The Centers for Medicare & Medicaid Services is looking to partner with states to determine better models to treat the 12 million dual-eligible Medicaid and Medicare beneficiaries in the country.
CMS and states spend more than $300 billion annually on this patient population, many of whom suffer from multiple chronic conditions made more difficult to treat by social and economic barriers.
The cost for dual-eligible population is outsized when compared to its size. According to data from CMS, while dual-eligible patients make up only 15 percent of Medicaid enrollees, they are responsible for 33 percent of the program’s expenditures.
“Less than 10 percent of dually eligible individuals are enrolled in any form of care that integrates Medicare and Medicaid services, and instead have to navigate disconnected delivery and payment systems,” CMS Administrator Seema Verma said in a statement.
“This lack of coordination can lead to fragmented care for individuals, misaligned incentives for payers and providers, and administrative inefficiencies and programmatic burdens for all.”
The goal from the agency is to promote new models which can better integrate Medicare and Medicaid services and create a more seamless experience for both beneficiaries and providers working across the two programs.
One major goal is to allow states to share in savings and benefits gained from investment in better care for the dual-eligible population.
In a letter addressed to state Medicaid leaders, Verma laid out a few potential payment approaches to address the issue of dual eligible patients, including a capitated payment model which would provide the full array of Medicare and Medicaid services with a set dollar reimbursement amount.
Nine states are currently piloting the model, which creates a three-way contract between the state, CMS and Medicare-Medicaid Plans. So far, CMS said state savings for states have averaged 4.4 percent in these test markets.
Through the experiments, Verma said the agency has been able to foster a competitive marketplace with multiple offerings that incentivizes health plans to invest in services that address the patient population.
CMS said it is currently open to extending the initial state pilots and expanding the geographic scope of the capitated programs.
For states that administer dual-eligible patients on a fee-for-service basis, Verma laid out a merged managed care model that would allow states to share in Medicare savings for metrics like reducing hospital readmissions.
Washington and Colorado are currently testing out the model. In one instance, providers in Washington are using Medicaid health homes to deliver high-intensity care to high-risk beneficiaries and sharing in the cost savings.
CMS said preliminary data from Washington’s program has been positive, with gross savings for Medicare Part A and Part B of 11 percent over three years. This has resulted in $36 million in performance payments to the state.
The letter from CMS also opens up the opportunity to potentially partner on state-specific models developed internally meant to better serve dual eligible patients and reduce Medicare and Medicaid expenditures.
CMS has made payment delivery reform a key initiative, with the ultimate goal of moving towards a outcomes-based payment system and reducing expenditures as Medicare faces an uncertain future.
A few recent initiatives include the launch of the agency’s Primary Cares Model, as well as the recent expansion of supplementary benefits for Medicare Advantage beneficiaries meant to tackle social determinants of health.
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