W.Va. Medicaid redesign cost state money
CHARLESTON, W.Va. -- West Virginia's three-year experiment with a redesigned health-care plan for the poor led to an increase in the number of Medicaid recipients seeking care at hospital emergency rooms -- a practice the program was supposed to reduce, according to a report released last week.
Most Medicaid recipients were 8 percent more likely to seek care at hospital emergency rooms in West Virginia under the former Mountain Health Choices program, the study found. The state scrapped the redesigned Medicaid program in September 2010, after federal regulations stipulated that states couldn't force Medicaid recipients into plans with stripped-down benefits.
"Ultimately, this program wound up costing us money, not saving us money," said House Health Committee Chairman Don Perdue, D-Wayne. "What's frustrating is almost everyone at the time said this was a bad idea, that it wouldn't work, but the administration at the time just refused to change course. They wouldn't even consider changing course."
Under the defunct program, Medicaid recipients could choose to enroll in an "enhanced" plan that made them eligible for more health services, such as weight loss programs. The expanded plan required Medicaid enrollees to sign "member-responsibility agreements" and pledge to use the emergency room only for emergencies.
The other option, known as the "basic" plan, came with no strings, but limited prescriptions and mental health services. Medicaid recipients were automatically stuck with the basic plan if they didn't sign up for the enhanced benefits package.
In West Virginia, only 14 percent of Medicaid enrollees chose the enhanced plan between 2007 and 2010.
"Overall, the program -- which was intended to reduce costs, increase personal responsibility and decrease ER use -- had the unintended consequence in the short term of increased ER visits because of low enrollment in the enhanced plan," said the report's author, Tami Gurley-Calvez, of the Mercatus Center at George Mason University in Virginia.
The report said Medicaid recipients who signed up for the enhanced plan did reduce their number of emergency room visits -- by about 5 percent. But the overall number of emergency room visits increased because the overwhelming majority of West Virginia Medicaid recipients were stuck with bare-bones health coverage.
"Policies that limited treatment options led to the unintended consequences of increased ER visits," Gurley-Calvez wrote in the report.
The enhanced plan encouraged Medicaid recipients to develop stronger ties with family doctors. Enrollees also had to agree to follow health-improvement plans. In return, they received more prescription benefits, mental health services and substance abuse treatment.
Perdue said the state did a poor job getting the word out about the enhanced plan.
"The huge problem early on was nobody knew what it was," he said.
West Virginia started its redesigned Medicaid program in March 2007. The program was designed, in part, to reduce the number of Medicaid recipients who go to hospital emergency rooms for non-emergencies. The change was expected to lead to lower health-care costs.
"Government, even when it's bad, should be responsible for its errors," Perdue said. "In this case, it wasn't."
Gurley-Calvez and state Medicaid officials could not immediately be reached for comment.
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