The Broken Magic Wand

Faulty Reasoning and a $1.9 billion deficit error contribute to the possible demise of the California Coordinated Care Initiative.

 By Jason Bloome

Part of the $1.9 billion accounting error announced by the Brown administration recently included the miscalculation of costs for the California Coordinated Care Initiative (CCI) program.

State officials double-counted the expected savings for CCI and undercounted the cost of the program in San Mateo and Orange counties by $573 million.

CCI is an experimental program currently active in seven counties designed to assess if enrolling dual-eligibles (beneficiaries on Medicare and Medi-Cal) with Health Maintenance Organizations (HMOs) can provide better health outcomes and save money.

The two parts of CCI consists of MLTSS (Managed Medi-Cal Long Term Support and Services) in which all dual-eligibles are enrolled with CCI HMOs to manage long term Medi-Cal services (e.g., IHSS, MSSP and long term care nursing home payments) and Cal MediConnect — in which dual-eligibles can voluntarily choose to have their Medicare services (e.g., hospital stays, short term skilled nursing facility (SNF) expenses) managed by the CCI HMO as well.

Primary goals of CCI include realigning long term support and services (LTSS) from expensive SNFs to more affordable home and community-based care settings.

CCI has many flaws which include a low Cal MediConnect enrollment rate (in most CCI counties participant enrollment is less than 50 percent and, in Los Angeles, the largest CCI county, only 19 percent of eligible dual-eligibles choose to participate with the program) and a faulty MLTSS rate structure which promotes institutions rather than community-based care settings, which include residential care facilities for the elderly (RCFEs).

There is no LTSS realignment without the participation of RCFEs, a core component along the care continuum for seniors who require 24-hour custodial care. Instead of removing barriers, CCI enacted new ones which prevented nursing home diversion/transition to RCFEs. CCI program design flaws reward CCI HMOs for placing seniors in SNFs (by fully reimbursing their SNF expenses) and punish them when offering RCFEs as a community-based care options (by inadequately funding RCFE expenses).

California needlessly spends spend millions of Medi-Cal dollars each year for expensive SNFs for thousands of seniors who could safely reside in affordable RCFE settings.

As an experimental nursing home diversion/transition program designed to save money CCI failed when it removed from the tool box any prospect of community-based care for seniors who require too much care to remain at home.

The California Department of Finance has found CCI not to be cost-effective and components of CCI have been cancelled while others are to be re-examined to: improve the quality of care for those enrolled, and help keep individuals in their homes and communities, thereby leading to likely long term cost reductions.

As state policy makers restructure CCI they should consider changing the nonsensical capitated rate model which classifies a senior who requires too much care to remain at home as “healthy” when he/she decides to reside in a RCFE. A senior who requires help with dressing, bathing, incontinence and/or help out of bed does not miraculously become “healthy” when he/she moves from one setting to another. Magic belongs in fairy tales not as the basis for a fractured public policy which forces seniors into nursing homes when they do not need to be there.

Jason Bloome is owner of Connections–Care Home Referrals, an information and referral agency for care homes for the elderly in Southern California. More information can be found at www.carehomefinders.com.