Medicaid Spending Research Articles

Impact of a Private Health Insurance Mandate on Public Sector Autism Service Use in Pennsylvania

Many states have implemented regulations (commonly referred to as waivers) to increase access to publicly insured services for autism spectrum disorders (ASD). In recent years, several states have passed legislation requiring improved coverage for ASD services by private insurers. This study examines the impact of such legislation on use of Medicaid-funded ASD services. We used Medicaid claims data from July 1, 2006, through June 30, 2010, to identify children with ASD and to assess their use of behavioral health services and psychotropic medications. Service and medication use were examined in four consecutive 12-month periods: the 2 years preceding passage of the legislation, the year after passage but before implementation, and the year after implementation. We examined differences in use of services and medications, and used growth rates from nonwaiver children to estimate the impact of the legislation on Medicaid spending for waiver-eligible children with ASD. The number of children with ASD receiving Medicaid services increased 20% from 2006-2007 to 2009-2010. The growth rate among children affected by the legislation was comparable to that of other groups before passage of the legislation but decreased after the legislation's passage. We project that, without the legislation, growth in this population would have been 46% greater in 2009-2010 than observed, associated with spending of more than $8 million in 2009-2010. Passage of legislation increasing private insurance coverage of ASD services may decrease the number of families seeking eligibility to obtain Medicaid-funded services, with an associated substantial decrease in Medicaid expenditures.

Gradual Rebalancing Of Medicaid Long-Term Services And Supports Saves Money And Serves More People, Statistical Model Shows

States are shifting Medicaid spending on long-term services and supports from institutional to home and community-based services, a process known as rebalancing. Using fifteen years of state expenditure data, a statistical model was developed to assess the effect of rebalancing on overall spending for long-term services and supports. The model indicates that spending is affected by the way rebalancing is implemented: Gradual rebalancing, by roughly two percentage points annually, can reduce spending by about 15 percent over ten years. More rapid rebalancing can save money, break even, or increase spending, depending on the pace and program specifics. Cuts to home and community-based services that hinder rebalancing are likely to increase, not decrease, overall spending on long-term services and supports as people who were receiving these services shift into nursing homes. Because many states continue to experience budget crises, policy makers must think carefully before altering spending patterns for long-term services and supports and adopt strategies that particular states have used to successfully reduce overall spending, such as gradually shifting expenditures toward home and community-based waiver programs.

Medicare And Medicaid Spending Variations Are Strongly Linked Within Hospital Regions But Not At Overall State Level

Proposals to move toward reducing geographic differentials in health care spending have focused on patterns of spending in Medicare. We show in this article that when considering each state as a whole, there is almost no relationship between the level of spending for Medicare beneficiaries and that for other populations. In sharp contrast to these state-level results, there is a strong relationship between Medicare and Medicaid spending in comparing Hospital Referral Regions within each state. We suggest that the strong intrastate regional correlations demonstrate the importance of the supply of hospital beds, specialists, and other health care resources as determinants of use and spending. In contrast, the lack of correlation at the state level suggests that other factors, such as state-level poverty rates, influence use and spending at the state level, and that these other factors influence Medicare and non-Medicare use and spending differently. These findings demonstrate that it is important to broaden our analytic focus from Medicare beneficiaries to the larger population, and to consider the likely effects of changes in Medicare payment policy on the care received by other state residents.

State Spending On Dual Eligibles Under Age 65 Shows Variations, Evidence Of Cost Shifting From Medicaid To Medicare

Roughly half of Medicare beneficiaries under age sixty-five are also eligible for Medicaid. These "dual eligibles" have been the subject of much research because of their low income and poor health status. Previous studies suggest that some states seek to shift costly health care services for this group out of state-run Medicaid programs and into the federally funded Medicare program--for example, replacing nursing home care with hospital care. Using state-level data on dual eligibles under age sixty-five, we found support for this hypothesis. In states with below-average per capita Medicaid spending, corresponding Medicare spending was above average. These state-level estimates also revealed a nearly threefold difference in total--Medicare plus Medicaid-price--adjusted spending per person, ranging from $16,309 in Georgia to $43,587 in New York. Such large variations among people with serious diseases suggest inefficiency. Some states may be spending too little for Medicaid, meaning that some patients' needs are not being met, or some states may be spending too much, meaning that more services are being provided than needed. Such inefficiency exposes patients to unnecessary risk, drives costs up unnecessarily, and highlights the large potential gains arising from improved care coordination for dual eligibles.

