A proposal from Gov. Scott Walker’s administration would shift multibillion dollar programs serving more than 55,000 elderly and disabled people from long-standing nonprofits to national for-profit health insurance companies. Credit: Journal Sentinel files

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Madison — Gov. Scott Walker's administration wants to shift multibillion-dollar programs serving more than 55,000 elderly and disabled people from long-standing nonprofits to national for-profit health insurance companies.

Administration officials contend the plan, affecting the Family Care and IRIS programs, would save money for taxpayers and improve the health of patients by combining care for their long-term needs with attention to their immediate medical issues.

But skeptics like Tom Frazier, co-chairman of the Wisconsin Long-Term Care Coalition, say the state took 16 years to develop the current Family Care model and the nonprofits within it and shouldn't go too fast in overhauling it. They point out that the national insurers have sizable clout and deep political connections on their side, including a well-regarded executive at one company who is the former chief of staff to both Walker and his health secretary, Kitty Rhoades.

And they argue the state hasn't yet proved the cost savings, better health outcomes or other basic premises of the sweeping changes.

"We need to phase this in slowly to make sure it works," Frazier said. "The bottom line is we should not be disrupting the lives of nearly 60,000 frail elderly and disabled individuals unless we have a reasonable possibility that they're going to be as well off as they are now. The state says they'll be better off, but I think they've failed to prove that."

The Walker administration wants the Legislature's budget committee to allow the program to be implemented in coming months.

Rep. John Nygren (R-Marinette), co-chair of the Legislature's Joint Finance Committee, said he and other Assembly Republicans are satisfied with the administration's arguments for the proposal. He said he sees the plan as a good way to provide better care for the elderly and disabled while containing costs for taxpayers.

"It kind of seems like a no-brainer," he said.

Republicans control the panel but have not yet scheduled a vote on the plan.

That's because Senate Republicans need time so they can get answers to their questions from the administration, said Sen. Alberta Darling (R-River Hills), co-chair of the committee. She said she would like to hold a vote by the end of May.

"We're working hard to get all the information so we can make a decision," she said.

There's no dispute that the changes carry huge financial implications for state and federal taxpayers, who are projected to pay $3.4 billion this year for Family Care and separate long-term care plans that Family Care is scheduled to replace.

Nearly two decades old, Family Care and IRIS provide long-term care outside nursing homes to tens of thousands of needy elderly and disabled people. Family Care works through eight regional nonprofit managed care organizations similar to health maintenance organizations, while IRIS — which stands for Include, Respect, I Self-Direct — provides vulnerable residents with a taxpayer allotment they can use to set up and pay for their own care.

Family Care includes personal care services, helping people with getting dressed, bathing, making meals and shopping. Such care can be costly but is less expensive than nursing homes.

There are eight counties in Wisconsin, including Dane County, that use older long-term care programs because Family Care has not yet been fully implemented in them.

The Walker administration wants to complete the statewide expansion of Family Care and IRIS and administer them through three regions with multiple integrated health agencies that would have contracts to manage the medical and long-term care of those in the program.

Having three large regions would be more favorable to large for-profit insurers such as UnitedHealthcare, Anthem Blue Cross and Blue Shield in Wisconsin and Molina Healthcare of Wisconsin, though it's possible that a few existing managed care organizations, such as iCare of Milwaukee and Care Wisconsin of Madison, would survive the transition.

Lawmakers wrote the state budget last year to require at least five regions as part of any Family Care overhaul, but Walker vetoed that provision, allowing the Walker administration to pursue having three regions.

The administration projects its plan could save state and federal taxpayers at least $300 million over the next six years. That would amount to 1 or 2 percentage points of the total Family Care spending over that period.

That projection assumes the state will save on acute care costs by shifting to HMO-style managed care for those day-to-day medical needs and integrating them more fully with the long-term care — a saving assumption that Department of Health Services spokeswoman Julie Lund called conservative.

The saving represents smaller cost increases than those projected, rather than reductions. They're estimated to be $24 million in the first year of the new program, with that amount climbing to as much as $82million in future years.

In May 2015, the nonpartisan Legislative Fiscal Bureau said that the regional nonprofits in Family Care had already been coordinating some of their long-term care with their patients' other primary care providers.

"Because the Department (of Health Services) has indicated that primary and acute care savings have already been realized...it is unclear what additional savings would be realized or other benefits gained from the integration of these services," the fiscal bureau wrote.

Darling said Senate Republicans want more details on those savings. They also want a fuller explanation of why the administration wants to have three regions instead of five, she said.

The administration is working on addressing those questions, with the hope it will result in the committee taking up the plan soon.

"Family Care serves some of our most vulnerable citizens and it's for this reason we believe the sooner we can transition to improved services, the better off consumers and taxpayers will be," said a statement from Walker spokesman Tom Evenson.

While advocacy groups are urging lawmakers to proceed slowly and consider going a different route, the insurance industry wants the committee to take up the plan by the end of May.

"The sooner the committee acts, the sooner reforms may be implemented, and the sooner both service recipients and Wisconsin taxpayers will reap the benefits of these needed, person-centered reforms," said a statement from R.J. Pirlot, executive director of the Alliance of Health Insurers.

His group includes Anthem, Molina, UnitedHealthcare, Humana Inc. and other insurers.

Walker's former chief of staff, Eric Schutt, went to work for UnitedHealth Group this year as senior vice president of external affairs. He also worked for the firm before he served as the Republican governor's top adviser.

Before his first stint at UnitedHealth, Schutt was the top aide to Rhoades when she was in the Assembly and a co-chair of the Joint Finance Committee. A skeptic of Family Care, Rhoades and the rest of the committee nevertheless approved a big bipartisan expansion of it in 2007 sought by Democratic Gov. Jim Doyle.

UnitedHealth spokesman L.D. Platt said Schutt will have no role with the company's business in Wisconsin while Walker is governor.

Platt and the administration declined to say what role UnitedHealthcare might have played in developing the plan to redesign Family Care and IRIS. Lund, the Department of Health Services spokeswoman, said the administration had taken input from insurers, as well as advocacy groups, providers and states that have overhauled their long-term programs.

She noted the plan to replace Family Care the Legislature adopted in last year's budget was different from what Walker had initially proposed.

"We feel those served by Family Care and IRIS deserve the stability of knowing the long term care services that allow them to live with independence and dignity, will indeed be available to them for the long term," Lund said in a statement.

Guy Boulton of the Journal Sentinel staff contributed to this report from Milwaukee

Family Care

The program includes personal care services, helping people with getting dressed, bathing, making meals and shopping.

Such care can be costly but is less expensive than nursing homes.