Managed long-term care plans in New York state: Critical factors for financial viability

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By Catherine M. Murphy-Barron, Kathryn V. Fitch | 30 April 2012

In July 2012, New York state is scheduled to roll out a mandate that individuals receiving community-based long-term care services funded by Medicaid must enroll in managed long-term care plans. This mandate will be implemented gradually, starting with the five boroughs of New York City.

Provider organizations need to be aware that under this mandate managed long-term care plans are funded using a capitation mechanism in which they receive a lump sum per member from which they must pay most long-term care and other ancillary expenses. The risk shifts from the Medicaid program to the plan. Running a successful managed long-term care plan therefore requires significantly more investment in risk management, financial management, and strategic planning than do fee-for-service arrangements.

Health plans and home healthcare agencies that were successful under fee-for-service reimbursement need to understand and plan for these changes, which will ultimately result in reduced utilization per long-term care patient.