Among Dual Eligibles, Identifying The Highest-Cost Individuals Could Help In Crafting More Targeted And Effective Responses

The nearly nine million people who receive Medicare and Medicaid benefits, known as dual eligibles, constitute one of the nation's most vulnerable and costly populations. Several initiatives authorized by the Affordable Care Act are intended to improve the health care delivered to dual eligibles and, at the same time, to achieve greater control of spending growth for the two government programs. We examined the 2007 costs and service use associated with dual eligibles. Although the population is indeed costly, we found nearly 40 percent of dual eligibles had lower average per capita spending than non-dual-eligible Medicare beneficiaries. In addition, we found that about 20 percent of dual eligibles accounted for more than 60 percent of combined Medicaid and Medicare spending on the dual-eligible population. But even among these high-cost dual eligibles, we found subgroups. For example, fewer than 1 percent of dual eligibles were in high-cost categories for both Medicare and Medicaid. These findings suggest that decision makers should tailor reform initiatives to account for subpopulations of dual eligibles, their costs, and their service use.

Value for the Money Spent? Exploring the Relationship Between Expenditures, Insurance Adequacy, and Access to Care for Publicly Insured Children

This study examines the relationship between total state Medicaid spending per child and measures of insurance adequacy and access to care for publicly insured children. Using the 2007 National Survey of Children's Health, seven measures of insurance adequacy and health care access were examined for publicly insured children (n = 19,715). Aggregate state-level measures were constructed, adjusting for differences in demographic, health status, and household characteristics. Per member per month (PMPM) state Medicaid spending on children ages 0-17 was calculated from capitated, fee-for-service, and administrative expenses. Adjusted measures were compared with PMPM state Medicaid spending in scatter plots, and multilevel logistic regression models tested how well state-level expenditures predicted individual adequacy and access measures. Medicaid spending PMPM was a significant predictor of both insurance adequacy and receipt of mental health services. An increase of $50 PMPM was associated with a 6-7 % increase in the likelihood that insurance would always cover needed services and allow access to providers (p = 0.04) and a 19 % increase in the likelihood of receiving mental health services (p < 0.01). For the remaining four measures, PMPM was a consistent (though not statistically significant) positive predictor. States with higher total spending per child appear to assure better access to care for Medicaid children. The policies or incentives used by the few states that get the greatest value--lower-than-median spending and higher-than-median adequacy and access--should be examined for potential best practices that other states could adapt to improve value for their Medicaid spending.

Utilization, Spending, and Price Trends for Benzodiazepines in the US Medicaid Program: 1991-2009

Although it is well-known that drug costs in the US have risen precipitously over the last 25 years, what is much less appreciated is how this rise in cost has occurred across so many seemingly distinct drug markets. To describe trends in the utilization, spending, and average per-prescription cost of benzodiazepines individually, in subgroups, and overall, in the Medicaid program. Medicaid has been the primary public payer for benzodiazepines over the past 2 decades. A retrospective, descriptive analysis was performed for the years 1991-2009 using the publicly available national Summary Files from the Medicaid State Drug Utilization Data maintained by the Centers for Medicare & Medicaid Services. Quarterly prescription counts and reimbursement amounts were calculated for all benzodiazepines reimbursed by Medicaid. Average per-prescription spending as a proxy for drug price was found by dividing reimbursement by the number of prescriptions. Prescriptions for benzodiazepines among Medicaid beneficiaries increased from 8.0 million in 1991 to 17.1 million in 2009. Expenditures rose from $131.6 million to $171.1 million over the same time period. The average per-prescription price was a little over $10 in 2009. Whereas utilization of intermediate- and long-acting agents increased over time, prescriptions for short-acting drugs fell from 1.1 million to 0.3 million (1991-2009). The percentage rise in Medicaid spending on benzodiazepines since 1991 (30.0%) was less than the general rate of inflation (57.5%), as measured by the percentage change in the consumer price index over the same time period. Relative to the rise in the number of Medicaid beneficiaries (more than doubled over the study period), there is no evidence of an extraordinary rise in the utilization of benzodiazepines. Moreover, both nominal and real average prices of benzodiazepines have fallen, primarily because of generic entry over the last 2 decades.

