By John Reichard, CQ HealthBeat Editor
September 21, 2011 -- Dual eligibles. Seamless care. Fragmented programs. Perhaps never has so much jargon been uttered at a single hearing about a single health policy issue.
But as vague as the language might be, what seemed crystal clear at a recent Senate Finance Committee hearing is that senators have a firm understanding that health care services for many of the nation's sickest people—those enrolled in both Medicare and Medicaid—are so poorly organized that tens of billions of dollars are wasted each year.
There are services that are duplicated, treatments given in needlessly expensive facilities and hospitalizations that need never occur because of poor oversight of the patients. It's a matter of urgency, lawmakers said, to move more aggressively to improve the situation.
"We have been treading water on this question literally for decades," complained Sen. Ron Wyden, D-Ore. "I look back [to] when I was co-director of the Oregon Gray Panthers and we were doing exactly what we're doing now. We were talking about demonstration projects, small-scale kinds of studies.
"We knew that this was the group that was . . . fitted for essentially the house-call arrangement kind of approach," he added. "A team approach, docs, nurse practitioners, a multidisciplinary approach. And here we are today in pretty much the same place" with very little of that occurring.
"He's absolutely correct," said Sen. Benjamin L. Cardin, D-Md. "We need bolder approaches."
Republican senators, including Sens. Orrin G. Hatch of Utah and Charles E. Grassley, joined Democrats in calling for faster action and speculating about a fundamental restructuring of how services are delivered to the duals.
Listening sympathetically was the hearing's lone witness, Melanie Bella, director of the Medicare-Medicaid Coordination Office. Created under the health law (PL 111-148, PL 111-152), the office is supposed to find ways to harmonize the way Medicare and Medicaid work in providing services for the population of 9 million duals.
"I'm either hopeful or naive that by creating this office there is a force that might be able to push for a broader and faster expansion [of coordinated care] than we've been able to do in the past," she said.
In general, duals have enormous care needs. No one entity or person is in charge of making sure that those needs are met; that medications are appropriate and don't cause harmful interactions; that people with diseases like diabetes and chronic heart failure get proper preventive care and follow treatment regimens that keep them out of the hospital; or that patients follow discharge instructions on leaving the hospital and get the drugs and tests they need to keep them from having to be readmitted.
Compounding the problem is that half of the duals have mental impairments such as dementia and Alzheimer's. Many are in nursing homes. And Medicare and Medicaid are structured in a way that discourages efforts to find savings.
For example, if Medicaid assigns a case manager to oversee the treatment needs of a dual and prevent unnecessary hospitalizations, the savings don't go to the state Medicaid program but to the federal Medicare program, which pays for the hospital care of the duals. As a result, few duals have such care managers.
Finance Chairman Max Baucus, D-Mont., pressed Bella on her goals for improving care of the duals and for specifics on how to measure progress.
"Our ultimate metric is how many people can serve in integrated and coordinated systems," she said. "Of the 9 million duals that exist today, we believe about 100,000 of them are in such a system," Bella said.
"For 2012, our goal is to have a million of the nine million duals in a coordinated, integrated system of care, and then to keep building year after year, particularly through our demonstrations and our work with states," she added.
Demonstration programs and data are part of the strategy Bella is following, including demonstration programs set up under the health law.
Up to one-quarter of hospitalizations of the duals are thought to be preventable.
"What our office is doing is trying to put together care models and other programs that focus on care coordination for folks—on medication management, on care transitions when people are going between settings, because we believe that those provide the foundation of keeping people out of the hospital when they don't need to be in the hospitals.
"Where this is even more compelling is for people who are in nursing homes," she said. "We actually believe there is a 40 percent preventable hospitalization rate for beneficiaries in nursing homes."
Bella said her office is doing a demonstration program "to stop this churn that is bad for patients and shouldn't be happening."
Bella's office has awarded contracts of up to $1 million to 15 states to design better coordinated approaches to care. Part of these efforts will test two new ways of paying for care.
In one model, the state, the Centers for Medicare and Medicaid Services (CMS) and a health plan would enter into a three-way contract under which a per-capita fixed payment will be made to the health plan to meet the care needs of the dual involved. The payment will be set at a level that recognizes savings to the state and the federal government compared with the expected level of payment if services were not coordinated. A second form of payment to be tested involves using the traditional fee-for-service payment rather than a capitated one. A state will establish a program to manage the care involved. The state and CMS will establish a target for what the services involved would cost if the care were unmanaged. To the extent there are savings, CMS and the state would share them.
Wyden implored Bella to pursue a model tested by the Veterans Administration that involves delivering services to people in their homes rather than in nursing homes.
Wyden touted a "blockbuster" VA study of patients treated in their homes that reduced hospital stays by 62 percent and days in the nursing home by 88 percent. "Those folks are almost exactly in the same spot as folks who are eligible for Medicare and Medicaid except for the fact that they are even sicker," he said.
Wyden also pressed Bella to name a goal for how many duals could be treated at home in this way.
"We like to have targets as well," she replied. "What I'd like to do is get back to you. I'd like to go back and make sure that that type of program—everyone would not fall into that criteria—look at how many of the 9 million we think would be appropriate and come back to you with a quantifiable target that matches our 1 million to have in broad systems by 2012."
Hatch asked Bella whether it would make sense to mandate enrollment of the duals in managed systems. She sidestepped the question but noted that states now can request a system of "passive" enrollment with an "opt out." In other words, if CMS approves a state request for such a system, a state could assign duals to a managed-care program, but they would have the right to opt out.
Grassley wondered whether it made sense to have Medicare and Medicaid jointly caring for duals. "That is the million-dollar question," she said. The demos will help determine what states do best and what the feds do best, she said, in order to come up with a better system. Grassley also wondered whether there is "light at the end of the tunnel" for moving out of the currently disorganized system.
"I think there is definitely light at the end of the tunnel," she said. "The question is how quickly we can get there."
Bella also defended the demos by saying they would help produce findings that could serve as the basis of recommendations to lawmakers to make needed legislative changes. She noted that about 2 million of the 9 million duals would benefit from coordinated care tested by the demonstration programs.
