Analysis: CMS looks to partner with states to expand dual-eligible care models

Modern Healthcare is reporting “CMS is inviting state Medicaid agencies to pursue new ways of integrating care for patients eligible for both Medicare and Medicaid — a population that has complex health needs and accounts for a big portion of spending in both public health programs.”

CMS Administrator Seema Verma described in an April 24 letter to state Medicaid directors the following three new ways states can test approaches to integrating care for dual-eligible patients with the goal of improving the quality of their care and reducing costs for federal and state governments. 

1. Participate in an expanded demonstration that tests a capitated payment model. CMS also expressed a willingness to grant long-term extensions to the nine states already participating or allow them to expand the demonstration to new geographies.
2. Test a managed fee-for-service model in states that have not turned to private managed-care plans to administer benefits for dual-eligibles. It is currently testing this model in partnership with Washington and Colorado.
3. Determine new ways to integrate care for all dual-eligibles or specific subsets, like people living in rural areas. 

Takeaway

If we’re going to control federal health expenditures, we need to better coordinate the care for the dual population. Medicare-Medicaid enrollees made up 20% of the Medicare population but account for 34% ($187 billion) of total Medicare expenditures. Duals make up 15% of Medicaid enrollees but account for 33% ($119 billion) of Medicaid expenditures. 

This population also represents a tremendous opportunity to improve quality as 69% of dual-eligible beneficiaries have three or more chronic conditions compared to 54% of Medicare FFS-only beneficiaries. Therefore, it’s not surprising that MSSPs that have higher populations of duals achieve greater savings; they have more opportunities to reduce the total cost of care.  

Per member, duals have increased spending compared to the Medicare-only population across all categories. By aggregating Medicare and Medicaid spend in one pool, it provides states, and the health plans/providers they contract with, the incentive to reduce spending versus just pushing the spending from one program to the other. 

States will look to develop financial models that encourage the standard strategies to coordinate care such as risk stratify and assign dual patients to a panel, have them followed by a care manager, develop care plans, close gaps in care plans, manage transitions across care settings and address underlying mental health issues to reduce potentially preventable hospitalizations and emergency room use. I would also expect states that pursue this approach to focus heavily on social supports and determinants of health. This will allow more dual members to stay in a community setting as opposed to being housed in long-term care facilities.