Managed care organizations aiming to serve dual-eligible beneficiaries appear to be picking their nursing home partners based on costs, rather than quality factors.

That’s one of the key takeaways from a new study out of the universities of California in Berkeley and San Francisco. Little is known about the quality of skilled nursing facilities selected by MCOs designed to provide better-coordinated care for individuals who receive both Medicare and Medicaid, the authors note.

Aiming to close that knowledge gap, researchers analyzed data from 17 MCOs taking part in California’s Coordinated Care Initiative to improve care for duals. They found that managed care paid “limited attention to using quality criteria,” with the 602 network nursing homes scoring significantly lower on six selected quality measures when compared to their 117 non-network counterparts.

While the study looked at only California’s dual demonstrations, there are 12 other states with similar initiatives, notes Charlene Harrington, Ph.D., a professor emeritus with the University of California San Francisco and one of the study’s authors.

“We think it’s a more widespread problem, not just with the Medicaid managed care organizations, but with other managed care organizations,” she told McKnight’s. “Mostly, they seem to be contracting based on cost rather than quality.”

“It’s clear that Medicaid beneficiaries are being sent to poorer quality nursing homes,” she added. “So, it should be a concern to the government, but it remains to be seen whether [The Center for Medicare & Medicaid Services] with its state Medicaid programs will try to develop policies that encourage the use of higher quality nursing homes.”

As a remedy, the authors recommend that health plans utilize publicly available quality ratings to determine which facilities to include in networks, and provide members with quality details about network nursing homes.

“As the goal for integrated care moves forward to provide more efficient and economical care, health plans should be encouraged, or required, to develop specific quality criteria for nursing homes to participate in their networks,” the study authors conclude.