As the cost of healthcare continues to skyrocket and as states’ healthcare budgets continue to be stretched thin, many states are grappling with the task of how to improve care while stabilizing costs for their most expensive patients.
Dually eligible patients – those individuals that are covered by both the Medicare and Medicaid healthcare programs – are often the most costly patients to treat. In Ohio, approximately 182,000 residents fall into this category. While dual-eligible individuals make up only 14 percent of Ohio’s total Medicaid enrollment, they account for 40 percent of the state's overall Medicaid spending.
To better manage this population and lower healthcare costs, Ohio Gov. John Kasich has proposed a demonstration project that aims to improve care for dual eligibles.
State-run Medicaid programs and the federally administered Medicare program are managed separately, so care can often be uncoordinated for people who qualify for both programs when they see and use a variety of healthcare providers and services. Poorly coordinated healthcare often results in unnecessary hospitalizations, avoidable readmissions, duplicated medical testing and other medical errors that drive up the price of healthcare.
“With no single point of accountability, long‐term care services and supports, behavioral health services, and physical health services are poorly coordinated,” the final proposal says. “The result is diminished quality of care for Medicare‐Medicaid enrollees and unnecessarily high costs for taxpayers.”
The proposal calls for gradual enrollment of dually eligible beneficiaries into an “Integrated Care Delivery System” – most likely a managed care plan – that will coordinate medical care, behavioral health services and long-term services and supports across all settings for dual eligibles in an effort improve outcomes and better manage costs.
Gov. Kasich’s Office of Health Transformation released a draft proposal of the three-year pilot program on Feb. 27. After that, the office submitted the proposal to the Centers for Medicare and Medicaid Services and made it public on April 2. An estimated 114,000 Ohioans would be enrolled in the new Integrated Care Delivery System demonstration project.
The Patient Protection and Affordable Care Act authorized the creation of a new federal Center for Medicare and Medicaid Innovation to encourage states to integrate physical, behavioral and long-term care services into a seamless and comprehensive care experience for Medicare-Medicaid enrollees.
Under the Affordable Care Act, states could choose a modified fee-for-service payment system or a capitation model in which a state, CMS and a health plan enter into a three-way contract, and the plan receives a prospective blended payment to provide comprehensive, coordinated care. Ohio chose the latter option.
The pilot program will focus on delivering more clinically appropriate and cost-effective care, including the increased use of home healthcare services.
“Ohio anticipates that the reduction in costs through this model will enable more Medicare-Medicaid enrollees to receive the medical and supportive services they need in their own homes and other community-based settings, rather than in more costly institutional settings,” the proposal says.
The Partnership for Quality Home Healthcare – a national coalition representing more than 1,500 community- and hospital-based home health agencies nationwide – said it supports the program.
"Enabling seniors to remain at home allows for better chronic condition management, improved outcomes, and lower costs,” said Eric Berger, CEO of the Partnership for Quality Home Healthcare, in a statement.
A 2011 report by Avalere Health LLC determined that home healthcare use by patients with chronic illnesses resulted in a $2.81 billion reduction in post-hospitalization Medicare Part A spending and an estimated 20,426 fewer hospital readmissions between October 2006 and September 2009. Currently, approximately 3.4 million Medicare beneficiaries nationwide receive skilled home healthcare services to treat illnesses related to acute, chronic or rehabilitative needs.
Both the Ohio Association of Area Agencies on Aging and Ohio AARP have also released statements in support of the new pilot program.
Under the proposal, the Integrated Care Delivery System will use a person-centered care coordination model that includes the individual in the development of their care plan. The proposed system will also use a payment structure that blends Medicare and Medicaid funding to mitigate conflicting incentives that exist between the two programs.
Public comments on the proposal are being accepted through May 4, 2012 and can be submitted at OH‐MedicareMedicaidCoordination@cms.hhs.gov.
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