Despite warnings, the state is about to make a big mistake — again. The Department of Social Services is planning to renew PCMH Plus, the risky Medicaid experiment that has cost the state more while doing nothing to improve care, and jeopardizes hard-earned progress. Two years ago, when the state wanted to expand PCMH Plus the first time, advocates raised alarms because we had no data on how it was working or what it cost in its first year.
The state expanded the program anyway. Now we do know what happened in that first year — and it’s not good. Instead of learning from the mistake, DSS is plowing ahead on the latest expansion without information. They tell us that if we wait a bit longer, it will get better.
PCMH Plus is Connecticut Medicaid’s shared-savings program benefitting large health systems called Accountable Care Organizations (ACOs). Under the program, ACOs are paid half of any savings they generate on their members. Shared savings has failed in other states and programs. ACOs can save money. They can improve health, for example, by keeping people out of emergency rooms.
Conversely, they can deny needed care, as private insurers did under a very similar payment scheme. Since 2012, when Medicaid fired the private insurers that had been gouging taxpayers and failing members for over a decade, we are saving almost $1 billion a year, many more providers participate in the program, quality is up, and people are getting access to care. But that progress is fragile.
Reports from PCMH Plus’ first year became available months after the first expansion had been implemented. PCMH Plus cost taxpayers well over $1 million in higher costs and rewarded lower-quality, higher-cost health systems. Furthermore, PCMH Plus payments did not correlate with quality improvement. The highest- and lowest-quality ACOs were awarded the same incentive payments per member. Outpatient emergency care rates, a vitally important indicator of quality and access to care, were more than 30% higher for PCMH Plus ACOs than other Medicaid members. There is good evidence that ACOs are artificially gaming the system to boost their payments.
There is nothing to suggest that going forward, ACOs are doing anything differently than they did in the first year. Compliance reviews by outside consultants are cursory and driven by the ACOs, very similar to consultants’ superficial reviews of the private insurers before 2011. Despite these and other warning signs, DSS is moving forward with another expansion.
It’s very hard to stop a failed program, especially the shiny new policy toy. It took over a decade to get our Medicaid program out from under private insurers, despite considerable evidence it was failing. This is a broader problem than PCMH Plus in Connecticut. The status quo is hard to overcome. Over time, bureaucrats become attached to their programs and blind to the problems within. It’s hard to walk away from an investment that’s failing. Consultants who helped set up the program are heavily invested. And large health systems like ACOs have massive political and lobbying clout at the Capitol to keep the payments coming.
Advocates own some of this mess. We did participate in the design of the program. But we parted ways with DSS during implementation when they failed to include robust evaluations to guard against harm to members or taxpayers. We took great exception to DSS’ inadequate notice to consumers. Advocates had to inform consumers of the risks when DSS wouldn’t.
It’s time to let this failed experiment go. Taxpayers don’t have extra cash to spend good money after bad, and Medicaid is finally working. Let’s put our efforts into testing new, proven solutions for the remaining problems in the program. This time, we need to honestly evaluate results, learn from mistakes, and be brave enough to change course if needed.
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