Madison-based Care Wisconsin, one of six managed care organizations that oversee long-term care for frail elderly people and adults with disabilities in the state’s Family Care program, lost at least $10.6 million last year and saw the departure of its top two executives last month.
The interim CEO said the financial losses stem from the cost of new enrollees in Dane County and northeast Wisconsin, among the last parts of the state to join Family Care as required under a 2015 law.
Care Wisconsin issued rate cuts and new requirements this year for some providers, leading about six providers of services for adults with developmental disabilities in Dane County to terminate their contracts with Care Wisconsin, said Melissa Mulliken, advocacy coordinator for the Developmental Disabilities Coalition of Dane County. Before the county switched to Family Care last year, county officials ran the programs.
“A provider must be able to offer each and every individual they serve support that is community based, that is high quality and that protects that person’s health and safety,” Mulliken said in a statement.
“Changes and reductions that cause providers to terminate their contacts with (managed care organizations) have significant impacts on people’s lives and on the sustainability and stability of the managed care system,” she said.
Dr. Kevin Park, interim CEO at Care Wisconsin, said the rate cuts and other changes were needed to realize cost savings under managed care, as required by the state, and bring Dane County and other areas served by Care Wisconsin into national norms for quality and efficiency.
“They were needed to basically help Care Wisconsin continue to serve its mission,” Park said.
Rate cuts ranged from 5% to 60%, Care Wisconsin spokeswoman Karen Hitchcock said. They were starting points for negotiations, and most providers “worked together with us to come to mutually agreeable terms,” Hitchcock said.
Park said some disabled clients need only two aides instead of three. Another new requirement is that local service providers, not Care Wisconsin, cover transportation.
“There should be some expected cost savings,” said Park, previously chief medical officer for Care Wisconsin. “We have had difficulty managing our costs ... primarily in our expansion markets, which are here in Dane County and in the northeast.”
Janette Townsend, chief financial officer, resigned from Care Wisconsin last month, Park said. April Golenor, CEO, also left last month under circumstances Park and Hitchcock would not specify.
Care Wisconsin lost $9.1 million through Family Care, and $1.5 million through a related program called Partnership, from January to September last year, according to a state financial report.
Since September, the financial picture “has basically remained the same,” Park said last week.
In 2017, before Dane County switched to the Family Care programs but after the northeast region did, Care Wisconsin gained $17.8 million.
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Family Care, which started in 2000, is a Medicaid program designed to allow people who need long-term care to remain at home instead of moving to a nursing home.
IRIS — which stands for Include, Respect, I Self Direct — is an alternative that lets people design their plan for services such as home care, transportation and job assistance.
Most counties had switched to Family Care before the 2015 law required counties that hadn’t, including Dane County, to do so.
Dane County officials, who resisted the move, said they provided richer services that helped many people work and live independently, by contributing additional county funds that brought in a federal match.
The state argued that similar services would be provided under Family Care and IRIS, and nearly 500 people on a waiting list in Dane County would be able to get services.
About 2,000 county residents switched from the county-run system last year, as required by the state, with about half of them choosing Family Care and the other half IRIS.
More than 80% of those who opted for Family Care chose Care Wisconsin to manage their care. The others selected Wauwatosa-based My Choice, the only other alternative offered in Dane County.
Of the 857 Family Care members in Dane County who were with Care Wisconsin as of March 1, before any contracts were terminated, 536 — or nearly two-thirds — were people with intellectual or developmental disabilities. Some say that population can be more expensive to manage than frail elders or adults with physical disabilities, though there is overlap among the groups.
Clients of providers that terminated contracts with Care Wisconsin can stay with the providers and switch to My Choice, or switch providers and stay with Care Wisconsin.
“The whole experience is disruptive, stressful and time consuming for individuals and families,” Mulliken said.
Park said Care Wisconsin is working with the state to improve its financial position. Statewide, half of its clients are developmentally disabled — the highest percentage of the six managed care organizations.
“We have a strong commitment to people with intellectual and developmental disabilities, and we continue to serve that segment of the population very strongly,” he said.