Linking a Comprehensive Payment Model to Comprehensive Care of Frail Elderly Patients

Abstract

FRAIL OLDER PATIENTS WITH MULTIPLE CHRONIC CONditions and complex health care needs receive services that are fragmented, incomplete, inefficient, and ineffective. Many of these patients are vulnerable to poor health outcomes because of age, multiple comorbidities, and poverty. Older adults with chronic health conditions spend a higher percentage of their income on health care. As a result, many frail elderly adults receive Medicare for physician and hospital care, and Medicaid, which covers some out-of-pocket costs and personal and social care services. Six million elderly adults are enrolled in both Medicare and Medicaid, also known as dual eligibles; they comprise 21% of Medicare beneficiaries. At the federal level, the Centers for Medicare & Medicaid Services (CMS) administers the Medicare and Medicaid programs. Unlike Medicare, for which all financing is federal, Medicaid funding is shared between the federal government and the states, and therefore, many Medicaid administrative decisions are made by states. Most Medicaid beneficiaries receive services through managed care; in many states this delivery model is mandatory. In contrast, a minority of Medicare beneficiaries receive services through managed care, which for Medicare is voluntary. Managed care has emerged as a potential organizational structure to coordinate the payment and program administration for dual-eligible individuals, to support the integration of medical and social services for this population. For dual-eligible individuals in managed care, health plans receive separate capitated payment from the federal government for Medicare services and the state government for Medicaid services. To date, the enrollment numbers remain relatively low with fewer than 140 000 individuals (2% of dual-eligible individuals) enrolled in these programs nationwide. The Program for All-inclusive Care for the Elderly (PACE) is one such program for community-dwelling elders who are nursing home–eligible. PACE provides a single set of requirements regarding Medicare and Medicaid services, allowing PACE organizations to enter into capitation agreements with Medicare and Medicaid for their respective services, fully integrating funding, management, and clinical decisions. In February 2010, 18 000 dual-eligible individuals were enrolled in PACE programs in 30 states. Some states have developed demonstration programs other than PACE to test models of integrated payment and service delivery for this population, stimulated by the Medicare Modernization Act of 2003, which enabled the creation of Medicare Advantage Special Need Plans. Eight states (Arizona, Massachusetts, Minnesota, New Mexico, New York, Texas, Washington, and Wisconsin) have integrated the full range of Medicare and Medicaid benefits (primary care, acute care, behavioral health, and long-term care) for approximately 120 000 dual-eligible beneficiaries through Medicare Advantage Special Need Plans. Integrated Medicare and Medicaid managed care programs have many potential advantages, including a focus on prevention, care coordination, and access to home and community-based services. Evaluation of integration projects has been limited to observational studies, the best of which have used appropriate control groups and statistical techniques. Results suggest that dual-eligible beneficiaries in these programs, as compared with those receiving services outside of managed care, have better access to home and community-based long-term care services and lower use of highcost services such as emergency department visits, hospitalizations, and nursing home stays. The voluntary nature of program participation and case selection by plans limits the ability to distinguish whether these programs are truly successful or whether the results are merely a reflection of underlying differences in the health and needs of the populations who receive care through managed care vs feefor-service. The cost-effectiveness of these programs is unproven and is dependent on the ability of plans to substitute lower-cost services for high-cost ones. Decision makers need more rigorous evaluation of these projects to establish their effectiveness, safety, and costs, and to determine the degree to which results can be generalized to important subgroups of the elderly population. There are challenges at the patient, clinician, and administrative levels of the state and federal agencies that hinder