Michigan Considers Moving Long-Term Medicaid to Managed Care

Long-term care (LTC) groups in Michigan expressed alarm at the possibility of the state moving its $2.8 billion Medicaid nursing home and LTC services programs to managed care, according to a report in Crain’s Detroit Business.

Under Section 1857 of the 2017-2018 state budget, the Michigan Department of Health and Human Services (MDHHS) must “explore the implementation of a managed care long-term support service” by July 1 of this year. Nursing home officials and senior advocates expressed concern that moving Medicaid funding for LTC services to managed health plans would adversely affect patients and care quality.

LTC settings that are under consideration for managed-care contracts include nursing homes, assisted living centers, rehabilitation facilities and various home and community-based programs, state officials told Crain’s.


“There are adequate rates to providers to provide good care for the system,” Melissa Samuel, CEO of the Health Care Association of Michigan, told Crain’s. “If the goal is to provide cost-effective, high-quality care, can we guarantee that moving to managed care is better? Can we reduce costs and improve outcomes?”

Linda Burghardt, director of the non-profit Area Agency on Aging Association of Michigan, echoed these concerns, telling Crain’s that Medicaid HMOs are unprepared to manage LTC services, particularly home services.

“If the HMOs come in and take over, everything will be done from a cost perspective,” she told the publication.


Medicaid contracts with about 450 nursing homes, assisted living facilities, rehabilitation centers and other long-term centers in the state, according to Crain’s. Michigan’s overall spending on health services last year totaled $18.4 billion, with $2.8 billion for LTC. That includes $1.7 billion for nursing homes.

Nursing home care costs Medicaid more than $250 per day, a survey by MetLife Mature Market Institute indicated.

Michigan has been considering managed LTC as far back as 2013, when there were debates related to approving the Healthy Michigan Medicaid expansion, Richard Miles, MDHHS’ director with the bureau of Medicaid policy and health systems innovation, told Crain’s. The department should move populations not on managed care into managed care, he indicated, and LTC is the only one left.

At least 22 states are looking into how to integrate LTC services into Medicaid programs to increase services and quality and reduce costs, according to a report completed for the state by the Center for Healthcare Research and Transformation in Ann Arbor, Mich.

Samuel, however, noted that states that have moved to long-term managed care have had problems, with Medicaid rates underfunded regardless.

“They look to managed care and put a program in place to control costs, looking to erode provider rates,” she told Crain’s. “Is that the answer to maintain quality care?”

Written by Maggie Flynn

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