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Report identifies opportunities for dual eligible cost savings

Posted on January 11, 2013 | No Comments

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According to a working paper recently released by UnitedHealth Center, better coordination of care for individuals dually eligible for Medicare and Medicaid could result in savings of nearly $190 billion by 2022. According to the report, dual eligible spending is estimated to reach $330 billion in 2013. Of this total, about $150 billion will be dedicated to long-term care expenditures. The Centers for Medicare & Medicaid Services (CMS) is currently attempting to address dual eligible spending through a Financial Alignment Demonstration model. In one version of the model, a managed care plan receives blended payment streams of Medicare and Medicaid. The UnitedHealth Center report estimates that the model will cover about 20% of duals and proposes that states can institute more aggressive managed care models to more comprehensively address the health care needs of this population.

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The Congressional Budget Office (CBO) published a report describing the characteristics and costs associated with dual-eligible beneficiaries. A dual-eligible beneficiary, or dual, is someone that is eligible to receive benefits from both Medicare and Medicaid. Dual-Eligible Beneficiaries of Medicare and Medicaid: Characteristics, Health Care Spending, and Evolving Policies uses data from 2009 to examine the different payment systems used in both Medicare and Medicaid to pay for dual benefits, as well as methods by federal and state governments to integrate the payments systems and better coordinate care for this growing population.
Dual-eligible beneficiaries are low-income seniors and individuals with disabilities enrolled in both Medicare and Medicaid. In 2010, there were about 9.9 million dual-eligible beneficiaries. Both programs have requirements to protect the rights of beneficiaries. The Government Accountability Office (GAO) released a report which (1) compared selected consumer protection requirements within Medicare FFS and Medicare Advantage, and Medicaid FFS and managed care, and (2) described related compliance and enforcement actions taken by CMS and selected states against managed care plans. Medicare and Medicaid consumer protection requirements vary across programs, payment systems and states. Within Medicare, enrollment in managed care through the Medicare Advantage (MA) program must always be voluntary, whereas state Medicaid programs can require enrollment in managed care in certain situations. In addition, Medicare and state Medicaid programs require managed care plans to meet certain provider network requirements. Subject to federal parameters, states also establish network requirements for their Medicaid programs. Finally, Medicare and Medicaid have different appeals processes that do not align with each other. The Medicare appeals process has up to five levels of review for decisions to deny, reduce, or terminate services, with certain differences between FFS and MA. In Medicaid, states can structure appeals processes within federal parameters. States must establish a Medicaid appeals process that provides access to a state fair hearing and Medicaid managed care plans must provide beneficiaries with the right to appeal to the plan, though states can determine the sequence of these appeals.
9 percent or 1.2 million of the population eligible to enroll in both Medicare and Medicaid are enrolled in the 322 Medicare dual-eligible special needs plans (D-SNP), a type of Medicare Advantage plan. The Democratic members of the House Ways and Means and Energy and Commerce committees asked the Government Accountability Office (GAO) to examine these dual eligible SNPs. GAO (1) analyzed the characteristics of dual-eligible beneficiaries in D-SNPs and other MA plans, (2) reviewed differences in specialized services between D-SNPs and other MA plans, and (3) reviewed how D-SNPs work with state Medicaid agencies to enhance benefit integration and care coordination. GAO analyzed CMS enrollment, plan benefit package, projected revenue, and beneficiary health status data; reviewed 15 D-SNP models of care and 2012 contracts with states; and interviewed representatives from 15 D-SNPs and Medicaid agency officials in 5 states. The GAO report found...
Jane Hyatt Thorpe and Katherine Jett Hayes recently released an article funded by the Association for Communication Affiliated Plans (ACAP), "A New State Plan Option to Integrate Care and Financing for Persons Dually Eligible for Medicare and Medicaid," which reviews barriers to clinical and financial integration in services for dual eligibles prior to passage of the ACA, identifies models used by states to integrate care through contract and waiver authorities available to CMS prior to passage of the ACA, describes two new demonstrations proposed by CMS through the Medicare-Medicaid Coordination Office and Innovation Center, and introduces a state plan option as a new model for consideration by federal and state policymakers. This new model draws on experience from existing programs and waivers to provide a permanent state plan option for a fully integrated, capitated care model that could be made available to states prior to the completion of the demonstration process begun by the Medicare-Medicaid Coordination Office and Innovation Center.
