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Who Stands To Benefit From The Duals Demonstration?



July 23rd, 2012

One of the most vexing problems that has plagued the Medicaid and Medicare programs for decades is the siloed and inefficient system that Medicare-Medicaid eligible individuals must navigate to receive health care services and supports. Or perhaps it’s better to put it this way: we lack a rational, coordinated delivery system to improve health outcomes and quality of life for such individuals. In turn, taxpayer dollars are perpetuating these misaligned financial incentives that result in poor quality care.

Finally, after decades of inaction, the federal government is facilitating a partnership with states through which states and the Centers for Medicare and Medicaid Services (CMS) will jointly design, administer, and evaluate how an integrated model of care could work.  A good faith partnership between Medicare and Medicaid is essential in order for these demonstration projects to successfully leverage federal and state dollars to integrate care and improve health outcomes and quality of life for members across the lifespan of the individuals. As the existing structure demonstrates, these goals cannot be achieved unless both programs are engaged in integrating the care and financing models. The models states are developing seek to do just this by leveraging the strengths of their local programs and innovating, along with Medicare.

The Numbers Tell A Grim Story

The existing system is indefensible and unsustainable over the long term. In June 2012, the Federal Coordinated Health Care Office’s (Medicare-Medicaid Coordination Office) released its analysis of 2007 data that highlights some of the consequences of the fragmented approach that is currently in place:
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  • Over 75 percent of full benefit Medicare-Medicaid enrollees had a chronic condition. Nearly 20 percent of Medicare-Medicaid enrollees had 5 or more chronic conditions.
  • Medicare-Medicaid enrollees were more likely than Medicare-only enrollees to use every type of Medicare health service.
  • Medicare monthly expenditures per person averaged $1474 for Medicare-Medicaid enrollees versus $667 for Medicare-only enrollees. In addition, Medicare-Medicaid enrollees had average monthly Medicaid expenditures of $1274 per person, for total combined expenditures of $2748, more than four times as much as expenditures for Medicare-only enrollees.
  • The largest portion of fee-for-service Medicare expenditures for Full Benefit Medicare-Medicaid enrollees was for inpatient hospital services, at 29%. The largest portion of fee-for-service Medicaid expenditures for Medicare-Medicaid enrollees was for institutional long term services, at 53%. However, these figures varied across states.
  • Combined Medicare and Medicaid expenditures for Medicare-Medicaid enrollees totaled $229 billion.

These are national level statistics, but the Medicare-Medicaid Coordination Office also has amassed similarly disconcerting information on a state-by-state basis. Many states have historical and more recent data that further reinforces that the status quo approach is failing individuals dually eligible for Medicare and Medicaid.

A Solution In Sight… Maybe

Yet, instead of welcoming the Medicare-Medicaid demonstration initiatives, a growing chorus of voices at the national level is fixating on preserving this inefficient, unsustainable system. The lack of attention to the substance and promise for improvement contained within the states’ evolving integration proposals is disheartening. Compounding this dynamic are efforts by many industry, provider, and consumer advocacy organizations that wish to maintain the status quo.

The demonstration program was never intended to cause – nor did states expect – Medicare to abdicate its authority to Medicaid. It has always been about establishing a partnership between the programs to test and bring to scale more rational, cost-effective approaches to care. We at the National Association of Medicaid Directors are concerned that the demands to preserve existing structures and restrict the parameters of the demonstrations programs will ultimately undermine the ability of states and CMS to truly integrate care systems and align financial models.

How Medicare-Medicaid Eligible Individuals Fare Today

Many policymakers and stakeholders at the national level now seem to have placed the documented experiences of Medicare and Medicaid eligible individuals on the back burner. There is also scant discussion of the fact that each new proposal for integration is unique in its scope and proposed target population. For example, some states are focused on certain subpopulations while other states are proposing to make the demonstration program available to all eligible individuals, though states cannot make enrollment mandatory.

We also note that states’ core motive is to work with stakeholders and with CMS to change the system in ways that will benefit, not harm, residents. Unlike Medicare, state Medicaid programs are very close to the beneficiaries they serve; administrative processes, customer service, and political representation are local, effective, and often personal. State Medicaid agencies have crafted their integration proposals to ensure not only continuity of services, but providers as well, and higher quality care that leads to desirable outcomes.  This is clearly demonstrated by the extensive list of state and community-based organizations that have submitted letters of support for states’ proposals, including local chapters of the AARP, Alzheimers groups, community mental/behavioral health entities, and Easter Seals UCP, as well as various state policymakers and agencies.

Medicaid agencies have shared numerous examples with us about how their beneficiaries are under-served now, and how much they stand to gain if enrolled in their state’s integrated care demonstration program. Below we represent these concrete examples in three vignettes of actual Medicare-Medicaid eligible individuals illustrating the dramatic improvements states are pursuing in their integration initiatives.

