New York DISCOs: Critical factors for financial viability

The model for delivering care to the developmentally disabled population is likely to undergo fundamental change, which could have a significant financial impact on the agencies and healthcare providers serving this market. New York, similar to many other states, is looking to improve the quality of care and reduce care delivery costs for this population and is driving a shift away from a fee-for-service (FFS) payment approach that rewards volume to alternative payment approaches that reward improved outcomes. One of the strategies the state is developing is the establishment of licensed managed care organizations that will coordinate care for this population on a capitated basis. These organizations will be called Developmental Disabilities Individual Support and Care Coordination Organizations (DISCOs).

This paper describes the upcoming changes to the Medicaid benefit framework and some of the challenges facing the managed care organizations and providers serving this population. Though this paper focuses on the changes taking place in New York, the financial and design considerations presented here will be relevant elsewhere, as similar changes are occurring in other states.