State moves toward managed care

TRENTON, N.J. - A proposal that would shift about 121,000 Medicaid beneficiaries from fee-for-service into managed care plans caught home medical equipment providers by surprise in February.

The proposal would affect what is known in New Jersey as the "aged, blind and disabled (ABP)" population.

"That population is one that our membership does a great deal of business with," said Wendy Russalesi, executive director of the Jersey Association of Medical Equipment Services (JAMES). "These are high-needs patients who may not be best suited for managed care."

The proposal was included in the governor's $29.4 billion budget plan released Feb. 22. New Jersey is facing a $900 million cut in Medicaid funding.

Rusalessi's concerns are well-founded. The state, which already mandates managed care for other beneficiary groups, has sometimes auto-enrolled ABP beneficiaries in managed care plans. Those beneficiaries often opted out of the managed care plans back into fee-for service.

"The programs presented a host of challenges for them to receive the level of service and products that they were used to," said Rusalessi.

Another concern: Whether the state's four managed care networks can handle such a large influx of patients.

JAMES has begun surveying its members.

"What we are hearing initially is that many providers don't have access to the contracts," said Rusalessi. "They have tried for many years, but the managed care companies have told them the networks are sufficient and are closed."

At any rate, there isn't enough time for providers to contract with a managed care network by July 1--when the budget takes effect.

"The contracting process with most insurances is three to nine months," said Bob Miller, president/CEO of Bach's Home Health Care in Hackettstown and a JAMES board member. "That's not enough time to get anybody onboard."

And having a managed care contract comes with its own problems.

"They have poor payment histories and very low reimbursements," said Miller. "It's a race to the bottom."