Opportunities to Integrate Care for Dual Eligibles

1. Opportunities to Integrate Care for Dual Eligibles October 5, 2010 Alice Lind Director, Long Term Care Center for Health Care Strategies

2. State Challenges in Serving Duals 8.8 million duals drive roughly 50% of Medicaid spending. 1.6 million duals account for more than 70% of all dual spending. Medicaid covers 86% of LTC costs for duals. 58% of state spending for duals goes toward LTC. $14,972 = average annual state spending per dual, with 9 states spending >$20,000 per dual. Less than 120,000 (under 2%) are in integrated special needs plans. Majority (over 7 million) are in fragmented, fee-for-service in both programs. $250+ Billion annual Medicare/Medicaid costs 2 2

3. The Value of Integration • Creates a single point of accountability for the delivery, coordination and management of primary/preventive, acute, behavioral, and long-term supports and services • Promotes and measures improvements in health outcomes • Promotes the use of home- and community-based long-term supports and services • Blends/aligns Medicare and Medicaid’s services and financing to streamline care and eliminate cost shifting • Slows the rate of both Medicare and Medicaid cost growth AND, most importantly… • Provides better care for beneficiaries that is sensitive to their needs and preferences

4. Making it Real: Meet Mattie … 4

5. For patients like Mattie, integration can improve care and outcomes by . . . Looking for areas of high overlap between Medicaid and Medicare, duplications, avoidable utilization, gaps in care, etc. Inpatient hospital Home health SNF AND NF Pharmacy Coordinating (Medicare) hospital discharge planning with (Medicaid) community-based supports and services Improving transitions between institutional and community settings, such as hospital and home, hospital and nursing facility, nursing facility and home 5

6. Elements of Integrated Care Models Integrated care models arrange for all Medicaid/Medicare services (including long-term supports and services). Core elements include: • Comprehensive assessment • Personalized plan of care, including a flexible range of benefits • Multidisciplinary care team that puts the person at the center • Involvement of the family caregiver • Comprehensive provider network, with solid primary care base • Strong home and community-based service options • Adequate consumer protections, including ombudsperson • Robust data-sharing and communications system • Aligned financial incentives

7. Challenges to Integrating Care Administrative and operational hurdles Lack of good data (access to, analysis of and linkage between Medicare and Medicaid) Financial misalignments between Medicare and Medicaid Enrollment issues Stakeholder (advocates, providers) concern/resistance Network adequacy (especially LTSS) Difficulties in developing and bringing duals-focused SNPs to scale

8. Medicare and Medicaid Integration Vehicles Medicare Advantage Special Needs Plans (SNPs) Program for All-Inclusive Care for Elderly (PACE) Shared Savings Model State as Integrated Entity 8

9. Medicare Advantage Special Needs Plans Health plan provides Medicare and Medicaid primary, acute, and LTSS services Considerations: presence of managed care infrastructure; SNP capacity to provide LTSS; extent to which administrative processes are streamlined; MIPPA requirements around care provisions Examples: Minnesota, New Mexico 9 9

10. Medicare Advantage Special Needs Plans PROS Flexibility to choose level of integration Budget predictability for state Streamlining of administrative processes Multidisciplinary care team / model of care requirements CONS Medicare/Medicaid funding not truly blended Separate state and federal plan oversight Consumers must still navigate two systems if full integration is not supported Not viable for all states States unlikely to share in acute care savings Future viability (i.e. impact of Medicare Advantage rate cuts) 10

11. PACE Program • Provides eligible beneficiaries with Medicare and Medicaid medical and supportive services • Considerations: resource intensive; statutory change likely needed to change age/LOC requirements; full integration of services and processes • Example: PACE programs operate in 31 states; total enrollment around 20,000 (as of 12/09)

12. PROS Fully integrates Medicare/Medicaid funding One set of comprehensive services and administrative processes Established quality measures State can serve as PACE entity and can provide PACE through state plans CONS Inability for state to share in integration-related savings Limited provider network Age & level of care requirements may hinder wide-scale adoption PACE Program

13. SharedSavings Model • Physician groups, integrated health systems, or regional coalitions create tailored alternative payment system (typically non-capitated) to support integrated care for duals on a FFS basis • Considerations: Strength of provider network; overlap between Medicare and Medicaid providers; extent to which LTSS integrated; capacity/infrastructure • Example: North Carolina (only state to date; authority via Medicare Health Care Quality [aka 646] Demonstration)

14. PROS Eliminates Medicaid disincentive to provide care management Supports better coordination than FFS Incremental step toward assuming more risk/blending of funds CONS Maintains FFS system, which does not support quality of care vs. quantity Medicare/Medicaid funding is not fully blended Limited opportunity for state to share savings Shared Savings Model

15. State as Integrated Entity • Emerging model that would allow state to act as integrator of Medicare- and Medicaid-covered benefits and blend the two funding streams • Considerations: State infrastructure/capacity; provider capacity; funding methodologies • Examples: Massachusetts & Vermont exploring this approach (would require waiver or demo authority; no states have authority to date)

16. PROS Complete blending of funds More potential savings can accrue to state State can reinvest savings to better coordinate care Better coordination than FFS Flexibility to provide state-specific options Increased accountability to improve care CONS State bears Medicare risk Voluntary nature of program can influence rate uncertainty, adverse selection, etc. Potential health plan, provider, and/or consumer reluctance to lose direct Medicare relationship State as Integrated Entity

17. Questions? 17

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