New Jersey’s Medicaid Managed Care Plans Adapt to New Regulations

Arlington, Virginia—In New Jersey, 75% of the state’s Medicaid beneficiaries are enrolled in 1 of 4 managed care plans. Since the enactment of the Affordable Care Act (ACA) in March 2010, the state and plans have worked together to understand the law’s implications and adapt to the new regulations. Karen Brodsky, director in the Office of Managed Health Care in New Jersey’s Department of Human Services, addressed these issues during a keynote session at the Medicaid Managed Care Summit titled On the Ground: Implementing the Affordable Care Act. Ms. Brodsky said New Jersey’s Medicaid program has a single contract with the 4 managed care plans, down from 17 in 2000.

All Medicaid plans can apply to be included in the contract, but they must agree to operate in all 21 counties and must enroll ≥75% of their members in managed care. Healthfirst New Jersey, the newest plan, had 22,991 members as of December 2010, accounting for 2% of the state’s Medicaid managed care enrollment. Horizon NJ Health, an independent licensee of Blue Cross and Blue Shield, is the largest Medicaid managed care plan with 471,775 members (48% of the state’s enrollment). UnitedHealthcare (355,382 members; 36% of the state’s enrollment) and Amerigroup Community Care New Jersey (131,164 members; 13% of the state’s enrollment) are the other plans able to offer Medicaid managed care in New Jersey. To implement the changes associated with the ACA, Ms. Brodsky said the 4 managed care plans worked with 4 state departments: Department of Human Services, Department of Treasury, Department of Banking and Insurance, and Department of Health and Senior Services. At a planning retreat, the 4 departments participated in groups to review fiscal, regulatory, state plan amendment, and contract changes. The healthcare reform bill included a focus on medical homes, which have become a priority for New Jersey’s Medicaid managed care plans.

In September 2010, Governor Chris Christie signed a bill requiring the state’s Medicaid program to establish a 3-year medical home demonstration project focusing on treating patients instead of treating diseases. Other changes in the legislation that Ms. Brodsky said would affect New Jersey’s Medicaid managed care plans involve the establishment of accountable care organizations (ACOs); concurrent hospice care for children; ensuring physicians certify durable medical equipment; increasing Medicaid rates for payments to primary care physicians; a renewed focus on investments in technology, data exchange, and electronic medical records; and stimulating interest in business models that rely on provider-specific measures based on outcomes such as access to care, chronic care processes, and chronic care and clinical outcomes. By 2014, Medicaid eligibility will be expanded to anyone <65 years of age whose income is ≤133% of the federal poverty level; individuals enrolled in New Jersey’s Division of Youth and Family Services (the state’s child protection and child welfare agency) will have Medicaid coverage until they are 26 years of age compared with the current cut-off of 21 years of age. Ms. Brodsky said that the 4 Medicaid managed care plans have each taken steps to comply with the legislation.

One plan has established a health reform integration team that tracks 184 sections of the ACA and focuses on understanding eligibility requirements, clinical and quality measures, provider and payment reforms, and the health exchange. Another is examining its relations with federally qualified health centers to encourage more customer-centric practices and expand commercial product lines. Ms. Brodsky said the third plan is studying opportunities related to ACOs and medical homes, including reviewing the current and future financial incentives for providers and building a new provider reimbursement model.

The final plan set up teams in important functional areas to look at the healthcare reform bill’s sections and determine their readiness for the health insurance exchange.