Fallon Health is departing from Massachusetts' Medicare-Medicaid managed care program, another sign that the sought-after benefits and savings will be hard to achieve.
Fallon Total Care, the dual eligible plan of nonprofit Fallon Health, is leaving Massachusetts One Care, the state's capitated payment financial alignment demonstration.
By September 30th, the 5,475 beneficiaries covered by Fallon Total Care in Hampden, Hampshire, and Worcester counties will have to enroll in one of the other two plans, Commonwealth Care Alliance and Network Health, a part of Tufts Health Plan.
"After careful consideration and a thoughtful, comprehensive assessment of our experience, we have decided reluctantly to end our participation in the Commonwealth's One Care demonstration program," the Worcester-based Fallon Health said in a statement. "We explored alternatives with MassHealth and the Centers for Medicare & Medicaid Services, but ultimately determined that our continued participation was not economically sustainable," the organization continued. "This decision has no impact on any other products or programs that we offer."
In the first quarter of 2015, Fallon Health lost $4.2 million on revenue of $317 million, with an operating loss of $6.6 million, although it's not clear how much of that stemmed from One Care. The company has 226,500 members and is expanding into western New York, but the One Care demonstration has proved too difficult, even for a small patient population.
With 12 states participating in varying types of dual eligible demonstrations, CMS and the states have been expecting the new integrated management approaches to yield between 1 percent and 5 percent in savings over the course of three years. In 2009, the Medicare and Medicaid programs spent an estimated $103 billion on disabled dual-eligible beneficiaries, a large sum that helped spur authorization of the demonstrations in the Affordable Care Act.
Policymakers saw a big opportunity to streamline the programs with integrated benefits--like home care, social supports and transportation--that could prevent high-cost acute care and complications for vulnerable patients with disabilities, comorbidities and behavioral health conditions.
In Massachusetts, regulators estimated that more than 90,000 beneficiaries could be eligible and that savings of 1 percent could be met in 2014, followed by savings of 1.5 percent in 2015 and 4 percent in 2016.
How 2014 ended up isn't clear, but the Commonwealth recently revised its savings targets for 0.5 percent this year and 2 percent in 2016. Fewer than 20 percent of Massachusetts' eligible beneficiaries have opted into the demonstration. .
Six companies were originally supposed to participate, but three dropped out before the program started. Today, the Commonwealth Care Alliance covers the bulk of Massachusetts dual eligible beneficiaries, with more than 10,000 patients, compared to the 1,800 covered by Network Health and the 5,475 transitioning away from Fallon.
In other states, the dual eligible demonstrations have also faced setbacks. In California, where some 456,000 beneficiaries could be eligible and regulators had hoped for savings of 5 percent in 2016, more than half of beneficiaries have opted out and 15 percent have disenrolled from plans.
Nationally, only about 20 percent of the 1.7 million eligible beneficiaries across the demonstration states have enrolled or opted into the programs so far, according to Community Catalyst.
The varied patient populations eligible for Medicare and Medicaid are among the sickest, disabled and at-risk members of society, as Commonwealth Care Alliance co-founder and CEO Robert Master, MD, told Healthcare Payer News in 2013.
To prevent the high-cost hospital interventions that have led to such high costs historically, he said, dual eligibles need to have integrated primary and speciality care managed by teams in multiple settings, including the home.
"Multi-interdisciplinary teams, a lot of home visiting and community visiting for assessments and response to problems, developing resources allocations and personalized care plans (can) really make the difference," Master said.
"For example, we will invest on average, depending on the population, somewhere between $300 per person per month and up to $800 or even higher, in terms of robust interdisciplinary teams. What we see in terms of the added investment in the standard patient-centered medical home is something in the order or $6 or $8 or $10 per person per month."