States drive integrated models to improve care for dual eligibles

March 1, 2011

Care for the roughly 9 million dual eligibles in this country tends to be fragmented with Medicare and Medicaid engaging in cost shifting, resulting in a lack of accountability.

NATIONAL REPORTS-Care for the roughly 9 million dual eligibles in this country tends to be fragmented with Medicare and Medicaid engaging in cost shifting, resulting in a lack of accountability.

Providers are left with little incentive to choose community-based care or other more cost-efficient alternatives over costly admissions to hospitals and nursing homes, while at the same time, overlapping benefits lead states to encourage Medicare maximization.

As the size of the dual population steadily increases, total annual spending on beneficiaries is projected to be more than $775 billion by 2024, according to figures from the Association for Community Affiliated Plans (ACAP).

As states contend with slimmer budgets and rising healthcare costs, duals are being targeted for enrollment in managed care as a cost-savings measure. The National Commission on Fiscal Responsibility and Reform similarly estimates such a move will create $44 billion in savings by 2020.

Renee Markus Hodin, director of the Integrated Care Advocacy Project for Community Catalyst, says there are a variety of avenues states could pursue to have a positive impact on healthcare delivery for duals.

The new Center for Medicare and Medicaid Innovation, operating under the Centers for Medicare & Medicaid Services (CMS), for example, will award grants to 16 states this spring to design integrated care models. The creation of the Office of Federal Coordinated Health Care at CMS, the so-called "duals office" introduced through the Patient Protection and Affordable Care Act, launched a shared savings model to reduce cost shifting and to improve quality and long-term care services.

"[CMS Administrator] Don Berwick's mantra of 'better care, better health and lower costs through improvement' makes a ton of sense for the dually eligible," Hodin says. "This is an extremely vulnerable population. They have a greater incidence of almost every chronic condition.

"We also know they are incredibly expensive to care for," she continues. "Our priority is that when new programs are launched, the first priority is improvement-the better care, better health-then you can achieve the lower cost. Not the other way around."

Karen Davenport, director of Health Policy for the Center for American Progress, co-authored a report, "The Role for States in Improving Care for Dual Eligibles: Learning Lessons and Moving Forward," with Hodin and says integrating financing and care makes the delivery system more efficient for dual eligibles.

She says states need to create a path to help duals maximize the benefits they do receive; including creating a well designed healthcare delivery system; ensuring strong beneficiary protections; engaging dual eligibles and their families in benefit design; ensuring that combined Medicare/Medicaid funds enhance healthcare delivery; and establishing a culture of ongoing quality improvement.

TWO APPROACHES

Two approaches to integrating care for duals include the provider-based Program of All Inclusive Care for the Elderly (PACE) and the managed care programs that contract with states as Medicare Advantage Special Needs Plans (SNPs). Both efforts combine funding streams to blur the lines between the two programs and establish provider networks and coordinate care or case management services.

While these integrated approaches to managing duals have potential, they face many challenges, including a lack of experience managing long-term care; beneficiaries and providers resistant to buy into the programs because of potential changes in provider relationships; high initial program investments; financial viability; separate administrative rules for Medicare and Medicaid; and voluntary enrollment.

ACAP Vice President of Medicare Mary Kennedy says just over 15% of dual eligibles are enrolled in one of the 335 Centers for Medicare & Medicaid Services (CMS)-approved SNPs.

But several states are successfully implementing their own integrated care programs.