Making Managed Care Work for Dual Eligibles

Dual eligibles—the class of Americans that qualify for both Medicaid and Medicare coverage—are mostly older adults with low incomes and tend to be the sickest beneficiaries covered by either Medicaid or Medicare. Friction, care gaps, and financial misalignment between Medicaid and Medicare means that these beneficiaries account for a disproportionate share of healthcare cost expenditures. To remediate these challenges, states are increasingly looking toward managed care organizations for better coordinating the care of dual-eligible beneficiaries.

According to the most recent data in 2009, there are 9.2 million beneficiaries who were classified as low-income elderly or disabled. Of those beneficiaries, 7.1 million were full-duals, while 2.1 million were partial-duals. Full-duals account for 36% of total Medicare spending and 39% of total Medicaid spending. Lastly, the average annual cost for a dual-eligible is $33,300—almost 4 times the $8300 cost for a non-dual eligible.

Mary Ptacek, RPh, CGP, vice president, Medicare and government programs, Pharmaceutical Strategies Group LLC, says there are many challenges with dual eligible, including different missions for Medicare and Medicaid (medical vs social necessity respectively), diversity of services needed, use of long-term care services rather than episodic care, and separate funding streams resulting in separate priorities. Dr Ptacek says the “one size fits all” model cannot work for dual beneficiaries, and suggests that managed care can help in a variety of ways.

“Right now the gold standard, at least in my opinion, is to have an SNP,” says Dr Ptacek. “An SNP is a managed care plan that specializes in a dual-eligible population. It results in simplification for the beneficiary [as] they have 1 source for their healthcare needs, [and] helps the provider because they only have 1 payer.”

Other opportunities for improvement include case management to coordinate care, expanded access to home or community-based services, tailored communications to explain benefits, and support through call centers.

Challenges exist in dealing with 2 different regulatory agencies, including barriers related to culture, language, and lack of a permanent residence. In trying to address those challenges, the Centers for Medicare & Medicaid Services (CMS) is stressing 2 demonstration models, the capitated health plan model and the managed fee‐for‐service model. Nationwide, 26 states have submitted letters of intent for a demonstration, 15 states have proposals pending with CMS, 6 states have signed contracts with CMS, and 5 states have dropped out.

Cynthia Pigg, PharmD, senior vice president, Pharmacy Magellan Medicaid Administration, Inc, provided one example of such a duals demonstration in Massachusetts called One Care. This integrated healthcare pilot was developed in order to better serve adults with disabilities, aged 21 to 64 years, who receive both MassHealth and Medicare benefits. Dr Pigg said that the goals of this demonstration included improving the beneficiary experience in accessing care, delivering person‐centered care, and improving quality. Some of the expected outcomes of these goals are to reduce over‐utilization of high‐cost hospital care, reduce underutilization of services and support, and improve chronic disease management. She added that the One Care model serves as an Integrated Care Organization, which is structured to create payment models that hold providers accountable for the care they deliver, reward quality of care/improved health outcomes, link payment incentives with quality metrics, and reduce healthcare spending, among other innovative initiatives.

“Pharmacy is a critical piece of this, we play a critical role,” said Dr Pigg. “I tell people we wouldn’t be in the business we are if everybody followed evidence-based practice, but we know for a variety of reasons that’s not done, and that’s a role for us as professionals in pharmaceutical care.”