Governor Malloy Press Release

February 8, 2011


MALLOY/WYMAN STREAMLINE ADMINISTRATION OF
HEALTH CARE SERVICES FOR NEARLY 600,000 RESIDENTS
Also Expand Cost-Saving ‘Money Follows the Person’ Initiative

(Hartford) – The administration of Governor Dannel P. Malloy and Lt. Governor Nancy Wyman today announced plans for sweeping, cost-saving changes in the organization of state health care programs for nearly 600,000 residents.

The administration also approved a major expansion of the ‘Money Follows the Person’ (MFP) program for seniors and adults with disabilities leaving nursing home care for community living.

Wyman and Office of Policy and Management Secretary Benjamin Barnes said the goal of the health care changes includes reduced overhead costs, improved service delivery and readiness for national health care reform. The move to a self-insured ‘administrative services organization’ (ASO) format means the state will no longer pay outside firms to assume the financial risk for the cost of a medical claim, but will instead directly pay providers for patients’ care.

The change in health care administration will improve coordination of medical benefits and outcomes under Medicaid - a sprawling, $4 billion program that covers nearly 165,000 seniors and younger adults, and 391,000 children and parents enrolled in HUSKY A. The same advantages will be felt in the smaller HUSKY B program for children and Charter Oak Health Plan for uninsured adults.

“This will bring together the best parts of two parallel systems whose current structure makes it difficult to run an economical program that also delivers quality services,” Wyman said at a Capitol news conference. “The existing Medicaid fee-for-service system provides no support or guidance to patients beyond paying for their care, and the enormous managed care system for children and families carries unnecessary administrative overhead that should be cut on behalf of our taxpayers.”

Secretary Barnes said: “The solution is to merge the systems under an administrative services organization. With this change, Connecticut will be able to bring vital assistance and coordination to the care of senior citizens and adults whose low income qualifies them for Medicaid coverage.”

Barnes said current Medicaid fee-for-service beneficiaries – typically senior citizens living on their own – have nowhere to turn if they need extra help for services such as assistance and referrals. This gap will be remedied in a cost-effective manner with the ASO, he said. At the same time, HUSKY and Charter Oak beneficiaries will continue to receive care coordination and support services.

As of April 1, the state will implement “presumptive eligibility” for HUSKY B that will enable these children to get coverage sooner – and will make Connecticut eligible for up to $4 million of federal bonus dollars.

Wyman noted that tens of millions of dollars have been saved since the state-employee health plan was converted to self-insured about two years ago. Behavioral health and dental health services in public health coverage are also being run successfully under a similar model.

“We expect that the move to an ASO structure will also position the state to take advantage of opportunities presented by the federal Patient Protection and Affordability Care Act,” Wyman said, “because Connecticut will have a more streamlined approach to both health coverage and health care delivery.”

The plan’s timetable calls for the Department of Social Services to issue a request-for-proposals to hire an ASO in March. A contract is expected to be executed by August 2011, with implementation of the new system by January 2012.

The expansion of the ‘Money Follows the Person’ (MFP) program combines cost-effectiveness with improved quality of life for individuals who can live on their own with support services.

In his budget address to the General Assembly next week, Malloy will include funding to support the transition of 2,251 nursing home residents to the community by the end of fiscal 2013. This will build on the 411 individuals already assisted with community placements by state and non-profit agencies through the program to date.

Overall, Malloy has approved the goal of helping a total of 5,200 seniors and adults with disabilities come out of nursing home care over the next five years through this Medicaid pilot program.

The federal Centers for Medicare & Medicaid Services has given strong encouragement to Connecticut in response to its application to expand the initiative to 5,200 placements through 2016. “This is especially significant because Medicaid is a tremendous budget buster in Connecticut, as in other states,” Barnes said.

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