Tuesday, October 21, 2014

Palliative Care Mandate for California’s Medicaid Patients (SB1004)

On September 25, 2014, California Governor Jerry Brown signed a Senate Bill which requires the Department of Health Care Services (DHCS) to assist Medicaid managed care plans in delivering palliative care services. Essentially all Medicaid patients in California are in managed care plans.

Why is this happening?

Because Governor Brown and lawmakers love palliative care… well, I hope so, but The California State Health Care Plan is focused on four different aspects of the health care system that experience particularly high costs—uncoordinated care for people with complex chronic conditions, maternity care, end of life care, and accountable care communities. Within this initiative, a pediatric palliative care pilot program called Partners for Children actually incentivized this law.

The pilot showed significant cost savings for the State’s Medicaid program. Preliminary analysis indicates that the program improves quality of life for the child and family, average days in the hospital fell by one-third, and shifting care from the hospital to in-home/community based care resulted in cost savings of $1,677 per child per month on average.

This is exciting!! What are the next steps?
  • DHCS will consult with stakeholders to establish eligibility criteria for palliative care services.
  • DHCS will establish standards and provide technical assistance for Medicaid managed plans that ensures delivery of palliative care services in a manner that is cost-neutral to the general fund.
What services could be provided?
  • Essentially hospice-like services—similar interdisciplinary services provided to Medicaid hospice patients. Hopefully in consultation with stakeholders, DHCS will determine the amount of services needed.
  • Curative treatment is also available, to the extent that the services are not duplicative.
Who will be eligible?
  • It depends on the eligibility criteria set by DHCS in consultation with stakeholders, but generally individuals whose conditions may result in death, regardless of the estimated length of the individual’s remaining period of life.
Who could provide these palliative services?
  • Licensed hospice programs that are contracted with Medicaid managed care plans
  • Licensed home health agencies that are contracted with Medicaid managed care plans
The devil is in the details

The eligibility criteria could be a stumbling block. The criteria can’t be too hot or too cold; they need to be just right. The world of hospice care knows how difficult admission criteria or guidelines can be, but at least here we won’t have to foretell the future with a specific prognosis. While the pediatric pilot program is producing good data, one could argue that the criteria are too strict in some areas. For example, very ill children sometimes suffer from rare diseases that do not fall into the disease specific criteria. While there is an “other” (non-disease specific) category, providers tell me it has been difficult to refer under this category. Hmm, makes me think about debility unspecified.

Reimbursement for programs could be another stumbling block. Hospices and home health agencies will not be lining up to participate if they have to run these programs at a loss. After the initial three-year pilot period, the reimbursement for programs needed to be increased as some programs were struggling to break even. A monthly administration payment was added. Hopefully they have found the win/win/win spot.

The current reimbursement for the pediatric palliative programs (extrapolated from information in the bill) is about 21% of the hospice routine level of care reimbursement. In short, the same level of care cannot be provided. Maybe the difference in reimbursement is fine because the acuity of care should be less, but it might be difficult for hospices to flex their staffing and visit models for these patients. It may require a ‘new’ team focused on these patients specifically.

The upside could be huge

The California Hospital Association was a supporter for this bill. Many hospitals and health systems will face significant losses if patients are readmitted to the hospital within 30 days after discharge. I don’t know about you, but I know a number of patients who are frequent flyers in spite of a tidy discharge plan. This new service could have a significant impact there.

As demonstrated by the pediatric pilot, this is an opportunity to show how palliative care can improve the value of care (high quality, low cost) in a much larger way. If data collection is done correctly, my hope is that it will bolster the growing evidence that palliative care not only improves quality of life, but also helps people live longer. Finally, if California doesn’t stumble too much, this could be a nice blueprint for other states.

Gary Buckholz, MD, FAAHPM is an associate clinical professor at UC San Diego and part of the Doris A. Howell palliative care consultation service.

Photo credit: Emily Riegel

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