A provocative study by patient advocates charges that three of New York’s Medicaid managed care plans are systematically and improperly denying care to elderly and disabled shut-ins. While the report raises possible concerns about the practices of individual plans, its findings do not warrant abandoning one of the Cuomo administration’s most important reform efforts.

At issue is the “personal care” program, which provides in-home non-medical help such as housekeeping, meal preparation, bathing, and shopping for Medicaid recipients who might otherwise need to move to a nursing home.

New York’s version of the program has long been viewed as a rife with waste, in large part because of its outlier costs. The tab for 2013 was $4.4 billion, accounting for more than a third of the entire country’s spending on personal care with just 6 percent of the population. Most of the spending is concentrated in New York City.

The state’s latest strategy for curtailing those costs is known as managed long-term care, under which specialized health plans (usually organized by providers) receive a fixed monthly fee to deliver the care that an elderly or disabled Medicaid recipient needs, including in-home personal care. The stated goal is to better coordinate services in hopes of both saving money and improving care. As part of its larger push to overhaul Medicaid, the Cuomo administration made enrollment in such plans mandatory for most long-term care recipients over the past five years.

Pushing back against the strategy is a study published last week by Medicaid Matters and the National Academy of Elder Law Attorneys, which analyzed seven months’ worth of appeals by patients who faced reductions in their personal-care hours.

Among the key findings:

• The number of appeals increased more than six-fold during the period studied, from 35 in June 2015 to 252 last December.
• The results of the appeals were lopsided in favor of patients, with managed long-term care plans fully prevailing in just 13 of 1,042 cases, or 1.2 percent.
• Patients fully prevailed more than 90 percent of the time, most often because plans either withdrew the proposed change or failed to appear for a hearing. The remaining 9 percent of cases ended in settlements involving smaller reductions in hours.
• Among dozens of managed-care plans contracting with Medicaid, just three–Senior Health Partners, VNSNY Choice, and CenterLight–accounted for 87 percent of patient appeals.

The authors called these findings evidence of a “systemic pattern of unjustified reductions,” suggesting that many other affected patients may have lost services they were entitled to, either because they were too intimidated to appeal or unaware of their rights.

The study raises a good question: Why are these three companies triggering so many more appeals than their competition? As a general indictment of managed long-term care, however, the report should be read with caution.

Here’s why:

• The report seems designed to bolster federal class-action litigation alleging that the managed long-term care plan is denying care in violating of patients’ constitutional rights. Lead author Valerie Bogart works for the New York Legal Assistance Group, the same organization that filed suit against the state and several managed-care plans in January.
• The rising number of appeals is at least partly explained by growing enrollment in managed long-term care and (as the report acknowledges) by a July 2015 rule change allowing patients to take cases directly to the state without first exhausting their plan’s internal appeals process.
• The 1,042 appeals examined represent less than 1 percent of the approximately 150,000 New Yorkers enrolled in managed long-term care. Of that group, fewer than 10 percent ultimately saw their hours reduced.
• There’s little evidence that plans are slashing service across the board. A 2014 audit of 402 newly enrolled managed long-term care recipients found that personal-care hours were reduced for 48, increased for 25, and kept the same for 329.
• While plans have an incentive to control costs, the Health Department also tracks dozens of quality measures, ranging from access to dental care, to levels of pain and loneliness, to patient satisfaction–with financial penalties for plans that fall short of standards. Properly done, this will more effectively assure good care than micromanaging the allocation of hours.

By contrast, the authors warn that the mere possibility of losing personal care hours can be harmful for patients.

Even for those who win their hearing, the threat of reductions inflicts stress and anxiety on extremely vulnerable seniors, people with disabilities, and their families. … Advocates contributing to this report are aware of clients who are frightened to request increases in hours that they acknowledge they need, for fear that the plan will try to reduce hours they already have.

The authors further note that the structure of managed long-term care – under which plans receive a fixed amount per month for each patient–creates a financial incentive to skimp on services.

It should be said, however, that the traditional “fee-for-service” Medicaid system gave providers the opposite financial incentive–to provide personal care whether it was warranted or not.

As of 2011, New York’s Medicaid program spent an average $30,197 on personal care for each person receiving services, compared to a national average of just $10,954. 

Unless we believe that the low-income elderly are three times sicker in New York than everywhere else, the state’s experiment with managed long-term care deserves a chance to work.