More than half of the states that applied to participate in a controversial CMS pilot for dual-eligible beneficiaries have either dropped out or delayed implementation of their programs, according to health policy experts.
Among the 26 states that applied to participate in the CMS Financial Alignment Initiative, which stems from the Patient Protection and Affordable Care Act, six have dropped out or opted for different “customized” plans and nine have delayed their start dates.
The large-scale pilot projects, which seek ways to rein in costs for the disproportionately expensive patient population, have drawn consistent criticism from beneficiary and provider advocates over their size and scope, as well as for aggressive implementation timeframes that had most starting by January 2014. Dual eligibles are among the highest-cost users of healthcare services in Medicare and state Medicaid programs.
Three states—Arizona, New Mexico and Tennessee—have officially announced they are dropping out of the program, said Caroline Pearson, vice president at Avalere Health.
Meanwhile Oregon, Minnesota and Wisconsin are looking to change their proposals into ones that might fit other CMS projects outside those specified for the financial alignment initiative, a CMS official said.
Eight other states have announced delays in the launch of their programs, including three of the six that have received CMS approval to start. California, Washington and Massachusetts received CMS approval to begin and subsequently delayed their start dates. Meanwhile, New York, Michigan, Hawaii, Iowa Missouri and Vermont have not received approval, but also plan to delay their start dates, according to policy experts tracking the dual eligibles' program.
“The timelines were always too ambitious; it's taking even longer to get stuff set up than they thought it would,” said Kevin Prindiville, deputy director of the National Senior Citizens Law Center.
The reasons for the delays vary, but common reasons across states include the rate-setting process for insurance plans that are expected to manage the dual eligibles' health to improve their care while reducing spending.
“Health plans are wanting to have a better sense what the rates are before moving forward,” Prindiville said. “It's taken a long time to figure out what the rates are going to be, and that's an ongoing issue.”
The rates were a major issue in the Massachusetts delay, said Renee Markus Hodin, program director at Community Catalyst, a Boston-based patient advocacy group. The delays have stemmed not only from disagreements over the overall funding the pilot will provide to insurers, but also over concerns that the underlying financial incentives were insufficient to encourage insurers to improve patients' health.
The Massachusetts pilot originally was slated to start in April before being delayed until July. Last week, state officials told advocates it has been delayed to an unspecified later date.
“There's a lot of issues to deal with,” she said.
Meanwhile, patient advocates have praised the delays, since they have been used to address at least some of their concerns with the pilots.
“It's certainly something that national advocates have been pushing for because the size and scope of the demonstrations are much larger than a lot of us are comfortable with,” said Andrea Callow, a policy attorney at the Center for Medicare Advocacy. “So to the extent that states are delaying in order to be sure that they are fully ready to move so many fragile people into managed care is a good thing and certainly something that we have been talking to” CMS about.
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