The Rise of Neoliberal Rhetoric and the Intersection of Modern Day Medicaid Priority: A Population Study of Young People in Nursing Homes

This exploratory study aims to examine the present state of young people (&lt;65 years of age) who reside in nursing homes due to traumatic and permanent injury. Due to the gap in the literature, this population is underrepresented in professional development training as well as service provision. This lack of appropriate and affordable care has severe consequences for nursing home residents on all domains: biological, psychological, social and spiritual. This population is expected to grow dramatically over the coming years and there is little to no advocacy for those residents. Furthermore, this paper discusses the effect of neoliberalism economic ideology in the United States and its effect on Medicaid spending priority, service allocation and overall quality of life for young people in nursing homes. Every level of society must act to reform healthcare priorities and advocate for this hidden and very vulnerable population.Keywords: Nursing homes, young people, Medicaid

Incremental Dementia-Related Expenditures in a Medicaid Population

With the growing number of older adults, understanding expenditures associated with treating medical conditions that are more prevalent among older adults is increasingly important. The objectives of this research were to estimate incremental medical encounters and incremental Medicaid expenditures associated with dementia among Indiana Medicaid recipients 40 years or older in 2004. A retrospective cohort design analyzing Indiana Medicaid administrative claims files was used. Individuals at least 40 years of age with Indiana Medicaid eligibility during 2004 were included. Patients with dementia were identified via diagnosis codes in claims files between July 2001 and December 2004. Adjusted annual incremental medical encounters and expenditures associated with dementia in 2004 were estimated using negative binomial regression and zero-inflated negative binomial regression models. A total of 18,950 individuals (13%) with dementia were identified from 145,684 who were 40 years or older. The unadjusted mean total annualized Medicaid expenditures for the cohort with dementia ($28,758) were significantly higher than the mean expenditures for the cohort without dementia ($14,609). After adjusting for covariates, Indiana Medicaid incurred annualized incremental expenditures of $9,829 per recipient with dementia. Much of the annual incremental expenditure associated with dementia was driven by the higher number of days in nursing homes and resulting nursing-home expenditures. Drug expenditures accounted for the second largest component of the incremental expenditures. On the basis of disease prevalence and per recipient annualized incremental expenditures, projected incremental annualized Indiana Medicaid spending associated with dementia for persons 40 or more years of age was $186 million. Dementia is associated with significant expenditures among Medicaid recipients. Disease management initiatives designed to reduce nursing-home use among recipients with dementia may have much potential to decrease Medicaid expenditures associated with dementia.

Older Homeless Adults: Can We Do More?

Older Homeless Adults: Can We Do More?

