Health and Human Services declined to comment for this story, but Melanie Bella, director of the Medicare-Medicaid Coordination Office at HHS, said in recent Senate testimony that the plan would be carefully overseen by her office and was designed to achieve cost savings while “improving health care delivery” and streamlining services.
Congress and past presidents have long wrestled with the effort to rein in the costs of dual-eligible patients. The Simpson-Bowles deficit commission recommended moving the entire population into managed-care plans for a 10-year budget savings of $12 billion.
The current pilot adopts a version of that model. To get approval, states must guarantee that both Medicare and Medicaid would save money. They must also agree to accept a fixed payment to cover all care for each patient. While rules say the private plans must cover all standard Medicare benefits, they also waive many Medicare rules and leave insurer selection to the states. The Massachusetts plan guarantees up-front savings that would grow from 1 percent in the first year to 4 percent in the third year.
People enrolled in private plans can switch back to traditional Medicare. But advocates worry this could be disruptive for the patients: Studies show that 58 percent suffer from “cognitive impairments.”
The managed-care industry is gearing up for the expansion. Three large insurers have purchased companies that insure Medicaid beneficiaries. For years, states have been moving Medicaid patients into managed-care plans, with mixed results. But this pilot represents a new market: It is the first large program that would pool Medicare and Medicaid benefits in a single, state-administered plan.
Some experts see opportunities to improve care by bringing both programs under one umbrella, but they caution that expectations of huge cost savings may be overly optimistic.
“The problem with this population is that all the strategies that the health plans have been used to using historically are going to backfire,” said Chris Duff, executive director of the Disability Practice Institute, an umbrella organization for small programs that provide coordinated care to dual-eligibles. He warned that slashing provider rates, limiting visits, and using other conventional cost-control measures could lead to expensive hospitalizations for frail dual-eligible patients.
But the states are enthusiastic about the pilot programs and believe they will be able to provide better care at lower cost.
Tennessee, which already contracts with managed-care companies for Medicaid services, has asked to move all 138,000 of its dual-eligibles into the new program. “These are states that are committed to serving this community better,” said Patti Killingsworth, chief of long-term care operations for the state's Bureau of TennCare.