Management Performance Associates

Managed delivery is coming. Are you ready?

It will arrive in the form of State Medicaid reform, Accountable Care Organizations, or other demonstration programs implemented under the Affordable Care Act. Some demonstration programs seek to integrate the delivery of health care services for dual- eligible seniors, coordinating the benefits rendered under both Medicare and Medicaid. As States move forward with Medicaid managed care, they are likely to delegate the responsibility for managing utilization, cost, and quality to health plans with specific expertise in delivering covered services to a targeted population under very controlled conditions. Some States may place the responsibility for case management in the medical home or with the primary physician. Whatever the method, expect utilization to be closely managed.

Today’s developing version of managed care is different from what we have seen in the past. Long-term care providers are now included in the management of chronic disease. Further, quality measures appear in every reimbursement methodology we have seen. In some cases – Illinois, for example – Managed Care Organizations (MCOs) can drop providers from their panels for failure to achieve specific quality measures.

Managed care will have multiple impacts upon providers, particularly in skilled nursing where there has been relatively little exposure to the real pressures of managed delivery. Two major factors will be price and utilization. Understandably, providers want to protect the rates they are paid. However, in our experience, the major driver of cost is utilization. Health plans (and ACOs) have a driving motivation to reduce institutional utilization by moving residents to alternate care settings at significantly less cost. The combination of reduced utilization plus price pressure will force consolidation in the long-term care industry.