Focus on Quality, Dual Eligibles Important in Medicaid Challenges

Reston, Virginia—To cope with increasing Medicaid populations, the federal government and states are working together to emphasize quality initiatives and better understand how the Patient Protection and Affordable Care Act (ACA) will impact the healthcare industry. They are also concerned with dual eligibles (people covered by Medicare and Medicaid) who account for a large percentage of the program costs. At the Leadership Summit on Medicaid Managed Care, speakers discussed these issues during a keynote session titled Restructuring Care Delivery Models in Medicaid Managed Care. AHRQ Initiatives Irene Fraser, PhD, director in the center for delivery, organization and market at the Agency for Healthcare Research and Quality (AHRQ), discussed how the federal government is promoting quality issues. The agency’s Healthcare Cost and Utilization Project (HCUP) includes databases and is the largest collection of hospital care information in the United States. The HCUP has data for each state with the exception of Alabama, Delaware, Idaho, and North Dakota. The HCUP tracks Medicaid compared with other payers and has data pertaining to inpatient, emergency department, and ambulatory surgeries. It does not include outpatient data. For instance, Dr. Fraser cited data from 2008 that found 30-day hospital readmission rates were approximately 2 times higher for Medicaid adult patients compared with adults who were uninsured or covered by private insurance. AHRQ also has quality indicators based on available hospital discharge data. The measures used are endorsed by the National Quality Forum. Inpatient quality indicators examine in-hospital measures such as mortality, utilization, and volume. Prevention quality indicators examine avoidable hospitalizations and other conditions that could have been avoided if patients received high-quality care. Patient safety quality indicators focus on complications and unexpected deaths. Finally, pediatric and neonatal quality indicators examine complications and unexpected deaths in children. Dr. Fraser said public reports on hospital quality are available in two thirds of states. In addition, the AHRQ provides people and hospitals with several tools to measure quality. She mentioned MONAHRQ, a free software tool from AHRQ that converts health data into easily readable, useful information and helps hospitals create their own Web sites where they can report and analyze the data. Using MONAHRQ, hospitals can track admission rates for health problems in each county of a state, according to Dr. Fraser. In all, there is $30 billion each year in potentially preventable hospitalizations. If the industry embraced the new technology, Dr. Fraser said it could save billions of dollars while also helping patients’ health and reducing their hospital stays. “There is general agreement that to improve quality and costs, we need changes,” Dr. Fraser said. “But the fact you’re changing something doesn’t mean it will improve. That’s where research comes in.” Trade Group Perspective Thomas Johnson, president and chief executive officer of Medicaid Health Plans of America, followed with an overview of the expansion of Medicaid managed care. The trade group represents 95 member plans from 36 states plus the District of Columbia. Its mission includes promoting better access to coordinated care, quality assurance and improvement, delivery system innovation, cost savings, and reduced waste, fraud, and abuse. Mr. Johnson said Medicaid managed care is becoming more prevalent as states face budgetary challenges and need to cut costs. For years, Republican governors have supported Medicaid managed care, according to Mr. Johnson. Recently, he has seen Democrats embrace managed care, as well. Every state with the exception of Alaska, New Hampshire, and Wyoming has some sort of Medicaid managed care program, and New Hampshire will have managed care later this year, according to Mr. Johnson. He added that the District of Columbia and 36 states have contracts with private Medicaid managed care plans, while 31 have primary care case management programs. Of all Medicaid enrollees, 72% are in managed care, up from 65% in 2007 before the economic downturn began. With states experiencing pressures related to shrinking budgets and rising deficits, they are enacting increased copayments as well as reductions in provider rates, benefits, and prescription drugs, according to Mr. Johnson. They are also focusing on managing groups of people that are difficult, high risk, high need, and chronically ill. In particular, states are trying to determine how to cover the 9 million dual eligibles in the United States; 60% have chronic conditions and 43% have mental impairments. They account for 15% of the Medicaid population but 39% of the program’s spending. In 2007, the group cost Medicaid $120 billion, according to Mr. Johnson. Mr. Johnson said states are also dealing with other issues. The ACA included a provision that will charge health insurers an annual fee of $8 billion to $14 billion between 2014 and 2019. He added that the Supreme Court’s expected June decision on whether the ACA’s mandate that everyone must purchase insurance or face a fine will play a major role in determining insurers’ futures, as will the results of the 2012 elections. Until then, Mr. Johnson said, there is uncertainty surrounding the creation of health insurance exchanges and accountable care organizations as well as the expected Medicaid expansion that is part of the ACA. “There’s still some uncertainty,” Mr. Johnson said. “The outcome of this [2012] election will have a direct impact on whether the ACA is repealed.” Dual Eligibles James Verdier, senior fellow at Mathematica Policy Research, concluded the session by talking about dual eligibles and coordinated care options, including Medicare Advantage special needs plans (SNPs). Of the 9 million dual eligibles, 77% receive full benefits from both Medicare and Medicaid. Approximately 40% are <65 years of age and disabled or chronically ill. According to Mr. Verdier, the following states have integrated Medicare and Medicaid managed care programs: Arizona, California, Massachusetts, Minnesota, New Mexico, New York, Texas, Washington, and Wisconsin. Medicare enrollment is voluntary in each state, while Medicaid enrollment is voluntary in every state other than Arizona, California, New Mexico, and Texas. Mr. Verdier cited data showing there were 507 SNPs in February 2012 enrolling approximately 1.4 million people, including 322 dual-eligible SNPs with 1.15 million enrollees. SNPs account for 11% of all people in Medicare Advantage plans. Of patients in Medicare, 26% are in Medicare Advantage plans. All Medicare Advantage plans (including SNPs) have the same payment structures. However, Mr. Verdier said SNPs have stricter care management and performance reporting requirements. To better coordinate Medicare and Medicaid benefits for dual eligibles and improve collaboration between the federal government and states, the Centers for Medicare & Medicaid Services (CMS) created the Medicare-Medicaid Coordination Office. In April 2011, CMS selected 15 states to receive contracts of up to $1 million each for dual-eligible demonstration projects. The demonstrations are required to start by January 1, 2013. CMS also announced that 38 states and the District of Columbia expressed interest in participating in a program that integrates care for dual eligibles via capitated or managed fee-for-service models. According to Mr. Verdier, the models can be SNPs or other qualified managed care entities. Insurers are preparing to service the dual eligibles, according to Mr. Verdier, and Wall Street analysts are optimistic that coordinating care for the population could lead to strong financial performance. Still, Mr. Verdier believes it is not as easy as it looks on paper. “A lot of people are underestimating the complexity of treating these people and getting into the Medicaid business,” he said.