For much of my career, the intellectual/developmental disability (I/DD) support services market was not affected by many of the environmental drivers affecting the rest of the field. But in the past five years, we’ve seen that change. That was very apparent in my conversations last week at The 2017 OPEN MINDS I/DD Executive Summit – which were a déjà vu moment from similar discussions in behavioral health in years previous.
Right now, in the $282.9 billion long-term services and support (LTSS) market (see The Big Medicaid Spend On The 65+ Population), I think there are four key drivers of change (along with the specter of federal block grant proposals) in provider organization strategy:
- More consumers with I/DD are covered by home- and community-based services (HCBS) waivers – and changing HCBS rules
- More consumers with I/DD are getting health care needs met via Medicaid managed care plans
- More LTSS services are in managed care
- More competitive bidding for I/DD support services
The HCBS waivers have had a big impact. Our opening speaker, Dr. David Braddock, gave an update on his national research, reporting on the declining use of institutional living settings – and he showed a decline in intermediate care facilities (ICF) utilization, from a high of 194,650 in the 1960s to 21,103 in 2015. My colleague Athena Mandros covered this in more detail last week (see The Future Of IDD Is In The Home).
And then there is managed care. Half of the consumers in Medicaid with an I/DD condition receive services through a Medicaid health plan. Now 15% of those consumers have their support services financed through managed care (For more on managed care in the LTSS space, see our OPEN MINDS Market Intelligence Reports – State Medicaid Programs With MLTSS: The 2016 OPEN MINDS Update and What Are The Major Provisions Of The 2016 CMS Medicaid Managed Care Final Rule?: An OPEN MINDS Market Intelligence Report).
The question for management teams of provider organizations is how to prepare – a question that I posed in my closing keynote at the Summit, Success In An Era Of Uncertainty: Does Size Really Matter?. Some of my advice is straightforward. First, do the basics (billing, performance, measurement, etc.) well (see In The Land Of The Blind). Second, develop a scalable and profitable community-based service line or expand the ones you have. Third, develop a strategy to address the changes in Medicaid in the specific states in which you operate – for most of those states that will include a direct or indirect relationship with Medicaid health plans. And finally, prepare for a shift to payment based on value rather than volume or cost.
Whether reimbursement comes from Medicaid health plans, or competitive government RFPs, or pay-for-success initiatives funded with social impact bonds, the need to demonstrate “value” will be of increasing importance. This will involve technology infrastructure to both support performance measurement capability and optimize the value of consumer care through reduced cost and improved experience – with the capital and leadership team to make this happen. (This transition to value-based reimbursement is one that we have covered in Value-Based Reimbursement As Clinical Best Practice Driver, The Value-Based Reimbursement Steeplechase, and Value-Based Reimbursement Developments Continue Reshaping (Every) Market.)
I think the challenge in this transition – in evaluating HCBS waivers, in evaluating Medicaid health plans’ performance with this consumer group, and in evaluating the value of provider organization – is the lack of stakeholder agreement on the measures of performance in serving consumers with I/DD. And, beyond performance measures, I think there is limited consensus on the “right service package” for a particular consumer. In the month ahead, we’re planning to do more on the current “measures of success” in serving this population. In the meantime, lack of agreement is unlikely to slow the shift in the market.