Charles. Charles is 50. He and his wife rent an apartment and share a car. They both work and take turns driving each other to work. Fifteen years ago he had a very difficult two years dealing with severe depression and was unable to work for several years. Charles no longer receives cash benefits, but he is dually eligible for Medicaid and Medicare. He has tried to get a primary care physician but has been told that practices are not taking new patients.  For the last five years Charles has worked part time as a data entry clerk. He is good at his job and enjoys it but worries that his continuing problems with depression, the side effects of his medication, and repeated bouts of pneumonia may put his job in jeopardy. He recently ended up in the emergency room and was subsequently hospitalized with severe pneumonia. He receives counseling and depression medication management from the local mental health agency.

An alternative for Charles. Now consider what’s possible for Charles under the state-CMS demonstration. Charles could receive counseling and medication management from the local mental health agency, which also is his integrated care provider. Charles’s care coordinator could help him find a new primary care provider and ensure that all his care and treatment planning is integrated. And Charles could have greater comfort knowing that his medical issues will not threaten his job.

Kathy. Kathy lived in a rural part of the country for more than 75 years. She was an independent woman late into her 70s, when she began to require assistance due to her increasing memory loss.  She received intermittent in-home care through family support until it became clear that this help was insufficient to meet her daily needs.  In late 2007 Kathy moved to an independent housing unit at an assisted living facility near her daughter.  She had few health concerns other than being borderline diabetic.

Then, in 2008, Kathy fell, was sent to the emergency room, and was hospitalized following surgery for her fractured hip. At the time of this incident, her primary care physician was away and not available for help. Post-surgery, Kathy experienced delirium and significant agitation, and had a heart attack. Kathy’s family was left alone to navigate between recommendations for medical interventions and the palliative care path they had previously discussed and agreed upon with her physician. In October 2008, Kathy was briefly transferred to the only nursing facility her family could find and then returned to her assisted living facility, and eventually was admitted to the facility’s memory care unit. In May, 2009 Kathy fell again and was hospitalized for a second hip fracture.

Following surgery, Kathy’ health deteriorated. As she continued to lose ground her family and physician established a plan for Kathy to return to her assisted living facility with hospice.  Kathy experienced a series of falls and cycled between the emergency room, hospital and her assisted living facility. Kathy’ family members were on their own as they made critical decisions during crises and tried to communicate her preferences to new care providers. Still, the hospital conducted multiple expensive diagnostic CT scans on Kathy after her palliative care preference had been established. Funding for aide support was not available. At various times during Kathy’s hospitalizations the family members shared the responsibility of watching over Kathy.

Coordinating care for Kathy and her family. If instead Kathy were enrolled in the integrated care program currently envisioned by her state’s Medicaid agency, Kathy would have had a “medical home.” Kathy’s primary care physician-led medical home team would have included her daughter, care manager, a staff member from her assisted living facility, and others. Her care team/care manager would have assisted with transfer to the emergency room and provided transition support for her admission to and discharge from the hospital and nursing home and return to her assisted living facility. And they would have provided her family the support they needed. Under an integrated delivery model, there would be “treatment in place” at the facility so Kathy could have avoided the multiple moves that made her final months a nightmare for her and for her family.

Sue. Sue is a 50-year old female enrolled in Medicare and in her state’s Medicaid fee-for-service program.  She has long-standing Multiple Sclerosis (MS), a prolonged history of depression, a prior major suicide attempt, and a history of asthma aggravated by heavy smoking.  For many years, Sue was able to use a manual wheelchair and to perform self-catheterizations.  But with slowly progressive upper extremity weakness, this became impossible.

Sue has received two hours of personal attendant care each morning and evening for the past five years without adjustment despite functional decline.  During the past two years she has undergone multiple hospitalizations for urinary tract infections, asthma exacerbations, and two long sub-acute hospital stays for pressure sore management caused by extended hours in bed and a poorly fitted manual wheelchair.  At the time of enrollment, Sue was found to have no consistent primary care or behavioral health relationship and she was severely depressed, emotionally withdrawn, functionally bedbound, incontinent, and with rapidly worsening decubitus ulcers.

Enhanced care and benefits for Sue. Sue stands to gain significant benefits under her state’s demonstration program.  Shortly after enrolling in the integrated care organization (ICO) through the state’s plan, an assessment would be done in Sue’s home that would cover both health and functional status.  This assessment would help identify Sue’s acute needs including her incontinence, ulcers, and severe depression. It would also identify her long term service and supports needs, including changes to her durable medical equipment and personal care attendant support that will support her current functional status and better address her acute issues.  This assessment would form the basis for the creation of an interdisciplinary care team and Individualized Care Plan for Sue.

As envisioned by her state’s Medicaid agency, the care team would include Sue’s selected primary care provider, a clinical care manager, a behavioral health clinician, an independent living and long term services and supports (IL-LTSS) coordinator, and others as deemed appropriate, such as a neurologist or other MS specialist. The clinical care manager would coordinate Sue’s care team to make sure that her acute needs were addressed right away. Sue’s IL-LTSS Coordinator would work to identify and coordinate DME services to address her wheelchair needs. This is possible because the ICO would have flexibility to determine the most effective solution to Sue’s wheelchair issues under a unified DME and Assistive Technology benefit, using the flexibilities provided under the integrated financial arrangement between states and CMS.