The current lack of coordination between Medicare and Medicaid creates barriers for dual eligibles to access care. Additionally, although they comprise only 15% of all Medicaid beneficiaries, dual eligibles account for nearly 40% of Medicaid expenditures. America's Health Insurance Plans (AHIP), a national trade association which represents much of the health insurance industry, recently released a proposal to address the serious fiscal and access challenges associated with dual eligibility. AHIP provides a menu of models for Medicare/Medicaid integration, which groups six models into three alternative approaches suited to States with varying readiness for integration. To learn more about dual eligibles, click here.
"Refocusing Responsibility For Dual Eligibles: Why Medicare Should Take The Lead," a new paper authored by researchers at the Urban Institute and funded by the Robert Wood Johnson Foundation, explores why Medicare, as opposed to the States or Medicaid, should take responsibility for dual eligibles. The authors rationalize that acute care, where savings and quality improvement are most readily achievable, best falls under Medicare's umbrella. According to the paper, enhancing State responsibility for overall spending, on the other hand, would increase the risk of cost-shifting to Medicare, which could potentially undermine the quality of care for vulnerable beneficiaries.
The Measure Applications Partnership (MAP), a public-private group of stakeholders working with the National Quality Forum (NQF) submitted the report, "Strategic Approach to Performance Measurement for Dual Eligible Beneficiaries," to the Department of Health and Human Services (HHS) to detail potential health care quality measures for dual eligibles under the Affordable Care Act (ACA). Dual eligible members account for a disproportionate share of Medicare and Medicaid spending. While dual eligibles make up only 15% of Medicaid enrollees, they account for 39% of all Medicaid expenditures. Similarly, dual eligibles account for 16% of Medicare enrollees and 27% of program expenditures. The MAP report proposes a broad outline for measuring health care quality for dual eligibles and for identifying difficulties in obtaining comprehensive treatment data. The five measures of quality that HHS could use to improve care and control spending for dual eligibles include 1) quality of life, 2) care coordination, 3) screening and assessment, 4) mental health and substance abuse, and 5) structural measures.
Experts and stakeholders agree the current health care system is unsustainable. By 2020, health care spending will comprise almost 20% of the gross domestic product. Furthermore, an ever growing body of evidence clearly indicates that the system is not experiencing improvements in quality that are reflective of the cost growth. The Patient Protection and Affordable Care Act (ACA) takes significant strides towards the transformation of the American health care delivery system from a system that rewards volume to a system that rewards quality and value. The programs and initiatives...
The Affordable Care Act (ACA) included a number of provisions designed to improve the delivery of health and long-term care support services for individuals who are eligible for and enrolled in both the Medicare and Medicaid programs, commonly referred to as “dual eligible.” An earlier Health Reform GPS Implementation Brief outlined these changes. Among the provisions identified in the Brief was new demonstration authority provided to the Department of Health and Human Services (HHS) to permit states to waive certain provisions of Medicare law to better coordinate care for dual eligibles, new grant funding available to as many as 15 states to plan and implement integrated programs of care for dual eligibles, and the release of a July 11 State Medicaid Director (SMD) Letter providing preliminary guidance to states on demonstration models designed to improve care coordination for dual eligibles, including both capitated and fee-for-service models. This Brief provides an update on the financial alignment model outlined in the SMD letter, with a focus on subsequent guidance to states and health plans seeking to participate in capitated demonstrations. This demonstration is being followed closely at the federal level, and both...
Today, the U.S. Department of Health and Human Services (HHS) announced that Massachusetts will become the first State to partner with the Centers for Medicare & Medicaid Services (CMS) to test a new model for providing coordinated, patient-centered care to dual eligible individuals enrolled in both Medicare and Medicaid. Massachusetts and CMS will contract with Integrated Care Organizations (ICOs) to oversee the delivery of Medicare, Medicaid and expanded services for Medicare-Medicaid enrollees in Massachusetts. The program is expected to launch on April 1, 2013.