Report Critical of New York Managed Care Company Practices

The New York Medicaid system is the primary means of providing long-term care to many seniors in the state. However, the system’s popularity led to financial strains, and public officials have worked for years to address rising costs and budget challenges. The most popular large-scale change to the program pushed by reform advocates is referred to as “managed care.”

The idea of managed care is to move away from paying service providers per specific task provided and instead compensate them a flat fee for each resident–regardless of what care the resident needs. The idea is to eliminate the company’s incentive to provide care that is not needed simply to increase their reimbursement. By providing a flat fee per resident, caregivers are incentivized to provide efficient, quality care.

Purging “Unprofitable” Clients?
Unfortunately, as discussed in a scathing New York Times story last week, many advocates are worried that companies are simply resulting to different tactics to save money. The article suggests that companies providing managed care services to New York residents engage in underhanded means to sign up only clients who needed minimal care. Those in most need of help–often bed bound seniors–may have been cut from the program. Some lawsuits suggest that companies engage in horrific conduct by doing everything possible to drop undesirable patients.

Summarizing the problem, the NYT piece suggests that in recent months, “Many frail people with greater needs were dropped, and providers jockeying for business bought, sold or steered cases according to the new system’s calculus: the more enrollees, and the less spent on services, the more money the companies can keep.’

However, state officials argue that if there are problems of this nature since the shift to managed care, they are isolated issues–not systematic problems. That account differs from many residents who suggest that managed care companies ‘hounded’ them with aggressively sales tactics, hoping to entice them to sign up for services–likely because they were not as frail as others and would be cheaper to provide care for. In fact, there is currently no independent assessment of need for care, as the service companies themselves are usually able to determine if a resident is fit for enrollment. One advocate suggested that this was like “leaving a hungry dog to guard the meat shed.”

This debate is a reminder that even the best-intentioned changes, meant to improve care and efficiency, often have unintended consequences. Senior residents are usually the ones who bear the brunt of those consequences. As a result, it is always superior to work with elder law professionals as early as possible to craft plans that position you and you loved ones to receive quality care and support.

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