The federal government on Wednesday signaled its intent to expand coverage options for Americans who qualify for both Medicare and Medicaid, though the states will largely be in the driver’s seat moving forward.
In a letter to the 50 state governors from administrator Seema Verma, the Centers for Medicare & Medicaid Services (CMS) invited states to participate in existing test programs for dual-eligible coverage or develop their own.
“Our goal is to bring shared accountability for creating a more seamless experience for beneficiaries and providers across the two programs, while ensuring that the Medicaid programs’ incentives are aligned and pointed toward lower cost and better outcomes,” Verma wrote.
So-called “dual-eligible” beneficiaries tend to represent the most vulnerable group that relies on government health care benefits — elderly people with disabilities and higher rates of chronic illness and other societal risk factors. But as Verma pointed out in her letter to states, many dual-eligibles don’t have a single place to turn for maximizing their benefits, with state Medicaid and federal Medicare programs frequently not talking with each other about these enrollees.
“These challenges have contributed to sub-optimal health outcomes, despite our shared investment of over $300 billion a year to serve this population,” Verma wrote. “In many states, dually eligible individuals account for over a third of state spending on Medicaid.”
Under Wednesday’s directive, states have three choices to test more integrated care for dual-eligibles. In the first, the capitated financial alignment model, Medicare and Medicaid team up with health plans known as Medicare-Medicaid Plans (MMPs) to provide a one-stop contract for dual-eligibles. Nine states currently use this model on a pilot basis, with CMS extending the demonstration through 2023 for existing plans — and opening the program to any other interested state.
So far, the programs have generated estimated savings of 4.4%, based on reductions in per-capita rates paid to the MMPs, while 90% of users rated their experience as a 7 or higher on a 0-to-10 satisfaction scale.
The second option, managed fee-for-service, would encourage shared savings between Medicaid and Medicare: For instance, states would receive Medicare dollars saved through the use of certain novel FFS interventions, such as “Medicaid health homes” in Washington state that coordinate primary, behavioral, and long-term care for dual-eligibles with two or more chronic conditions.
Washington’s managed fee-for-service model resulted in 11% savings to Medicare Parts A and B, along with improvements in quality and enrollee satisfaction — though a similar effort in Colorado did not succeed.
Finally, CMS gave states free rein to develop their own unique models for dual-eligibles, with a particular focus on coordinating care, reducing costs for both Medicare and Medicaid, and improving health outcomes.
“I encourage you to talk to your health policy staff and state Medicaid leadership about these opportunities to better serve those older adults and people with disabilities,” Verma concluded in her letter. “The Trump administration stands ready to partner with you and your staff on this important challenge.”
While the overall news came as a positive for Cheryl Phillips, president of the SNP Alliance, she told Skilled Nursing News that certain problems remain — particularly for the dual-eligibles themselves.
Phillips’s organization represents firms that provide special needs plans (SNPs) — including Institutional Special Needs Plans (I-SNPs), which cover nursing home residents, and Dual-Eligible Special Needs Plans (D-SNPs). Though she supports the Verma administration’s general view toward expanding options and focusing on dual-eligibles, she noted that the wide variety of models can frequently prove confusing for those on the ground level.
“I’ll use the restaurant menu analogy — if I go to a restaurant with far too many choices, I just pick an old standard that I’m familiar with,” Phillips said.
With so many different choices across states and no unified source of information for interested enrollees, dual-eligibles around the country may end up simply staying in fee-for-service models, she noted.
In addition, Phillips expressed concern over CMS’s focus on demonstrations and cost savings as lynchpins of any future development. Though experimentation has shown officials potential paths forward — and, in the case of Colorado, failures — Phillips said it will soon be time to commit to certain structures that have been proven to work.
And going forward, those models can’t always require plans to substantially reduce Medicare and Medicaid expenditures. Certain states such as Minnesota have already taken great strides in cutting costs, and high-risk enrollees in both Medicare and Medicaid will always require more spending than those with fewer chronic conditions and health issues.
“If all we do is rely on cost savings, at some point, we have rung this towel dry,” Phillips said. “Look at quality measures, beneficiary satisfaction, because we can’t have cost continue to decline indefinitely.”