- Associated Press - Friday, June 10, 2016

MADISON, Wis. (AP) - Major changes to Wisconsin’s long-term care programs that would have moved away from nonprofit providers to for-profit insurance companies are being shelved following broad and forceful opposition from state lawmakers, consumers and other advocates.

State Department of Health Services Secretary Kitty Rhoades notified the co-chairs of the Legislature’s budget-writing committee on Thursday that the planned changes were being withdrawn.

The surprise announcement from Gov. Scott Walker’s administration came after the DHS in March notified lawmakers of its proposed changes to Family Care and the IRIS program, which stands for Include, Respect I Self-Direct. The programs are designed to keep more than 55,000 elderly and disabled out of nursing homes by offering long-term care in their homes.

Under the shelved proposal, insurance companies would oversee both a patient’s medical care and long-term help with things such as bathing, cleaning and cooking. Walker’s administration said it would save money, but opponents said it would lead to fewer services and more hassles for participants.

The department had already delayed the implementation date for the changes to at least January 2018. But the withdrawal of its proposal could delay any changes even later, if they happen at all.

“We are currently working through next steps and we will be working with members of the Legislature, advocates, and stakeholders to continue to make progress towards this goal and improve the quality, coordination, and cost-effectiveness of Medicaid services,” said DHS spokeswoman Claire Yunker in an email.

Walker spokesman Tom Evenson said the administration would continue to work on improving Medicaid services “in a cost effective way” and that details would be released in the next two-year state budget proposal early next year.

Republican Rep. John Nygren, co-chair of the budget committee, called the decision unfortunate.

“I firmly believe that we are missing an important opportunity to implement reform and bolster sustainability for health care for Wisconsin’s elderly and disabled,” he said in a statement.

Democratic state Sen. Jon Erpenbach, who opposes the plan, said the news was bittersweet for people who have fought the changes for more than a year.

“I wish I could say it is a victory for them but it just feels like Governor Walker and the department ran them through the ringer unnecessarily,” Erpenbach said. “There are some things in government that do not deserve to be measured with private company profit margin; care for the elderly and disabled is one of them.”

The Family Care program currently operates through eight regional nonprofit managed care organizations. IRIS provides participants with money to pay for their own care. The programs are offered in all but eight of the state’s 72 counties.

The Walker administration wants to reorganize the system so that medical care and long-term care would both be overseen by insurance companies who apply to become integrated health agencies, or IHAs. The state would be divided into three zones, and each zone would be served by three IHAs selected through a competitive bidding process.

Walker’s administration said the changes would save $300 million over six years, savings that are needed as the state’s population ages and demand for services increases.

Tom Frazier, who leads the Wisconsin Long-Term Care Coalition which is opposed to the changes, called the withdrawal a surprise but he expects a new proposal to come next year.

“It was pretty clear this was not ready for prime time,” Frazier said. “It almost seemed like the more information the department put out, the more it drew opposition.”

Frazier’s group includes more than 60 groups representing consumers, advocates, managed care organizations and others.

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Follow Scott Bauer on Twitter at http://twitter.com/sbauerAP and find more of his work at http://bigstory.ap.org/content/scott-bauer

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