Sue’s IL-LTSS Coordinator might also recommend additional hours of personal care support, include a multi-strategy approach to addressing her behavioral health needs, and be able to offer Sue some options for community-based support services to assist her with managing her physical disability and her depression. On a longer-term basis, her clinical care manager would track any medications prescribed for Sue by other providers and would address side effects or potential harmful interactions before they became a problem.  The care team would also work with Sue to develop smoking cessation strategies consistent with Sue’s goals and a plan for achieving them that she could feel confident about.

Why The Details Matter In The Demonstration Models And In Evaluating Them

There is robust discussion around how we will know if the integrated programs are “working.” The good news is that we have a head start in answering this question since we already know what is NOT working: today’s fragmented approach. We also note that criticism of the current demonstration models, particularly the capitated managed care model, has failed to acknowledge that the models are not experimental in many states. This model has been proven effective in states that have already been working to align and integrate members in managed care.

Notwithstanding this information, we acknowledge that the evaluation component is critical for informing the future of these specific integration proposals and, perhaps more importantly, the broader direction that policymakers plan to chart. Still, it is difficult for us not to question the motives of those who would actively encourage people to “opt out” or seek to limit access to integrated care programs that represent the first-ever commitment by the government to improve, coordinate, and integrate care for the population dually eligible for Medicare and Medicaid. To determine whether this improvement actually occurs, federal and state policymakers will need to tailor the specifics of the evaluation model and metrics to each individual project. However, we believe the following related issues are clear:
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  • Federal policymakers, states, and the Medicare-Medicaid eligible members all stand to benefit from a robust process that allows for the design and testing of multiple models. Such an approach is needed to identify the models that are replicable in multiple areas across the country.
  • States are designing different models that leverage the respective expertise of the Medicaid and Medicare programs, the data that already exists about the broad spectrum of needs of the Medicare-Medicaid eligible population, and, as demonstrated by the vignettes above, the local partnerships that can meet these needs.
  • Meaningful evaluation and monitoring tools must align with the characteristics of the population that will enroll and with the overall scope of the state’s demonstration proposal.
  • As with any new program, we should expect and plan for situations that need to be modified as the demonstrations are implemented. This is a key lesson federal officials learned during the transition of the Medicare-Medicaid eligible population from Medicaid to the Medicare Part D program for their prescription drug benefits. For this reason, in addition to the overall demonstration evaluation, states and CMS are instituting ongoing monitoring mechanisms to obtain real-time information. Such information will allow them to make immediate improvements to the structure and administration of the demonstration programs.

Most states do not expect 100 percent participation in the integrated care demonstration. Conversely, though, very low participation is a barrier for the integrated care programs. Without robust participation, it will be difficult for states to administer and, in turn, for the federal and state partners to evaluate, the community-driven models of integrated care and integrated financing. Efforts to restrict or minimize beneficiary participation undermine the demonstrations’ purpose and risk harm both to those that opt out and to beneficiaries in non-demonstration states if potentially successful projects are thwarted.

Options For Beneficiaries 

Many critics of the demonstrations have noted that beneficiaries must have the choice NOT to participate in their state’s demonstration program. They go on to ask what choices individuals will have when they opt out.

While there are many important questions that must still be answered, this question is one that can be answered immediately: individuals who choose not to participate in a demonstration program will have access to the existing dysfunctional and misaligned set of programs that exist today. We believe this would be an unfortunate outcome for the individuals whose quality of life could be changed by participating in integrated and coordinated care programs.

The Road Ahead

Integrating care for Medicare-Medicaid eligible individuals is a monumental challenge. States, in partnership with CMS, are attempting to align the programs to do just this. The current demonstration program may or may not be the answer. But states must have a reasonable opportunity to carry out the delivery system models in order to find out.

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1 Response to “Who Stands To Benefit From The Duals Demonstration?”

  1. Jed Constantz Says:

    The observations made by Matt and Andrea are important in many respects. Some of us have been following a fairly logical course of action based on a natural expansion of the Medical Home Model of Primary Care as the key to more effective and efficient care regardless of a patient’s payer status or combination of payers. Moreover, just a handful of us have discovered a “natural funding source” available through Medicaid, in collaboration with either state or local DSS, that will appropriately finance healthcare redesign/reform at the primary care level. The logic is perfect and enhance care delivery among targeted Patient Centered Medical Home (PCMH) recognized and/or capable primary care – with a focus on Medicaid – and then naturally expand the payer stakeholder community. This expansion among non-Medicaid payers would occur based on which payers have nothing to lose and everything to gain by connecting to and collaborating with high performing primary care – particularly and ultimately employers, both public and private. Our results are unmistakable for high performing primary care – improved patient circumstance and lower aggregate spending for the population being cared for. The key is for state Medicaid Directors to both recognize and embrace these opportunities as they surface.

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