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Medicare–Medicaid 'Dual Eligibles' Continue to Pose Cost Issue

By Emily Ethridge, CQ Roll Call

December 11, 2012 -- Lawmakers are continuing to look for ways to save money by improving care for "dual eligibles," a costly group of beneficiaries who qualify for both Medicare and Medicaid.

In 2010, about 9.9 million people qualified for both programs, according to the Medicare Payment Advisory Commission (MedPAC). Those beneficiaries tend to have lower incomes and more medical needs than seniors in traditional Medicare.

And they account for a disproportionate share of the two programs' costs. According to MedPAC, dual eligibles represent 18 percent of Medicare's patient population but 31 percent of the program's spending. They make up 15 percent of Medicaid enrollees and 40 percent of Medicaid spending.

The Senate Finance Committee will hold a hearing on the group, with testimony from three state medical officials and Melanie Bella, director of the Medicare–Medicaid Coordination Office at the Centers for Medicare and Medicaid Services (CMS).

"We need to keep up our efforts to make sure our federal health programs work better to lower costs and protect patients' rights," Finance Chairman Max Baucus, D-Mont., said in a written statement. "We made progress in health reform coordinating between Medicare and Medicaid, and there's more for us to do."

CMS is working to move up to 2 million dual-eligible beneficiaries into state-run pilot programs over the next few years to determine whether they can improve care and save money. One of the programs would move dual eligibles into managed care plans, under which plans get a prospective payment to provide comprehensive care.

The administration says managed care plans could provide better coordination for beneficiaries. Currently, many dual eligibles have to see a variety of doctors and take several medications, with no one in charge to oversee their care.

But some critics, including West Virginia Democrat Jay Rockefeller, have questioned whether managed care plans would work well for beneficiaries in that group and their complex health care needs. Unlike those in fee-for-service plans, patients in managed care plans can have less choice when it comes to providers.

Rockefeller, Baucus, and four House Democrats requested a report from the Government Accountability Office on the consumer protections and different requirements in Medicare and Medicaid, especially when it comes to managed care plans.

The report found that dual eligibles face a variety of standards from Medicare and Medicaid. For example, while some states require Medicaid beneficiaries to enroll in managed care plans, Medicare enrollment in managed care is voluntary. In addition, the two programs can have different consumer protection requirements and have different appeals processes that don't correspond with each other.

"I continue to be very concerned with the administration's efforts to move Americans who are eligible for both Medicare and Medicaid into Medicaid managed care plans," Rockefeller said in a written statement. "This report reinforces the need to focus on the best ways to provide care to these patients, including essential consumer protection requirements, which vary dramatically across state and health programs. This report makes clear that we still have a lot of work to do to determine the best path forward to effectively provide care for these patients."

Other groups have looked at making changes to treatment of dual eligibles in order to find federal health care savings. Last year, the deficit reduction group led by Vice President Joseph R. Biden Jr. discussed finding savings by better coordinating care.

President Barack Obama's fiscal deficit commission proposed moving all dual eligibles into Medicaid, saying it would save $12 billion through 2020 because Medicaid's bigger managed care system would result in better coordination.

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