Think Tank

What’s Best Enrollment Process for Dual Eligibles?

California is in the midst of formulating a series of steps to move people eligible for both Medicare and Medi-Cal — known as dual eligibles — into a new managed care environment. Medi-Cal is California’s Medicaid program. The state is one of 15 around the nation to receive a federal grant to improve care coordination for the dual-eligible population.

Because dual eligibles are often heavy users of the health care system, the benefits of this shift could be significant for both beneficiaries and the state. Dual eligibles, who tend to have chronic health conditions and rely on services from numerous health care providers, could have their lives simplified and health outcomes improved through a more coordinated approach. In addition, the state could save money through better management and reduced costs with managed care, as compared with some fee-for-service care.

About 1.1 million people qualify for both forms of subsidized care in California — significantly more than any other state and about 13% of the nation’s dual eligible population. One goal of California’s demonstration project is to bring multiple kinds of care — behavioral health, social support, medical care and long-term coverage — under one administrative umbrella.

The state Department of Health Care Services, which is orchestrating the Duals Demonstration for Coordinated Care Delivery, seeks collaboration from counties, beneficiaries, health care providers, health plans and advocates.

Among the many organizational and administrative decisions the state faces in making this shift to managed care is how to enroll people in new coverage in which one entity is coordinating care. Because only a small number of dual eligibles already are in managed care in California, shifting the remainder will be a significant part of the project.

One of the key decisions the state faces is how to orchestrate that movement. At a basic level, there are two options — either beneficiaries choose or the state chooses. However, under either option — or a combination of both options — there are dozens of details and circumstances that make the issue much more complex than a simple “either-or” decision.

We asked policymakers and stakeholders to consider the pros and cons of various enrollment options — voluntary, mandatory, passive, active, opt-in, opt-out.

We got responses from:

Ensuring Health, Safety Is Primary Goal

The importance of the enrollment process for the Duals Demonstration cannot be overstated and should be a source of ongoing public discussion. When designing the enrollment process, the state must consider numerous factors, but most important is ensuring the health and safety of beneficiaries.

Today, the current care system attempts to address dual eligibles’ needs through a complex web of providers and multiple government funding sources, including Medicare and Medi-Cal. The result is a system that can seemingly be more concerned about who pays the bill than with providing the best possible services. The Duals Demonstration is at the heart of the department’s rebalancing initiative that aims to promote better-coordinated and beneficiary-centered care by combining the full continuum of services dual eligibles need into a single benefit package, delivered by a single organization responsible for coordinating all services.

An important aspect to building superior models that include expansive provider networks and robust care management systems is guaranteeing health plans will have sufficient enrollment. Redesigning the delivery system is tremendously challenging and only will occur if there is a critical mass ready to use the better system. A passive enrollment process that allows beneficiaries to opt out is most likely to achieve this sufficient network adequacy and quality care management system.

Ensuring beneficiaries receive timely and accessible information on the changes and their options will be an essential part of the enrollment process. In doing so, the department will build upon lessons learned from the enrollment of seniors and persons with disabilities into Medi-Cal managed care.

We at DHCS believe beneficiaries will experience improved health outcomes and satisfaction from coordinated care organized under the Duals Demonstration. The enrollment process must balance many factors, but beneficiaries’ right to be informed is always essential.

Buy-In, Large Pool, Are Keys to Success

Increasing demand on Medicaid and Medicare to improve service quality and contain costs has the state and federal governments looking for solutions. The duals demonstration, initiated by the Medicare-Medicaid Coordination Office within CMS, is offering the promise for those solutions.

The stakes are high. Many dual eligibles have multiple chronic conditions and complex health, behavioral, and long-term services and supports needs. Many want to retain their current providers and direct their own care. States are waiting to model best practices. CMS wants to lead the way to a better service and financing system for duals. And, Congress wants to know what states and CMS will do with the flexibility and limitations of post-Accountable Care Act law. All are counting on the demonstration’s frontrunners to succeed.

If California’s proposal to form integrated Medicaid and Medicare plans is approved by CMS, the state could be one of those frontrunners. The design of these plans must be just right to ensure that coordinated care can improve health outcomes and prevent costly nursing home and hospital care.

Success will not be possible unless integrated plans get buy-in from their dually eligible consumers and have enough enrollees to pool risks and establish buying power.

Voluntary enrollment maximizes consumer choice. The “Request for Solutions,” released by DHCS on Dec. 22, 2011, takes this option off the table. Why? Because experience from across the country shows that recruiting on a person-by-person basis is not likely to result in sufficient enrollment to make plans actuarially sound. According to the document, DHCS is considering the following two enrollment options.

