And Then There Were Two: Mass. Struggles to Make Duals Demo Succeed

By James Gutman - June 24, 2015

Massachusetts had probably the toughest assignment in making a CMS-backed demonstration for Medicare-Medicaid dual eligibles work — and it’s about to get even harder. Fallon Total Care, one of three chosen plans that actually started the demo (three others dropped out before the demo started in late 2013), said on June 16 that it would leave the program Sept. 30. It had tried to find a way to stay, Fallon said, but ultimately had to decide that continued participation was “not economically feasible.”

This will leave only Commonwealth Care Alliance and the Network Health unit of Tufts Health Plan as participants, and CCA last August told staff members it was losing $1 million a month because of such issues as difficulties finding cost-effective outpatient care and services for duals with major behavioral health disorders. Losses have declined since then, CCA CEO Bob Master, M.D., told The Boston Globe, but he added that “we do not think we will get to break-even until 2016.” And this is even after the federal and state governments acted to add risk corridors for years two and three and a higher-than-previous corridor in year one to aid the Massachusetts demo plans. They also reduced the expected savings percentages, thereby in effect boosting pay for the demo insurers.

So what is the problem in Massachusetts, and what does it mean for the rest of the demo? For one thing, the state is the only demo participant serving only duals under age 65, a population known to have very high rates of serious behavioral health disorders and homelessness. For another, it was the first demo out of the gate and therefore the most susceptible to scare tactics that contributed to very high opt-out rates. The May 2015 state-issued enrollment report shows there were 27,396 duals opt-outs as of May 1, well above the 17,637 duals enrolled in the plan. And this is despite a state survey finding a 94% satisfaction rate among duals who stayed in the demo.

There have been some plan pullouts in other demo states, and a few of the demos are just getting started, so it’s not clear yet to what degree they are experiencing the same problems as in Massachusetts. The other demos have mainly over-65 populations who, perhaps counterintuitively, are less expensive than the under-65 duals, but many of the problems that the Massachusetts plans are experiencing seem likely to be replicated elsewhere.

What do you think will happen with the duals demos in Massachusetts — and elsewhere — in light of the slow-to-develop cost savings? Since seemingly everybody agrees that the goals of the demo, especially true coordinated care for one of the nation’s most vulnerable and costly populations, are absolutely correct, what is the major problem, and how can it be solved? What can be done to keep health plans in these programs without giving away more than anyone can afford? How do we prevent what was conceived of as a great opportunity for both plans and beneficiaries from becoming just a footnote in a history book about well-intentioned failures?

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