Medicaid Expansion and Managed Care – Key Issues to Address as Debate Moves Forward

An important issue being considered by the General Assembly is how Indiana will respond to the Affordable Care Act (ACA), including whether or not Indiana will expand Medicaid.  Tied to this debate is the issue of Medicaid Managed Care.  HB 1591 is the bill that is currently being considered as a vehicle to debate issues related to the ACA.  The Arc of Indiana offered testimony on the bill in the House Health Committee on February 13.  The bill passed out of the committee and now moves to House Ways and Means.  Following are key concepts shared in The Arc’s testimony.  To keep up-to-date on the progress of this and other key issues The Arc is following, be sure to sign up to receive legislative memos and action alerts by visiting our legislative action center.

Medicaid Expansion

Medicaid expansion will allow more people with disabilities to work and not be concerned about losing health care benefits.  Nearly 80% of people with disabilities are unemployed.  Being able to work, but maintain Medicaid coverage for health benefits, will benefit the quality of life of people with disabilities and the communities in which they live.

Secondly, expansion will greatly help working families who have a child with a disability and earn too much to be eligible for Medicaid.  They may currently be uninsured because their employer does not offer benefits, they work multiple part-time jobs, or they earn too little to be able to afford family health care coverage.  Providing coverage for their child with a disability will give the child access to critical therapies and health care services that will not only help the family financially, but will also start their child on the road towards health and independence as an adult.

A recent study released by the Indiana Hospital Association dramatically points out the gains that could be realized to Indiana’s economy by moving forward with Medicaid expansion.  There are costs and risks, but the gains to our economy are significant.  And for people with disabilities as with all Hoosiers, a growing economy is the number one issue that will help build a better Indiana – for all.

Managed Care

A key to managed care – an area The Arc believes must be addressed in a thoughtful way – is the contract itself with the MCO(s).   The direction established in the bill is important in that it focuses on quality health care outcomes and the use of home and community-based supports to the greatest extent possible.

No state has successfully developed a managed care plan for people who utilize long-term care services.  This would include people with developmental disabilities who live in group homes or who receive residential services funded through a Medicaid Waiver. For some people with disabilities who rely on long-term care this could mean 40-50 years of managed care.

Indiana must engage individuals in a shared savings concept that incentivizes the wise use of resources by consumers, and provide MCO(s) with the ability to transform care delivery by utilizing the knowledge of those who have the experience to know what actions will best lead to positive outcomes for people with disabilities. Integrating quality health care for this population is essential. The benefit package must be responsibly developed to reflect the diverse populations that will be served and include a range of preventative and wellness services.  Without such services, consumers will be forced to continue to rely on emergency room care, at a great cost to the state and at great detriment to the consumers’ health.

Many people with disabilities are struggling to maintain good health.  If structured correctly, a well run managed care program can provide improved disease management outcomes.  For example, many people with developmental disabilities have diabetes, but many are undiagnosed because their symptoms are attributed to something else – such as a man who keeps getting behavioral health services for “mood swings and unpredictable behavior” only to have someone finally test his blood sugar and realize he has diabetes.

Any contract with a MCO must have meaningful involvement with consumers, families and community agencies that have experience in serving this population.  If this becomes another disconnected bureaucracy that only just says “no”, we will not see better health care outcomes or lower costs.

The MCO(s) have to address adequate payment for services needed by consumers and the workforce needed to support them.  The Kaiser Commission on Medicaid states that establishing capitation rates for services provided to persons with disabilities poses special challenges and stresses that rates must be structured in a way that recruits strong provider networks.  Issues that must be taken into account include accommodations to make services accessible to people with a range of disabilities, an integration of behavioral and physical health, and coordinating acute and long-term service.  Because many providers lack experience in meeting the needs of people with developmental disabilities, involving community-based organizations that have worked with this population for years is absolutely essential.  While we believe it can be done, it must be done thoughtfully and carefully.

Another key consideration must be addressing outcome measures from the perspective of consumers, who must be engaged in the planning, monitoring and implementation of any managed care plan. For example if I have cerebral palsy and little control over my body, my doctor will need a specialized table to provide a proper exam.  Many people with disabilities do not receive basic preventative health care, such as pap smears, mammograms, or prostate screenings, because exam rooms and equipment cannot accommodate their disability.  A specific example is a woman in southern Indiana who was not diagnosed with breast cancer until it was in its late stages.  There was not an accessible mammogram machine in her area to accommodate screening her from a wheelchair, so she even though she was of an appropriate age and risk factor she never received the screenings other woman her age would routinely receive.

Strong state oversight is also essential to any managed care plan that is put in place for at risk populations.  Several states have developed “secret shopper” programs to measure access and quality.  Adequate state staff capacity and resources to conduct these operations and enforce standards are fundamental.

The Arc strongly supports studying the experience of other states regarding managed care, and welcomes the opportunity to participate in that process.  Iowa has 12 years of data on how community agencies enhanced service coordination, leading to improved outcomes and lower overall costs – including hospitalizations and incarcerations.

Key decisions that the state will need to make in implementing a managed care model will include:

  • Opting for a statewide rollout or pilot demonstrations
  • Creating competition or collaboration incentives
  • Establishing statewide or regional entities

Once these decisions are made transition plans should be put into places to allow consumers to use their existing health care providers for a period of time as new provider networks are developed.  Networks should include all willing and qualified providers so that the network reflects the diverse needs of people in communities across the state and brings in providers who have a history of serving at risk populations.

The establishment of any managed care plan must also be extremely mindful of the importance of creating a program that does not create roadblocks and disincentives to moving people from unemployment to employment.

As the issues of Medicaid expansion and managed care continue to move forward, please do not hesitate to us at or 317-977-2375 with any questions, comments or concerns.