New CBO Report on Characteristics, Health Care Spending, & Evolving Policies Surrounding Dual Eligibles

As the nation continues to explore ways to better coordinate care for dual eligible beneficiaries, often called Medi-Medis here in California, the Congressional Budget Office (CBO) has released a report that examines the characteristics and costs of dual eligible beneficiaries. CBO does nonpartisan analysis of the federal budget and the economy for Congress.
The report explains that federal and state government spent a total of more than $250B on health care benefits for 9 million dual eligible beneficiaries in 2009. It details the characteristics of this population that affect health care needs and spending, current payment systems, efforts to integrate financing and coordinate care, and potential legislative actions.

You can access the report here.

Some highlights include:

• Separate funding streams with different payment rates and coverage rules create conflicting financial incentives for federal and state governments and for health care providers. Medicare generally pays for acute care and post-acute care, whereas Medicaid pays for long-term services and supports and other benefits that Medicare does not cover. Receiving care through separate programs increases that likelihood that dual eligible beneficiaries will be treated by a variety of health care providers who are not coordinating their care. This could lead to both an increase in costs and worse health outcomes.

• Dual eligible beneficiaries make up for a disproportionate share of federal and state spending for Medicare and Medicaid. Half of full dual eligible beneficiaries initially qualified for Medicare because of disability and nearly one-fifth have three of more chronic conditions. As a result, more than 40 percent of duals use long-term services and supports. Though they only account for 13 percent of the Medicare enrollees and aged, blind, or disabled Medicaid enrollees, they account for 34 percent of the total spending.

• In the past, states have explored other methods to eliminate differences in financial incentives and to improve the coordination and quality of care for dual eligible beneficiaries within the scope of current law. They have established initiatives under which Medicare, Medicaid, and private insurers pay fees to the same primary care practice to manage care for patients, contracted with plans in Medicare’s managed care program (Medicare Advantage) to provide services covered by Medicaid, coordinated physical and behavioral health care for dual eligible beneficiaries who have chronic mental illnesses, and developed managed LTSS programs.

• Twenty-six states applied to participate in Affordable Care Act’s three-year demonstration project to experiment with different ways of integrating Medicare’s and Medicaid’s financing for duals. The demonstration allows for a notable change to the regulations that govern Medicare and Medicaid: Beneficiaries may be enrolled automatically in managed care plans for Medicare benefits (a process known as passive enrollment), provided that they have the option of disenrolling or switching plans.

Here in California, our demonstration project is known as Cal MediConnect. To make sure you get the latest updates on efforts to coordinate care for California’s dual eligibles, sign up for our email list.