According to analysis from the American Health Care Association (ACHA), providing managed long-term service and supports (MLTSS) for the elderly may be expensive in the short term, but they will provide long-term savings.
Here's how the concept works: Managed care organizations (MCO) operate under a set of principles designed to make healthcare cheaper. These MCOs "manage" the types of care that physicians and patients can choose; how long patients can stay at the hospital; which providers patients can visit; and how high-cost cases are handled.
Different types of network-based MCOs include health maintenance organizations (HMO), preferred provider organizations (PPO) and point of service (POS). If you have health insurance, then you probably have one of these types of plans.
MLTSS's are managed networks of long-term service and supports. These networks, according to the ACHA's paper, don't necessarily have better outcomes than other care models. However, the federal government has no national quality standards, and measurement systems are inadequate. Therefore, accurately measuring MLTSS effectiveness is difficult, if not impossible.
Ultimately, the ACHA states that MLTSS's may reduce long-term costs for states. They may improve beneficiary health outcomes and improve care management. However, managed LTSS may be either more costly or as costly in the short term.
To get MCOs to go along with the MLTSS model, states have to understand that an MCO is obligated to provide care for its beneficiaries. This obligation places MCOs at heavy risk. Therefore, the ACHA recommends that states give MCOs sufficient capitation, or payments per individual patient, while they build enrollment and gain management experience.
Currently, 16 U.S. states offer MLTSS programs. These programs accounted for only 5 percent of Medicare's LTSS spending in 2009. Under the Affordable Care Act, MCOs will provide all designated services to their beneficiaries. In exchange, they will receive capitated payments from Medicare and Medicaid.
The payments will continue to be fee-for-service until states make the transition to coordinated care models like accountable care organizations (ACO). As long as the payments cover beneficiary needs, then MCOs probably won't bail.
To protect themselves, the ACHA suggests that long-term care plans secure detailed contracts regarding rate setting, quality oversight and plan exits. If they don't, then they could end up either running deficits or running out of money.
Edited by
Frances Litvak
