Ohio Changes Dual Eligible Program
Ohio recently became one of only three states that have received approval from the Centers for Medicare and Medicaid Services to revamp the way it provides care for individuals enrolled in both programs.
Next September, dual eligibles in the state will be taking part in a demonstration using managed care to coordinate services and reduce the costs of treating this high-touch population.
Individuals enrolled in both Medicare and Medicaid are typically poor, elderly and/or disabled. Medicaid funds are used to pay for premiums and services not covered under Medicare. In Ohio, approximately 2.2 million people are enrolled in Medicaid; about 14 percent of whom are dual eligibles. Though they are a small portion of beneficiaries, they account for about 40 percent of Medicaid spending.
These numbers are similar to what is seen nationwide with this group. According to a 2004 report to Congress by Medicare Payment Advisory Commission, or MedPAC, dual eligibles are the most expensive of all Medicare beneficiaries. They average $20,840 per person in annual healthcare costs – more than double the amount of other Medicare enrollees.
“They drive an unusually large portion of health care spending in the United States,” said Sundar Subramanian, a partner in the North American healthcare and operations practices at Booz & Company. “About nine million beneficiaries are about 65% of the spending.”
One of the biggest challenges to caring for dual eligibles is the complexity of care they require.
Enrollees sometimes have multiple chronic conditions like COPD, diabetes and heart disease. They spend a lot of time in and out of treatment – Subramanian said a typical patient may spend eight months of the year in a hospital. They also might be people with cognitive disabilities or someone with physical disabilities that would need different kinds of at-home services.
“The members need specialized care as well as a lot of integration and coordination of care between providers,” he said.
Often, dual eligible beneficiaries work between long-term care, home- and community-based services, hospitals, physicians’ offices and behavioral health. Subramanian said there is an enormous coordination challenge to be tackled to improve outcomes and end overlap of services.
There is also a basic administrative challenge to treating these patients. Medicare and Medicaid pay for different kinds of services and compensate and incentivize providers differently. The programs are also extremely complex for both patients and providers to navigate.
Along with Massachusetts and Washington, Ohio is going to try and figure out the best ways to manage this population.
“For the first time, there is going to be one coordinated payment between Medicare and Medicaid,” Subramanian said. “This is an incredible opportunity to integrate care and manage cost within the plan.”
Seven regions encompassing 29 counties will take part in the program in Ohio. There will be at least two plans to choose from in each region for the 114,000 eligible beneficiaries, said Sam Rossi, spokesperson for the Ohio Medicaid office.
“We want to eliminate the inefficiencies and overlap that comes with serving this population,” Rossi said. “We thought the best possible option is managed care. This is a population that does need help and more attention.”
Within the demonstration, called the Integrated Care Delivery System, plans will assess the behavioral, home, medical and social needs of all enrollees. A team will create individualized plans and all enrollees will have a care manager that works with their care team to coordinate services.
CMS is funding and managing evaluation for the states’ demonstrations, which will be measured and monitored to gauge their impact on utilization and expenditures as well as quality, beneficiary experience and factors like care coordination and transition.
“We are working to modernize Medicaid and to improve outcomes and care coordination,” Rossi said. “This population accounts for roughly one-third of Medicaid spending in Ohio and our budget in the most recent year was about 19 billion for Medicaid overall in Ohio.”
Any answer that the states create will have to be high-touch, but translatable across broad population of people. It will also have to work with a large range of providers all the while being cost effective.
“The key for managed care companies is how they can really adopt best practices and use scale them to a model that can be broadly used,” Subramanian said. “There is technology that can be broadly applied like patient monitoring that can help manage the cost. It can be high-touch because high-tech and high-touch can be cost effective.”
However, concerns remain. According to Community Catalyst, there are some doubts that the managed care plans will be paid enough to care for the dual-eligible population.
Community Catalyst also questioned whether or not the projected savings from the new dual-eligible program – 1% in the first year, 2% in the second year, and 4% in the final year will be realized.
“The analysis conducted by CMS and the state should be transparent so that all stakeholders understand the factors taken into consideration in developing the savings expectations,” Community Catalyst said in a statement.