Passive Enrollment With Opt Out: To get consumer buy-in, dual eligibles need options. Having the ability to switch plans or return to fee-for-service gives consumers these options. Providing them with the tools they need to make informed choices is critical. The ability to opt out could promote competition across plans. To gain consumer loyalty, plans may be encouraged to offer broad service lists, a host of consumer direction options and meaningful consumer protections.

This method may result in greater plan enrollment. Greater enrollment could help California develop appropriate capitation rates. It could also result in greater funding for plans, allowing them to build more diverse provider networks with sufficient geographic reach. Greater plan revenue may also allow plans to adequately pay care coordinators and deliver higher quality care.

Enrollment Lock-In for up to Six Months: Getting consumer buy-in up front may be hard. Because of the initial absence of plan choice, the state may need to place even greater pressure on plans to offer broad and diverse provider networks, consumer direction opportunities and consumer protections. Once the six-month requirement is lifted, competition could be generated across integrated plans, possibly raising the bar on quality and consumer choice.

Employer-sponsored insurance often limits enrollees’ ability to switch plans to once per year. DHCS’ proposal considers requiring consumer adherence to a plan for up to six months. Mandatory enrollment could allow for predictable enrollment counts. Predictable enrollment could allow plans to better manage risk. It could also grant plans enough buying power to develop larger and more diverse provider networks and services. This funding guarantee could attract more plans to the market and thus increase competition for state contracts. Finally, it could result in predictable state expenditures, facilitating state budgeting and the development of plan rates. Up to six months of mandatory enrollment, however, may not be long enough to ensure such predictability.

This demonstration offers the promise for solutions. The state and consumers will likely be faced with hard and possibly unwanted choices. The way in which California uses the demonstration’s regulatory flexibility could determine whether all of the demonstration’s objectives are achieved. Learning from California’s shift of seniors and persons with disabilities into managed care is essential in designing the demonstration and in monitoring its impact on dual eligibles.

Opt-In Enrollment Honors Autonomy, Individual

As California experiments with new models for integrating the care provided to dual eligibles, it’s important that dual eligibles retain their right to choose how, where and from whom they receive care. Choice begins with a truly voluntary “opt-in” enrollment process in which individuals are provided the opportunity to enroll affirmatively in a managed care plan, but are not required to enroll or be automatically enrolled by the state.

An “opt-in” enrollment process honors the autonomy and independence of the individual by preserving for low-income Medicare beneficiaries the same right to provider and delivery system choice as that of middle- and higher-income Medicare beneficiaries. Preserving that choice is key to maintaining continued access to specialists and other providers that may not participate in the integrated model, particularly for those with complex medical conditions.

Voluntary “opt-in” enrollment processes have been used to develop integrated models that are generally regarded as positive, beneficiary-centered programs. For example, the Program for All-Inclusive Care for the Elderly (PACE) uses an “opt-in” process. An “opt-in” process promotes accountability because managed care plans that do not provide a high-quality, coordinated experience will have trouble attracting and retaining enrollees.

Federal and state policymakers as well as managed care plans are increasingly advocating for “opt-out” enrollment processes. In an “opt-out” system, dual eligibles would automatically be enrolled into an integrated care model, but would retain the ability to “opt out” of that enrollment. The right to “opt out” alone is inadequate to protect dual eligibles from harm. A dual eligible who is automatically enrolled into an integrated model may not realize that the model is not a good fit (for example, that current providers are not part of the network) until after the enrollment has taken effect. By that time, the individual may have experienced a disruption in care that opting out in the following month comes too late to remedy.

An “opt-out” model is particularly problematic if applied to new, untested integration models. At their start, the ability of such models to deliver beneficiary-centered care coordination is unconfirmed. As models are implemented and thoroughly evaluated, it may be appropriate to consider more aggressive enrollment strategies. Until then, an “opt-in” enrollment system provides the best way to ensure that the new models grow into effective, beneficiary-centered programs.

Mandatory/Passive Enrollment Will Ensure Large Pools

In order to ensure that duals pilots are fiscally viable, it is essential that there be a large enough and heterogeneous enough number of dual eligibles in each pilot. Without mandatory and/or passive enrollment, there is the risk of too small a pool of duals being enrolled. There is also the risk of adverse selection if a disproportionate share of those who voluntarily enroll have inordinately high costs of care coordination and/or health care service delivery. You need some version of passive or mandatory enrollment to assure having a sufficient number and broad cross-section of healthier and less-complex care cases along with the more serious complicated care situations.

