Guest Columns

Looking at Massachusetts in LTSS reform

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James Lomastro
James Lomastro

We can learn a lot by examining Massachusetts, a state that has embraced healthcare reform and currently working to transform its Medicaid program.

There is little doubt, even before the potential fight to repeal or replace the Affordable Care Act, that the Medicaid system required reform. The system emerged as a response to provide public coverage to vulnerable and less resourced citizens.

Medicaid today is not a system of care as much as a way to provide a variety of care to vulnerable and disabled populations by an array of diverse and often overlapping providers.

Medicaid addresses social systems in which these groups populate utilizing the medical model, which accounts for its inefficiencies and lack of coordination. For example, in Massachusetts alone there are close to 2,000 organizations providing care to diverse populations. As the recent debate indicated, the importance of Medicaid in many states lies beyond its serving one in four residents. It functions as healthcare community and the public safety net when no other resource is present, represents a significant and variable portion of the state's budget, generates decent jobs, income and business opportunities for citizens of the state.  

Tinkering with Medicaid risks not only the loss of benefits for its recipients but also jeopardizes the prosperity of states. It is critical to remember, when considering repealing, reforming, or repairing it, of how it is intertwined with the economy (jobs) and prosperity of the state. It is interesting that those states with significant Medicaid programs and expenditures are also strong economic players.  

In Massachusetts, there are three major separate initiatives directed at doing things differently to impact Medicaid. The three initiatives are in behavioral health, acute care and long-term care. The focus is on efforts to reform long term care. In many cases, the constituencies are the same, necessitating a real shift to a person-focused, constituent-based, collaborative system that works together more as a social system than a “medical” one. However, the strategy is to work through each system separately with the initial goal of collaboration and consolidation within each sector before merging them.

While initial efforts direct a substantial amount of effort toward LTSS, it will be necessary to coordination and integration of the institutional component to reform the system.

The nursing home system is too significant and costly to be excluded. As we have indicated in past articles both are represent safety net, and both functions in ways that are not resourceful and will continue unless held accountable for their resources.

Using Massachusetts as an example, MassHealth, the state's Medicaid program, is the largest payer of LTSS. It spent about $4.5 billion on LTSS services in 2015 through numerous providers. The amount, which includes federal Medicaid matching funds, represents nearly one-third of all MassHealth spending and accounts for 12 percent of the entire state budget. To a large degree, it is not coordinated with multiple agencies responsible for individual constituents.

The LTSS program provides services such as home healthcare services, adult day health and durable medical equipment for people with physical, intellectual or developmental disabilities, or who need support with activities of daily living. As a result of a study, a plan for a MassHealth's LTSS system emerged.  It stated purpose is to be person-centered, integrated, sustainable, accountable and actionable. It primarily seeks to coordinate much of the LTSS. However, coordination is hard when many players are necessitating a movement toward consolidation.

These services cover a range of services used by elders and people with disabilities and chronic conditions.  In moving toward this goal, Optum, a health services company, serves as the LTSS program's Third-Party Administrator and will provide MassHealth with clinical, administrative, operations and systems support.

The objectives seek primarily to strengthen program integrity; conduct analyses on utilization and quality patterns; perform prior authorization and utilization management as directed by MassHealth; credential, enroll and train providers; and process and adjudication claims and provide electronic visit verification.  Much of this activity was provided directly by the state or through contractors. It is the first step toward coordination, consolidation, and development of a seamless system of care. It is a movement of the Medicaid away from primary as a system of reimbursement to a system of care.  It is occurring primarily at the executive level but given its scope and significance will require legislative action.

Social Model of Care

While we have had 40 years of identifying as inadequate the medical model especially as a system of cure, we continue to deploy it because of inertia and a number of leveraged and established interests.  It has primarily worked in a latent fashion underlying much of the way that we provide services. Its current structure preserves many interests in for-profit and non-profit especially when the issue of cooperation, integration, and consolidation arises and the value of particular interests become challenged. On the issue of consolidation, it is more at the local and regional (county) consolidation that works and not the multi-state corporations with little stake in the area or state.

Current Medicaid models tend to support squeezing value from current services rather than creating value through different models. Even thinking out of the box still leaves us with this current Medicaid box.  It is not surprising that despite efforts at cost reduction and control, costs keep rising and the system fails to meet needs of its constituents especially since the United States spends more than any other western country per capita.

While there are waste and fraud, which the TPA will tackle, addressing them will lessen but not eliminate the problem. The issue is that the model is fundamentally flawed because it is both a payment system and based on a medical model when it needs to move toward a social system model. We need in many ways to get rid of the box (medical model)  itself. It is a start. However, providers are on the sidelines hoping that it will not affect them or actively working to ensure that they are not gorged in the process.  Presently, there is little incentive for them to do otherwise. The LTSS sector may want to look at behavioral health and how it consolidated and a player in the new system as well as begin to think how it will coordinate with them as they share many constituents.

Arguably this effort will be harder than in behavior health because behavioral health's institutional component is less significant than in long-term care and concentrated. Presently in long-term care, support and service and the nursing homes systems parallel one another although they increasingly share stakeholders. Both view each other as taking away business.

While the public expects some self-interest on the part of each system, the present lack of coordination does not work for the overall system or stakeholders. In both systems, there are too many providers, separate interests and agendas failing to collaborate. In some cases, advocates of LTSS seek to eliminate nursing homes despite the need for residential resources for stakeholders who just cannot live in the community or stays in residential situation to stabilize them and return them to the community.

How does the system coordinate without consolidation and merging maintaining the safety net and addressing the economics of care? Are there just too many providers who do not have the capacity to function efficiently in a consolidated system? How do we do it in a way that develops the ability for the system collaborate not only with providers but with those it's served and in the long term care its caregivers with oversight?  

The issue for advocates, policy makers, legislatures and eventually providers is how to develop a system more reflective of the needs of its constituents and transform Medicaid from a payment system to a system of care.

James Lomastro, Ph.D., has worked in a variety of acute, community-based and long-term care in healthcare for 35 years. He has held an administrator license since 1991. Before involvement in administration, he held academic and research appointments at Boston University School of Medicine and Northeastern University.

Guest Columns

Guest columns are written by long-term care industry experts, ranging from academics and thought leaders to administrators and CEOs.