New policy document examines options to integrate care for dual eligible beneficiaries

The SCAN FoundationMar 11 2010

The SCAN Foundation released a policy options document by the Center for Health Care Strategies, Inc. (CHCS) summarizing four options to integrate care for dual eligibles, the nearly 9 million seniors and adults with disabilities who qualify for both Medicare and Medicaid.

Annual costs of caring for this population are approximately $250 billion – nearly half of all Medicaid expenditures and a quarter of all Medicare outlays – causing concerned national and state policymakers to consider creative alternatives for improving quality of care that is also cost effective.

"Dual eligibles are among the nation's most chronically ill and most costly patients, but roughly 80 percent are in uncoordinated fee-for-service care," said Melanie Bella, senior vice president at CHCS. "Today, there is a growing imperative as well as unprecedented opportunities to fix this non-system of care. We hope this document opens up new avenues for states to explore higher-quality and more cost effective care for individuals who are dually eligible."

This technical assistance tool was created upon request from the California Department of Health Care Services (DHCS) to support discussions around the state's 1115 Medicaid waiver development, a process to improve health and long-term care services for low-income Californians.

"This document provides a clear understanding of what states can do to improve care for their dual eligible population," said DHCS Director David Maxwell-Jolly. "With over 1 million dual eligibles, California has about 13 percent of the nation's total dual beneficiaries. We look forward to thinking through options on how to improve their care in our state."

The four proposed options for integrating Medicare and Medicaid services are compared in the easy-to-follow tool. The document suggests that options must include the following core elements to provide beneficiaries with the right care at the right time: strong patient-centered care; interdisciplinary care teams; provider networks capable of meeting a full range of patient needs; enhanced use of home- and community-based services; robust data sharing; consumer protections; and financial alignment that supports integration.

Specifically, the options include:

• Special Needs Plans (SNPs) – SNPs for dual eligibles establish relationships between Medicare Advantage plans and state Medicaid agencies. Through these arrangements, states and SNPs can offer the full array of Medicare, Medicaid, and supplemental benefits within a single plan so beneficiaries have one benefit package and one set of providers to obtain care.
• Program for All-Inclusive Care for the Elderly (PACE) – PACE serves individuals who are age 55 and older, certified for nursing home care, able to live in the community, and residing within a PACE service area. By integrating Medicare and Medicaid funding streams, eligible beneficiaries receive all needed Medicare and Medicaid medical and supportive services in a fully coordinated fashion.
• Shared Savings Model – The shared savings model allows physician groups, integrated health systems or regional coalitions to join together to create a tailored alternative payment system on a fee-for-service basis. The focus of this model is to align payment incentives and address cost shifting between Medicare and Medicaid.
• State as Integrated Entity – This option would integrate Medicare and Medicaid benefits for dual eligibles at the state level. The Medicaid program would receive an agreed-upon amount of Medicare funding for participating dually eligible beneficiaries and would assume responsibility for the Medicare benefit.

"The current system of health and long-term care for dual eligibles is incredibly fragmented, forcing vulnerable seniors and adults with disabilities to fend for themselves in finding and obtaining appropriate, high quality care," said Bruce Chernof, MD, president and CEO of The SCAN Foundation. "Our vision is a society where seniors receive medical treatment and human services integrated in the setting most appropriate to their needs. This report is a first step toward realizing this vision for dual eligibles."