2707 (ext. 20); Mr. Griesbach at at 518-426-8764; Assemblyman Gottfried at 518-455-4941; Mr. Hannon at 518-455-2200; and Ms. Tarlton at 518-474-7354.
NY asks, should managed long-term care be limited to provider-sponsored networks?
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