In Kansas, Medicaid managed care system to take over developmental-disability services

November 27, 2013

Aldona and Pat Carney call their son, Neil, “a 24-7 kid.” He’s profoundly autistic, severely mentally retarded and attends a special school. He has tried to eat light bulbs and charcoal briquettes and can be aggressive, sometimes scratching people near him.

Neil, 18, who walks with a limp and carries around a gray sock that calms him, lives in a beige single-family home purchased by relatives, with a professional caregiver who has known him for years. The state of Kansas pays a nonprofit agency about $71,000 a year for his residential services — the maximum amount because of his extreme disabilities. That’s cheaper than if he were institutionalized.

The Carneys — and thousands of parents and relatives of developmentally disabled Kansans — fear that come January, the world they have become accustomed to may be turned upside down.

That’s when the state’s Medicaid managed care system – called KanCare — will take charge of all home and community-based services for about 8,500 developmentally disabled people, most of them adults.

Three for-profit national insurance companies that run KanCare for the state will be making final decisions about eligibility and care. Currently, a network of community-based nonprofits and county agencies has that responsibility. Families and advocates worry about the insurers’ lack of experience managing a statewide program. They’re also concerned that the need to make a profit ultimately will destroy a system they think works well.

Kansas will be the first state to make such a leap, and it is being watched closely elsewhere, as at least two other states — Louisiana and New Hampshire — are considering moving in the same direction.

“This is an unprecedented model. No state has ever taken a developmental disability population and placed it in an arrangement like this, with an out-of-state managed care system, all at once,” said Rocky Nichols, executive director of the Disability Rights Center of Kansas, a legal advocacy group. “It’s almost like throwing everyone into the deep end of the pool.”

Many states are scrambling to place large numbers of people on Medicaid — the state-federal program for the poor and the disabled — into managed care in hopes of reducing costs and improving quality. Nearly 30 million Americans on Medicaid are in private managed care plans and millions more will become eligible for Medicaid in January under the federal health-care law. Many will be placed in managed care, a system in which insurers are paid a fixed amount per member each month and set up networks of doctors and hospitals to provide services.

By next year, more than two dozen states are expected to have set up programs to transfer frail elderly, mentally ill or physically disabled people into managed care for home and community-based services. But in most states, the developmentally disabled — people with impairments such as cerebral palsy, Down syndrome and autism – have been excluded from managed care for these services because their needs are so specialized.

They live with their families, or in apartments, single-family homes or group homes. Some need round-the-clock supervision and many require assistance with dressing, bathing and preparing meals, as well as transportation. Some need help finding a job or volunteer work, and many attend daytime activity centers.

“There is a great deal of fear in the community that these big, private health plans don’t know much about this population,” said Maureen Fitzgerald, disability rights director for The Arc, a national advocacy organization for the developmentally disabled. “These are such vulnerable people. If the home-care person doesn’t show up, you could be lying in your bed all day.”

Only a handful of states, including Michigan and Vermont, have moved the developmentally disabled into managed care for long-term services. They’ve mostly relied on existing networks of community-based nonprofits or county agencies or have made themselves the managed-care organization. None has turned exclusively to national managed-care companies.

Kansas transferred virtually all of the 380,000 people on Medicaid into KanCare in January. It contracts with three companies: Amerigroup, UnitedHealthcare Community Plan and Sunflower State Health Plan, a subsidiary of Centene. The companies provide medical, pharmaceutical and mental health care to KanCare members, including the developmentally disabled.

Although the frail elderly, physically disabled and mentally ill receive long-term services through KanCare, the developmentally disabled were given a one-year grace period for 2013 by the legislature, following bitter protests by parents, advocates and providers.

Shawn Sullivan, secretary of the Kansas Department for Aging and Disability Services, said in an interview that clients will be able to keep their case managers and that reimbursements won’t be cut for agencies that provide care. The major difference, he said, is that the insurance companies will hire care coordinators who will work with case managers and providers.

Jean Rumbaugh, president of Sunflower State Health Plan, said: “We want to provide solutions to states and have a holistic approach to this population. It is a new opportunity and one that I think Centene is very interested in.”

The health plans say that although they may not have much experience with this particular type of program, they have been handling similar services for physically disabled and elderly members. They also have been hiring workers and managers with expertise in developmental disabilities in Kansas.

Sullivan noted that the state will maintain a high level of oversight and stringent contractual requirements, such as withholding 3 percent to 5 percent of payments to the plans to ensure that performance requirements are met.

The Carneys worry about their son’s future.

Aldona Carney, 51, said she envisions the house — equipped with cameras to track Neil’s movements and a back-yard swing he loves to ride — as a place for him to live the rest of his life, but fears that could change under KanCare because of the cost.

“We had a system that worked really well,” she said, “so why are they trying to fix something that’s not broken?”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

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