Pennsylvania officials on Tuesday named three companies to manage long-term care for 420,000 low-income Pennsylvanians in a massive overhaul of how nursing home stays, home care, and other supports for the elderly and the physically disabled older than 21 are paid for.
The winners of statewide Medicaid contracts were AmeriHealth Caritas, a subsidiary of Independence Blue Cross; a unit of Centene Corp; and UPMC for You, which is owned by the University of Pittsburgh Medical Center. Fourteen insurers, including Health Partner's Plans, of Philadelphia, put in bids.
Morgan Stanley estimated that the program, called Community HealthChoices, could be worth an aggregate of $5.4 billion in annual revenue.
"We are committed to increasing opportunities for older Pennsylvanians and individuals with physical disabilities to remain in their homes," Pennsylvania Department of Human Services Secretary Ted Dallas said.
"Right now 95 percent of the people we serve want to live in the community, want to age in place. Right now I only serve 51 percent of them in the community," Dallas said.
The state's Department of Aging is also involved in the move to managed long-term care, called Community HealthChoices. The new program supplements managed physical and mental health care for Medicaid beneficiaries in Pennsylvania. The new program also covers people who are eligible for both Medicare and Medicaid.
Frequently asked questions and a video explaining the program are available on the department web site.
The program starts July 1, 2017, in Southwestern Pennsylvania, and will take effect in 2018 in Southeastern Pennsylvania. Individuals now eligible for home supports or nursing home care will have to sign up with one of the three companies managing the benefits. The state's goal is to save money through better coordination of care and by keeping people out of costly nursing homes.
Dallas said the average annual cost of nursing-home care in Pennsylvania is $61,000, compared to $31,000 a year for community-based care.
Camille Dobson, deputy executive director of National Association of States United for Aging and Disabilities, said Pennsylvania is the 24th state to adopt managed long-term care for the Medicaid population. New Jersey did so in 2014.
States adopt the approach to "integrate a fragmented system," Dobson said, and "that allows the state to hold one entity accountable for outcomes."
It also helps brings predictability to state budgets because states pay set amounts per month to the managed care companies.
The managed care companies are expected to reduce the nursing-home population. "They have an incentive because of the way they are paid to go into nursing homes and see if they can identify folks who could successfully live in the community and transition them out," Dobson said.
A trade group for nursing homes urged state officials to go slowly.
"The [Pennsylvania Health Care Association] continues to believe that they should proceed carefully, and take the necessary time between the implementation of each phase to make any program modifications that may be necessary in the best interest of consumers and those providing care and services," the group's president, W. Russell McDaid, said in a news release.