Press Release

Embargoed Until Contact

June 04, 2012

Sue Ducat
Director of Communications
(301) 841-9962


Cost and Care Coordination of Medicare/Medicaid Dual Eligibles Addressed in Health Affairs' June 2012 Issue


Complex patients responsible for $319.5 billion in annual spending under federal programs


Bethesda, MD -- Research and analysis published today in the June 2012 issue of Health Affairs, supported by a grant from The SCAN Foundation, emphasizes the need to develop new ways of paying for and providing care for the roughly 9 million Americans who are eligible for both Medicare and Medicaid benefits because of age, income, and/or disability.


Improving care for "dually eligible" patients has become a priority for federal and state policy makers. In 2008 dual eligibles made up 20 percent of the Medicare population but accounted for 31 percent of the program's spending. Likewise, they comprised 15 percent of Medicaid beneficiaries, yet accounted for 39 percent of Medicaid costs. Studies and analysis in the June issue reflect policy makers' increasing efforts to improve access to benefits, address poorly coordinated care between the programs, and reduce unnecessary spending on these dually eligible patients.


In her featured study, lead author Patricia Neuman of the Kaiser Family Foundation and colleagues emphasize the need for reform, but recommend a careful approach to developing new care and payment models for dual-eligible patients with multiple chronic conditions and a high demand for both mental health and long-term care services. The authors offer five principles to guide reform efforts, and stress the need to accommodate diverse patient needs and build in sufficient time for thoughtful plan development and accountability measures.


"The Affordable Care Act (ACA) opens the door for new approaches for coordinating care for dual-eligible beneficiaries who are among the sickest, frailest, poorest, and most costly on Medicare," Neuman says. "Because these beneficiaries have complex but diverse needs, this effort will require highly targeted solutions, sound planning, and careful oversight to truly realize improvements in care management and savings."

The most significant effort supported by the ACA involves a federal-state partnership to test new delivery and payment models via demonstration projects, including capitated payments and managed fee-for-service approaches. As of May 2012, 26 states were exploring different models through these projects and are in active negotiations with the Centers for Medicare and Medicaid Services (CMS) on the details.


In another featured study, Mathematica's Marsha R. Gold, together with colleagues from the Kaiser Family Foundation, found gaps in the publicly available data on dual eligibles enrolled in managed care and information on how different programs coordinate with one another in caring for these patients. As CMS considers proposals to integrate care for dual eligibles from more than half of the states, many using managed care, this study provides an integrated look at current enrollment of dual eligibles in Medicare and Medicaid managed care programs. The researchers found few beneficiaries in integrated arrangements set up to coordinate care across the programs and considerable diversity in managed care experiences for dual eligibles across the states.


"While seeking to improve care for dual eligibles is important, policy makers would be well advised to consider the level of existing experience and how to target integration efforts so they yield benefits for people, the programs, and the public budget," says Gold. "Furthermore, as these proposals are debated, better data need to be made publicly available in a timely fashion so researchers and other analysts can better understand enrollment in current arrangements, how programs work together now, and how that is changing."


Additional studies in the June issue related to dual eligibles and similar populations focus on the following:

  • Zhanlian Feng, Brown University, finds a 34 percent increase in Medicare patients placed "under observation" in hospitals for evaluation/short-term treatment vs. admitted as inpatients from 2007-2009, resulting in periods in observation as long as three days and potentially greater out-of-pocket costs to patients if they were eventually transferred to skilled nursing facilities.

  • Randall Brown, Mathematica, identifies six practices used by care coordinators that can be incorporated into medical homes, accountable care organizations, and other policy initiatives to potentially reduce hospitalizations.

  • R. Tamara Konetzka, University of Chicago, finds that users of Medicaid home- and community-based services are especially vulnerable to avoidable hospital admissions, resulting in unnecessary federal spending.

  • Deborah Peikes, Mathematica, shows how after initially faltering, Washington University's Medicare Coordinated Care Demonstration was able to reduce hospitalizations and spending through a more localized approach.

Other noteworthy studies in the June issue include:


FEHBP Experiences Lack of Competition in Some Areas, Raising Cost Concerns for Exchange Plans. A study by Timothy D. McBride at Washington University's Brown School and colleagues examines the availability of plans and enrollment levels under the Federal Employees Health Benefits Program (FEHBP), which has been cited as a model for the insurance exchanges. It found that while FEHBP plans were widely available, enrollment was concentrated in plans offered by a few organizations. Other key findings: enrollment was more concentrated in rural areas, and the average biweekly premiums for an individual were lowest ($58.48) in counties where competition was extremely high, compared to areas of low competition ($65.13).


Creation of State Basic Health Programs Would Lead to 4 Percent Fewer People Churning Between Medicaid and Exchanges. Ann Hwang of the Executive Office of Health and Human Services for the Commonwealth of Massachusetts and colleagues examine the potential of the Basic Health Program created under the ACA to reduce the number of people who shift between Medicaid and health insurance exchanges. The study found that these programs would prevent "churning" for 1.8 million adults nationwide--a reduction of 4 percent from the estimated 45 million who might move annually between Medicaid and the exchanges. They also found that a Basic Health Program would protect some lower-income families from having to pay back some of their tax credits if their incomes rise during the year.


U.S. Hospice Industry Experienced Considerable Turbulence from Changes in Ownership, Growth, and Shift to For-Profit Status. An examination of US hospices active in Medicare from 1999 to 2009 by Jennifer Thompson of the Harvard Pilgrim Health Care Institute and colleagues revealed that by 2009, more than 40 percent of Medicare-certified hospices active in 1999 had one or more changes in ownership over the previous decade. Other findings: Four out of five Medicare-certified hospices that entered the marketplace between 2000 and 2009 were for-profit; the proportion of hospices with 100 or more employees doubled to 5 percent between 1999 and 2009.

About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.