Our experience with voluntary enrollment with our special needs plan demonstrated the problems of voluntary enrollment for this population. The care management structure necessary to meet the needs of the duals population with complex care coordination needs requires a sufficient number of members with adequate total capitation to fund both the care management staffing and infrastructure and the health care services needed by the at-risk dual population. If you have only a small number of duals in a pilot, there is a greater likelihood of unacceptable financial risk. Serious medical conditions involving expensive care for only a handful of individuals could disproportionately consume financial resources, putting the overall fiscal viability of a pilot project site at risk.

It will be challenging to attract a sufficiently large and broad enough cross-section of duals on a purely voluntary opt-in basis. Mandatory and/or passive enrollment will be essential to ensure that the pilots have a large enough membership to have the opportunity to prove that they can be successful in integrating care and offering a broader continuum of care options to duals.

Once the duals pilot service delivery model has been validated, hopefully this successful track record will make it possible to attract a high proportion of voluntary enrollees who will want to seek out the enhanced care coordination and broad range of home- and community-based care options that the duals pilot service delivery model will offer.

Once the duals service delivery model is able to demonstrate to its potential clientele that it will be able to reduce the risk of emergency room usage, hospitalization, and nursing home care and offer home- and community-based alternatives, the duals population should be actively willing to enroll in health plans offering them that opportunity.

Voluntary, Opt-In Enrollment Is Best

Almost two decades ago, the board of directors of Disability Rights California (then called Protection and Advocacy Inc.) adopted principles for addressing Medi-Cal managed care proposals.

First principle: Enrollment in managed care must remain optional for Medi-Cal beneficiaries with disabilities.

Nothing has happened since 1993 to change our view: voluntary opt-in enrollment is the best option. It is the only option which reflects and guarantees another of our guiding principles: publicly funded programs and services must support self-determination.

Self-determination means having choices. Choice begins with the opportunity to “opt-in” to managed care overall and integration demonstrations in particular. Autonomy and independence are as critical for our clients with lower incomes as they are for middle- and higher-income Medicare beneficiaries. Medicare guarantees all its members the right to choose whether or not to go into managed care; why would California void that guarantee for its residents who are low-income?

People who are dual eligibles are said to have higher health needs than even the “single eligible” seniors and people with disabilities. We agree. Some of them have spent years finding medical providers, including specialists, who are familiar with their disabilities and with whom they are comfortable, and have struggled to find medical providers whose offices are accessible to people with disabilities. Those precious connections are at risk if they are forced into managed care.

California’s current experience with mandatory enrollment for seniors and persons with disabilities who receive Medi-Cal only, demonstrates the dangers of mandatory passive enrollment: people receive reams of complicated materials (and not in a language or format they can necessarily understand) and then are expected to make an informed choice. They didn’t. Instead, the majority were enrolled with providers who may or may not have been suitable for them … may not have spoken their language, may not be familiar with their medical needs, may not have been accessible.

Anything other than a voluntary enrollment, based on clear and usable consumer information, would be especially inappropriate for California’s untested integration model.

As a person who has both Medicare and Medi-Cal recently stated: If managed care really improves the health and lives of its subscribers, the state won’t have to force me to enroll in it.

Success Depends on Good Assessments, Planning

The Congress of California Seniors welcomes the effort by Gov. Jerry Brown’s (D) administration to develop a better way to provide care and services to some 1.2 million dual eligibles. It is important to get it right because the number of these folks will increase significantly in the coming years. The demonstration, if done right, may achieve two of our long-held goals:

  • Creating financial incentives that encourage community-based care over institutional care; and
  • Integrating long-term services that are consumer-friendly and are coordinated with the client in the middle of the process.

The whole system depends on good assessment of each patient and development of an appropriate plan of care and services which is regularly re-evaluated. It should include care navigators who assist clients and their family or caregivers.

There is great potential to find ways of saving money while we extend and improve service. But there are big challenges. Most savings will come from reducing unnecessary hospital and nursing home costs. The state will have to have the proper agreements with Medicare, where most institutional costs are born. We will need to blend two very different rate structures and guarantee that some of the savings will be reinvested in more and better community-based services (not just to reduce projected deficits).

As the state proceeds, it will need to make sure we don’t rush to grab savings. Clearly, the recent shift of Medi-Cal seniors and disabled was not allowed the time to get it right. We have to blend two very different cultures of providers: community-based folks who usually look at the whole person and are client-centered versus health care providers who are quick to prescribe a pill and get the patient out of a costly hospital bed.

A few counties are ready to undertake this transition, but most are not. Phase-in should be based on a hard analysis of each plan’s readiness and the capacity of the community. Passive enrollment for many people can work if there are sufficient opt-outs and consumer protections. It does not work for others. High-cost, high-needs patients need special consideration. The state should enroll people on their acuity, the complexity of their needs, not just their date of birth.

We see the potential for great improvement and the risk of big problems if the state cannot finance access to quality care and long-term services.