According to a 2013 study conducted by The Long Term Care Community Coalition (LTCCC), an organization dedicated to improving nursing home care in New York, the state’s new Managed Long Term Care (MLTC) policy may reduce the overall quality of care in nursing homes. The report, titled “Mandatory Managed Care in New York State Nursing Homes,” also concluded that the new managed care initiative will likely limit where consumers can go to receive long term nursing home care. In some instances, consumers may be forced to stay in facilities that aren’t equipped to meet their needs or have a history of fraud, neglect or abuse.
In 2011, New York’s Medicaid program spent $8 billion on nursing home care. New York currently has the largest nursing home population in the United States; one in ten nursing home residents are from New York. In response to the growing and costly program, Governor Cuomo announced in 2011 that his administration was going to redesign the state’s Medicaid policies to improve care, reduce costs and achieve a more “efficient administrative structure.” Because one-third of the state’s Medicaid funding goes to nursing homes, the nursing home industry will be greatly affected by the new changes, which will be implemented in 2014.
Under the old Medicaid program, in what was known as a “fee for service” policy, Medicaid would pay for any costs incurred when a service was provided by a health care facility, including nursing homes. Under the new program, known as Managed Long Term Care, the state will pay private health insurance companies a set rate to cover patient care. The insurance companies can then determine which nursing homes they want to include in their networks.
According to the LTCCC’s report, insurance companies, which are in the business of making a profit, will have an incentive to contract with the cheapest nursing homes, which will then cut care to reduce expenses to remain competitive. The report states, “While the state is developing guidelines for nursing home pricing…they are not mandatory and there may be little to prevent a downward spiral wherein plans contract with the cheapest nursing homes in the area, precipitating cost-cutting by nursing homes on staffing and other direct care expenses in order to stay competitive.”
In addition, the report pointed out that MLTC will limit where patients can go to receive care. Under the old Medicaid system, consumers could choose from 600 nursing homes throughout the state. Under managed care, however, consumers may be prevented from choosing a home that meets their needs because their plan may not have a contract with the facility. The report states, “the state will allow MLTC plans to contract with any licensed facility, whether or not it is adequately staffed; has a record of poor care, abuse and neglect (even those designated as “Special Focus Facility”); or a history of fraud. Though plans will be providing guidance to people on choosing a nursing home in their network, there is nothing to stop them from directing people to nursing homes with a history of poor care.”
While the MLTC was designed to improve care and reduce costs, the LTCCC’s report revealed that the program may adversely impact care in the nursing home industry.
The entire LTCCC study can be accessed here.
