This is the second part of an interview with Marsha Gold of Mathematica Policy Research on reform options for the care of dual eligibles.
Should one payer be responsible for all care of dual eligibles to encourage such goals (reduce costs and improve quality), and if so, which direction is more likely to achieve success: federalizing the Medicaid costs of dual eligibles or moving them into private plans?
This is a tough question that can and should be debated. Making one payer responsible for all care for dual eligibles is appealing because it creates a single funding stream in which the incentives can be aligned to encourage coordinated care. But modifying current programs to create such a single stream would be difficult financially and politically and might have significant risks for beneficiaries.
Currently, Medicare is the main source of payment for acute care services used by dual eligibles and Medicaid is the main source of payment for everything else (including long-term care and supplemental services like transportation) as well as cost sharing for Medicare benefits. Because dual eligibles rely to differing extents on coverage from both programs, it is important to align their incentives and coordinate payments and requirements. The advantage of having Medicare at the helm is that the Medicare program is national, with consistent requirements across states and consistent protections for beneficiaries, whether or not they are dual eligibles. However, it seems unlikely that this or any future Congress would agree to absorb full responsibility for Medicaid’s long-term care services, which now differ substantially across states.
Medicaid programs have the advantage of being closer to the ground and potentially better positioned to coordinate care systems that differ across communities. Unfortunately, eligibility requirements and benefit levels, as well as the capacity of Medicaid programs, vary from state to state, despite national requirements and standards now in place. States also lack Medicare’s scale and experience in paying for acute care services and gaining provider participation. If the states became responsible for all care for dual eligibles, some states might do better than the federal government but others likely would end up using Medicare financing as a “cash cow” to help them negotiate tough budget constraints, leaving care for dual eligibles the same or potentially even worse.
Politics aside, it seems to me that the most productive approach might be to require the two programs to work together more effectively, with flexible models that would vary with the state context but would retain a substantial national role in paying for and shaping care for dual eligibles. Under this approach, Medicare would still have final authority for acute care services and states would be responsible for long-term care, but the two would be required to develop operating agreements that support more effective work across programs to enhance care for dual eligibles.
Have dual eligible special needs plans (SNPs) successfully coordinated the Medicare and Medicaid streams of care for these beneficiaries so far?
Generally no, though it isn’t necessarily the SNPs’ fault because they haven’t had the authority or tools to do so nor have they been selected because of their focus on this objective. Historically, states have had few incentives to make coordinating Medicare and Medicaid a high priority and those who tried faced many constraints (some Medicare related). That may be changing as a result of new initiatives included in the Patient Protection and Affordable Care Act to encourage better systems of care for dual eligibles, including the establishment of the Medicare-Medicaid Coordination Office and the Center for Medicare and Medicaid Innovations.
The interview will conclude this afternoon.