Thursday, February 24, 2011

Dual Eligibles and what NC could do

Kaiser Health News with an interesting interview with Melanie Bella, director of the new Federal Coordinated Health Care Office (CHCO) aka "office of the duals." Dual Eligibles are persons who are eligible for Medicare (because they are 65+; or permanently disabled or have ESRD) and Medicaid (because they are poor). Such persons tend to be very ill and/or disabled. A good many live in nursing homes, but most live in the community. Some became eligible for Medicaid by paying for nursing home care (spending down) while others were poor and/or disabled prior to moving to a nursing home.

Medicare and Medicaid were not designed to work together. Medicare has standard benefits, while Medicaid differs state to state. Dual eligibles tend to use large amounts of health care (Medicare spends about 5x more on dual eligibles than other Medicare beneficiaries) because they are very sick. The CHCO office is designed to focus on both quality and cost concerns in providing care for such persons. In particular, this office is focusing on the over 3 Million persons who are dual eligibles and younger than age 65 (most are permanently disabled).

Bella sums up the main goals of the office as follows:

"It's really two main themes. Improve the beneficiaries' experience and make it easier for them to understand and navigate the system, so they can expect to get good care."

Another goal is to reduce the cost of caring for such persons, especially because many high cost events are signs of system failures and may not follow patient preferences. Along these lines, state demonstrations in which state Medicaid programs get increased money, flexibility and responsibility to care for patients have been tried and sound like priorities for this office. Some hear this as 'block granting' of Medicaid which sounds like more responsibility to states with less money. However, it seems clear to me that one payer should assume responsibility for providing care and being responsible for outcomes for the dual eligibles.

My intuition is that it would be better for the responsibility to pay for the care of dual eligibles be taken over by Medicare. This would mean Medicare would become responsible for the long term care portion of care for dual eligibles in addition to their other services. A particular barrier for dual eligibles is in access to hospice services paid for by Medicare. Most such care is provided in the home of patients, but if you live in a nursing home paid for by Medicaid, there are numerous barriers to accessing the Medicare hospice benefit. This likely leads to suboptimal care from a patient preference and quality standpoint, and probably results in more expensive care.

I would like to see North Carolina put together a Medicaid and a sec. 1332 Affordable Care Act Waiver along the following general lines:
  • Medicare become financially responsible for all the care of the dual eligibles, including long stay nursing home care, with expanded access to concurrent palliative care and hospice being readily available without the patient unelecting curative care (the current Medicare rule).
  • North Carolina move toward a goal of ending acute care Medicaid for non dual-eligible persons who are eligible for Medicaid, and instead provide premium support for the purchase of private health insurance in the exchanges to be set up under the ACA. Medicaid would identify and provide extra services needed by such groups, if any.
  • Evaluate this approach to addressing dual eligibles to determine the impact of concurrent expanded access to palliative/hospice care on quality and costs, along with one entity being financially responsible for everything. It would provide an important test of the model of concurrent care that has been shown to reduce costs and improve quality in one private insurance company (not a dual eligible population). A key aspect of palliative care is focus on the patient's goals of care which is key for improved quality.
  • Idea 1 (Medicare responsible for full cost of dual eligible) could be expected to reduce costs for the state, while idea 2 (buy-in non dual eligible Medicaid eligible persons into private health insurance) would be expected increase costs for the state, because premiums for private insurance cost more than does Medicaid. However, transitioning away from acute care Medicaid would remove from our state both the stigma of this insurance type and the lower payment rate (which is why it costs less to insure someone via Medicaid) that leads providers to not want to provide care to Medicaid beneficiaries.
  • Big unknown: the effect of competition in the exchanges on premiums is unproven. Having more consumers shopping in them would maximize the chances for consumers to benefit through insurers competing for their business. There are only 14 Million persons in the U.S. with individually purchase policies today (110 Million with Medicare or Medicaid; 160 Million with group purchase private insurance), so the most unproven part of the ACA is how well consumers will be as shoppers for their health insurance. But, if we are going to try it, lets try it.
Doing something like this means that you accept that the ACA is the current vehicle we have to move ahead. This type of state tweaking and experimentation is what is likely inevitable and needed. If states begin to develop ideas and models, I would anticipate increasing flexibility to allow states to experiment. If a Democratic Governor and a Republican Legislature went together and asked for the right to try a new model, I would expect our state would get maximal leeway. The political pressure to allow North Carolina to try a new model that had bipartisan support in our state would be enormous.

To all my friends in North Carolina who have been mostly saying what they are against....don't like this idea....what are yours?


  1. Don
    I have had some talks with folks in NY in the PACE program. Essentially, for the dual program to work, you need docs/providers/facilities to participate and accept the rates.

    Looking at it from NC lens, Mcare would need to step in, contract with a network--or get a local MCO to do it, and make it favorable enough to all parties. After all, they must be satisfied with caring for this higher risk, higher burden cache of individuals. Doable, but not easy, and collapsing the program in some ways is like creating an ACO for this cohort. Value networks, oversight, drilling down key--or this unwieldy group will grow at same cost level as before.

    The other issue I think about is places like AZ and FL, rust belt regions, etc., where avg age higher, Mcaid baseline varies for what states put in (lower), and for one state vs another, to turn over to feds could be an uneven veritable windfall.

    You can bet though, for a place like NY, my digs, CMS is not going to let us relinquish the high degree of participation we currently employ.

    Anyway, so long as their is commericial, FFS Mcare around, buy in and networks are key. But essentially, you are talking about programs that will pay less generously.


  2. Brad F
    all fair points. It will be hard. Maybe a smaller step is duals in one part of state into an ACO that has concurrent palliative as key piece. Of course for hospitals, duals are good business.

    Hard thing is a dollar saved is a dollar reduced from someone's income.

    I don't follow this sentence "You can bet though, for a place like NY, my digs, CMS is not going to let us relinquish the high degree of participation we currently employ."

  3. NYS Medicaid spending highest in nation in absolute terms and per capita.

    We have generous waivers and need to scale back--see NYT today.

    My point is that our (NYS) generous system is so entrenched, reliance on federal dollars so great, that to scale back to a "Florida" level of spending in the short term would require a rewriting of the rule book.

    Wouldnt happen, but just saying...