However, after a multimillion-dollar operating loss, Commonwealth Care's cash reserves fell dramatically, causing MassHealth, the state's Medicaid program, in November, to block the insurer from buying new members. Advocates of disabled people recently wrote in a letter to state regulators that the company is about to be bought, but said these efforts have not been successful so far.
An executive at Commonwealth Care declined to comment.
The organization's financial struggles occur after a period of rapid growth. There, he has taken up tens of thousands of new patients in three other states, former board members said. Some people suggest that they propose state and federal payments to cover client care.
Bill Henning, executive director of the Boston Independent Living Center, said, Bill Henning, who provides advocacy and services to people with disabilities. “The immediate concern that we all need to have is… Is it just keeping in care of people?”
The scope of the cash crisis was detailed in a MassHealth letter sent to Commonwealth Care in October, warning of an imminent registration freeze from the following month, and concerns were laid out.
Among them, Commonwealth Care is expected to be repaid in December 2024 and borrowed $120 million from the credit line. However, by October, the organization had not secured additional cash and could force the organization to “clear a significant amount of assets” to repay its obligations.
The insurance company also informed state regulators that it expects to have “less than zero cash on hand” by the first quarter of 2025. Additionally, organizations had to have more than $100 million for two MassHealth programs. By August, the organization's reserves were only $66.9 million. MassHealth was worried that the organization would not be able to pay the vendor or provider.
“The CCA as an organization is in financial trouble,” the letter was sent to CEO Chris Palmeli.
In a recent statement, a spokesman for the state's Medicaid program, MassHealth, said the state is closely monitoring the organization's finances, saying that a temporary freeze on registration is to “protect members” while insurers address the issue of solvency.
The confusion is shocking obstacle advocates. In a letter to state officials, supporters called on the state to appoint recipients to oversee the organization.
“I've heard that CCA's acquisition is not imminent, that its financial position may be unhealthy and that its members are increasing risk,” said a letter submitted by Health Law Advocates, a public interest law firm on behalf of the disability advocacy group The Disability Policy Consortium.
Care for insurance company members is complex, with a network of clinicians coordinated by insurance companies and built up over time in ways that may not be able to be transferred to other insurance plans. Similar options are rare in some states. It is unclear whether other insurance companies even have the ability to take on so many additional members.
If a patient moves to another insurance company, they may face a denial of critical services or lack of coverage.
Gov. Maura Healy's office said it has reviewed letters from supporters and is monitoring the situation. Attorney General Andrea Campbell said he is evaluating the best ways to support members in the event they lose compensation.
“Our office understands the potentially serious impacts that disruption in care coordination may have on the communities provided by the CCA,” a Campbell spokesperson said.
For most members of Massachusetts, Commonwealth Care serves as an insurance company and offers two products. One is for people with disabilities called One Care, and one is for the low-income elderly, called Senior Care Options. Under both plans, Medicaid and Medicare will provide federal care with a set amount of monthly amounts per member, allowing organizations to increase funding flexibility.
According to Henning, the “magic magic” is combining community-based aid, such as personal care attendant services, diet and transportation with heterogeneous physical and behavioral health services, allowing people with disabilities and seniors to live independently.
Dennis Heffey, a Boston patient with a wheelchair, said the nurse practitioner at Commonwealth Care coordinates his care, including physical therapy, occupational therapy, allergy specialists, respiratory specialists and dental treatments. Before the CCA, Heaphy used emergency rooms primarily for medical needs.
“I owe my life to the CCA to the model of care they provided me,” said Heaphy, a policy analyst at the Disability Policy Consortium. “That's why it's important for me to be preserved. When it works, I know how well it works.”
Other Massachusetts insurance companies may have similar offerings, but Commonwealth Care is often more generous and is one of the biggest, offering about 20% of senior care options and about 70% of state enrolled people in one care.
A pioneer, Commonwealth Care, is even further than other insurance companies that serve more than 1,000 patients a year.
Bobmaster, one of the founders of the nonprofit, said he first realized as a doctor in the 1970s and then as the state's Medicaid director that elders with disabilities were not properly served by typical short office visits. To keep these patients out of the emergency department, a separate payment model is required that provides a fixed amount for each patient, and is tailored to the severity of the illness. With such funds you can make a home visit or simply buy an air conditioner to prevent heat strokes.
The success of the model was evident in its growth. The Medicaid grant in the 90s finally blossomed into an example in which care for hundreds of elderly people was used as the basis for expanding similar programs in other states under the Affordable Care Act. By 2015, Commonwealth Care had around 18,000 members.
That same year, Master retired and the board chose Palmeli, a health planning executive in New York, as his new leader.
Palmeli dreamed of expanding the model nationwide, but some board members were skeptical, said former board member Charlie Kerr, who serves as the legislative liaison for the Disability Policy Consortium.
“The concern about expansion was that we were in unknown territory,” Kerr said. “We didn't know how the CCA model would be accepted in other states.”
Anyway, the expansion of Commonwealth Care was driven by the acquisition of companies in Michigan and California and the launch of insurance products in Rhode Island. By 2022, the organization said it was overseeing care for 100,000 people in four states.
Around that time, I also created Commonwealth Care A set of investments others Medical Company. A CCA venture capital subsidiary called Winter Street Ventures has joined the company some MultiMillion Dollars The same goes for the fundraising round.
But as Commonwealth Care grew, supporters and members said it has become increasingly denying health services. The organization has begun to experience high staff turnover, they said.
Due to the change, the provider once told him the level of service he had allowed him to recover from surgery at home, Heaphy said.
“They abandoned the original care model developed in collaboration with the disability community,” said Harry Weissman, executive director of the Disability Policy Consortium.
There were also signs of trouble. According to MassHealth Records, the company's massive expansion was accompanied by operating losses, including $14.3 million in 2022 and $105.8 million in 2023.
In October, Commonwealth Care announced it would suspend all Medicare Advantage plans in California, Michigan and Rhode Island, and one such plans in Massachusetts by the end of the year. Outside of Massachusetts, it is unclear how many people Commonwealth Care is still serving.
That same month, MassHealth wrote to Commonwealth Care, excluding new subscribers, from November.
“My biggest question right now is how the board can see this progressive decline in their finances and not take action,” said Carr, who left the board but is in touch with leadership.
Board Chairman David Klein did not respond to requests for comment.
Former board member Joe Padda said the expansion was aimed at diversifying revenue commonwealth care that it relies on from Massachusetts, but the organization made mistakes, including not doing sufficient market research into its approach to potential customers.
A bigger factor is that Medicaid refunds do not meet the cost of CCAs to provide robust services.
“We did the right thing at the wrong time,” he said. “Massachusetts said, 'We're not giving you any money.' The federal government said the same thing, and we failed to run in some extended states. It was a perfect storm. ”
Padoda eventually resigned in December over differences between the board chair and the CEO, but he refused details in detail.
MassHealth said it was fighting for its inadequate rates, and that per-member payments for both federal care programs increased between 2022 and 2024. Medicare rebates may sometimes be insufficient, but MassHealth's overcompensation, the department said.
Jessica Bartlett can be contacted at jessica.bartlett@globe.com. Follow her @byjessbartlett.
