Managed Care Organizations Selecting Nursing Homes Based on Cost, Not Quality

A recent study conducted by the University of California, Berkeley and San Francisco, have revealed that managed care organizations – health care planners who are trusted with providing coordinated care for individuals receiving both Medicare and Medicaid – are falling short of their intended purpose of coordinating quality care for dual-eligible beneficiaries.

According to a report by McKnight’s Long-Term Care News, managed care organizations are in fact paying “limited attention to… quality criteria” measures and are selecting nursing homes based on cost, rather than the overall standard of care.

Managed Care Organizations and Nursing Home Selection

The relatively small study was conducted over a three year period, beginning in January 2015 and focused specifically on Cal MediConnect (CMC), which is responsible for providing Medicare, Medicaid and long-term support to dually eligible beneficiaries in seven counties within California. The results of the study were published by the National Centre for Biotechnology Information.

The study focused on six indicators that determine the level of quality care provided by the nursing homes that the managed care organizations chose to partner with – indicators “that have been well documented by researchers and the Centers for Medicare and Medicaid Services to be useful metrics for quality,” including:

Deficiencies and violation of regulations.
Hospital readmission rates.
Overall nursing home rating.
RN staffing levels.
Successful discharge home.
Total staffing levels.

The findings were disappointing and revealed that of the 17 managed care plans that participated in the study:

Seven plans did not use any of the above quality criteria for selecting nursing home providers
One plan used 4 criteria
Four plans used 2 criteria
Four plans used 1 criterion
One plan would not provide this information

While California was the only state identified for this study, there are 12 other states within the United States that provide similar initiatives and the results of this study may warrant further investigation into how their managed care organizations are structured and how they select nursing homes to partner with.

Managed Care for Dual-Eligible Beneficiaries

According to The Community Living Policy Center and the UC Berkeley Health Research for Action Center, individuals who are eligible for both Medicaid and Medicare services often face unique difficulties and require complex support “including medical care, mental health care, and long-term services and supports.”

Dual-eligible beneficiaries (also referred to as “duals”), as a group, are more at risk than individuals who receive Medicare only and are more likely to:

Be re-hospitalized within 30 days of discharge
Become long-stay nursing home residents
Have high costs related to the use of long-term support services
Have poor health status
Live alone

When the unique needs of dual-eligible beneficiaries are not met (or even considered) during the health care planning process, larger issues arise that cause a snowball effect and negatively impact their overall health and wellness. The Scan Foundation released a report based on the findings of the study, revealing that unmet long-term services and supports for duals often led to adverse outcomes.

The report concluded that of the dual-eligible beneficiaries polled:

57% didn’t get bathed
51% couldn’t get to the bathroom
47% missed important health appointments
46% didn’t change clothes
38% had to stay home
35% had to stay in bed
32% made a medication mistake
28% went without groceries

Charlene Harrington, Ph.D., a professor emeritus with the University of California, San Francisco and one of the study’s authors, believes that the issues of quality or lack thereof are widespread and as a general rule, managed care organizations “seem to be contracting based on cost rather than quality.”

The authors of the study recommend that this issue could be remedied if the managed care organizations who are responsible for planning the care of beneficiaries “developed specific quality criteria” based on publicly available quality ratings and required that nursing homes meet basic standards in order to participate in their networks.

Are your, a parent’s or senior loved one’s experiences in line with these findings? We’d like to hear your stories in the comments below.

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