Assessing the Impact of State Policies Transitioning Long Term Care Services and Supports from Fee-for-Service to Managed Care

Background: Medicaid waivers provide states flexibility from the provisions of the original statutes. We present early findings from the evaluation of a New Jersey Comprehensive Waiver related to expansion of managed care services to cover long term services and supports (LTSS) for Medicaid beneficiaries requiring nursing facility (NF) level of care. Beneficiaries were either community-based and receiving home and community based services (HCBS), or resided in NFs. While physical and medical services were already under managed care, the waiver allowed inclusion of LTSS and behavioral health services into managed care.

Methods: Medicaid Fee-for-Service claims and manager care encounter date were utilized to examine the policy effects on access to care, quality of care and health outcomes. We examined potential effects on the population directly targeted by the policy comprising HCBS and NF residents using a difference-in-differences regression model. We additionally examined potential positive or negative spillover effects of the managed LTSS (MLTSS) program on the overall managed care population utilizing segmented regression analysis. Outcomes examined include ambulatory care sensitive hospitalizations and emergency department (ED) visits, hospital readmissions reflecting inoptimal care coordination and transition, and rates of follow up after hospitalization. All regression models controlled for patient and provider factors, accounted for clustering, and in the case of difference-indifference estimation, accounted for potential differences in pre-trends between the intervention and comparison groups.

Findings: We present early findings relating to the first six months after implementation. Findings over a longer follow up period are currently under review by federal and state agencies and will be available at the time of the meeting. There are broad similarities between the longer term trends and the findings presented here. Among the HCBS population, MLTSS implementation decreased the probability of an avoidable hospitalization over a quarter by 8%, but increased the rate of avoidable ED visits per person by 10%. While there was a decrease in hospital-wide readmission rates, other readmission rates exhibited an increase. There was a decrease in readmissions among individuals with behavioral health conditions. In the overall managed care population, we found no evidence of a decline in the quality of care. There was a statistically significant decrease in the level of avoidable inpatient hospitalizations and ED visits, but no change in overall utilization rates. There was an immediate decrease in the likelihood of four disease specific 30-day readmission rates, although only the 1.1 percentage point decline in hospital-wide readmissions was significant.

Discussion: Integration of LTSS, physical, and behavioral health services under managed care has potential to promote coordination of care that may improve population health outcomes. We see positive effects of increased efficiency on some acute care utilization. Our findings however, indicate that the policy effect is heterogeneous and differs across dimensions of care. It is important to note that these are based on a six month period when transitional issues relating to MLTSS were still being resolved. Additional results extending beyond the first six months of the post-MLTSS period will help determine whether any of these trends are temporary or persist.