Changes needed to pilot plans that are testing better ways to coordinate care among high-cost dual-eligible beneficiaries include ensuring provider rates reflect unanticipated costs.


Sept. 20—A range of changes—including better combining of Medicare and Medicaid financing streams—is needed to improve care for some of the costliest patients, known as dual-eligibles, according to a Bipartisan Policy Center (BPC) report.

The high-profile Washington, D.C., think tank recently recommended a series of policy changes to improve the care of high-cost patients who are dually eligible for Medicare and Medicaid. 

Such high-need beneficiaries comprised only 37 percent of the Medicare population but incurred 74 percent of total Medicare costs and accounted for 90 percent of Medicare hospital readmissions in 2010.

New Data

The recommendations accompanied new findings about dual-eligible patients by BPC, including the presence of a costly subpopulation of 10 percent of such patients. That smaller group accounted for 38.5 percent of total combined Medicare and Medicaid spending on dual-eligible patients in 2011.

Other report findings include:

  • The average dual-eligible beneficiary has six chronic conditions, while all other Medicare beneficiaries have an average of four.
  • Average annual Medicare spending for full-benefit dual-eligible beneficiaries is more than twice as much as for all other Medicare beneficiaries.
  • Dual-eligible beneficiaries have higher rates of hospitalizations and re-hospitalizations for medical conditions such as hypertension, congestive heart failure, and chronic obstructive pulmonary disease—conditions for which comprehensive care can often prevent the need for a hospital inpatient admission for treatment.

Tom Daschle, co-founder of BPC and a former Democratic Majority Leader in the Senate, said a “key barrier” to improving care for this population is misaligned financial incentives in Medicare and Medicaid. And he warned that without alignment, care coordination models for this costly population are not sustainable.

Among the recommendations was that the Centers for Medicare & Medicaid Services (CMS) consolidate regulatory authority for reimbursement structures serving dual-eligible beneficiaries into a single office.

“Consolidating this authority will help ensure that decisions affecting these programs are made through the lens of an integrated program that takes into account the impact on beneficiaries, as well as state implementation,” the report stated.

Ongoing Initiative

BPC also recommended changes to the Financial Alignment Initiative, which was authorized by the Affordable Care Act to test better coordination of the often-splintered care such beneficiaries receive. To date, 354,904 dual-eligible beneficiaries have enrolled in Medicare-Medicaid pilot plans in California, Colorado, Illinois, Massachusetts, Michigan, Minnesota, New York, Ohio, South Carolina, Texas, Virginia, and Washington.

The lack of comparable data from the various state programs has made it difficult to assess whether the demonstration is achieving its goal of providing coordinated care to the dual-eligibles, according to a Government Accountability Office report earlier this year. However, a January report on one pilot participant, the Washington Health Homes demonstration, found that from July 2013 to December 2014 it saved Medicare $21.6 million, or 6 percent, compared to a control group.

“We are beginning to see the evidence that improvement is possible,” Daschle said.

However, needed changes to the Financial Alignment demonstrations, according to the BPC report, include revising contracts to ensure that rates reflect unanticipated costs of infrastructure investment or costs of treating special-needs populations, such as those with previously untreated mental illness. Although CMS has made that adjustment in some states’ financial alignment plans, many providers continue to bear such costs.

Jason Dinger, PhD, CEO of MissionPoint Health Partners, an accountable care organization that serves dual-eligible patients, said better coordination between Medicare and Medicaid programs is “hugely important” because, among other reasons, providers are not trained to figure out which of the programs covers which services.

However, Dinger praised the capacity of the program to address patients’ needs that are not traditionally covered by health plans, such as transportation, care coordination, and dental services.

“We underestimated the impact of these factors on health outcomes,” Dinger said during a BPC presentation.

Carrie Graham, PhD, assistant director of research at the University of California Berkeley, said California’s Financial Alignment Initiative pilot had a slow start, with half of the dual-eligibles in the state opting out of the program. The reason for their reticence remains unclear, but Graham said provider resistance to losing fee-for-service patients could have been a factor.

Since the program has launched, patient access to care has mostly remained the same, although 20 percent have reported improved access. Additionally, about 30 percent have reported reduced use of emergency departments for care.

Other benefits of the program have included an increasing willingness of health plans to communicate with each other and with community service providers “for the first time,” Graham said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, September 20, 2016