An intervention to improve care and reduce costs for high-risk patients with frequent hospital admissions: a pilot study

BackgroundA small percentage of high-risk patients accounts for a large proportion of Medicaid spending in the United States, which has become an urgent policy issue. Our objective was to pilot a novel patient-centered intervention for high-risk patients with frequent hospital admissions to determine its potential to improve care and reduce costs.MethodsCommunity and hospital-based care management and coordination intervention with pre-post analysis of health care utilization. We enrolled Medicaid fee-for-service patients aged 18-64 who were admitted to an urban public hospital and identified as being at high risk for hospital readmission by a validated predictive algorithm. Enrolled patients were evaluated using qualitative and quantitative interview techniques to identify needs such as transportation to/advocacy during medical appointments, mental health/substance use treatment, and home visits. A community housing partner initiated housing applications in-hospital for homeless patients. Care managers facilitated appropriate discharge plans then worked closely with patients in the community using a harm reduction approach.ResultsNineteen patients were enrolled; all were male, 18/19 were substance users, and 17/19 were homeless. Patients had a total of 64 inpatient admissions in the 12 months before the intervention, versus 40 in the following 12 months, a 37.5% reduction. Most patients (73.3%) had fewer inpatient admissions in the year after the intervention compared to the prior year. Overall ED visits also decreased after study enrollment, while outpatient clinic visits increased. Yearly study hospital Medicaid reimbursements fell an average of $16,383 per patient.ConclusionsA pilot intervention for high-cost patients shows promising results for health services usage. We are currently expanding our model to serve more patients at additional hospitals to see if the pilot's success can be replicated.Trial registrationClinicaltrials.gov Identifier: NCT01292096

Differences In The Volume Of Services And In Prices Drive Big Variations In Medicaid Spending Among US States And Regions

It is well known that Medicaid spending per beneficiary varies widely across states. However, less is known about the cause of this variation, or about whether increased spending is associated with better outcomes. In this article we describe and analyze sources of interstate variation in Medicaid spending over several years. We find substantial variations both in the volume of services and in prices. Overall, per capita spending in the ten highest-spending states was $1,650 above the average national per capita spending, of which $1,186, or 72percent, was due to the volume of services delivered. Spending in the ten lowest-spending states was $1,161 below the national average, of which $672, or 58percent, was due to volume. In the mid-Atlantic region, increased price and volume resulted in the most expensive care among regions, whereas reduced price and volume in the South Central region resulted in the least expensive care among regions. Understanding these variations in greater detail should help improve the quality and efficiency of care-a task that will become more important as Medicaid is greatly expanded under the Affordable Care Act of 2010.

Wanted: Lots Of Ideas And A Sense Of What’s Possible

From the Editor-In-Chief Health AffairsVol. 30, No. 7: New Directions In System Innovations Wanted: Lots Of Ideas And A Sense Of What’s PossibleSusan DentzerPUBLISHED:July 2011Free Accesshttps://doi.org/10.1377/hlthaff.2011.0697AboutSectionsView PDFPermissions ShareShare onFacebookTwitterLinked InRedditEmail ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsDownload Exhibits TOPICSAccountable care organizationsMedicaidMedicare savings programsPopulationsShared Savings ProgramPaymentMedicareMarketsPublic healthNursing homes“The best way to have a good idea is to have a lot of ideas,” said the famed scientist Linus Pauling. Thus inspired, this month’s Health Affairs continues our exploration of system innovations—from the latest on accountable care organizations (ACOs) to Vermont’s moves toward a single-payer system. Interim stops take us to other states innovating with medical homes for Medicaid beneficiaries; to hospitals attempting reductions in preventable readmissions; and to other places in pursuit of the famed Triple Aim.Journalist Harris Meyer’s Entry Point provides an update on the early response to the Centers for Medicare and Medicaid Services’ (CMS’s) rollout of proposed ACO models, including the Medicare Shared Savings Program, the “Pioneer” program, and the “Transitions” extension of the earlier Medicare Physician Group Practice demonstration. Proposed regulations for the Shared Savings Program were widely panned, but the other models have garnered more favorable reviews.Lest we dwell too much on these prototypes’ imperfections, however, Jay Crosson reminds us that the ACO concept—delivering more coordinated care at less cost—is clearly too important to fail. And if it does, the alternative of more ratcheting down on fee-for- service payment could be grimmer still.Variations On A ThemeIn case we need any reminder that restructuring is needed, consider Todd Gilmer and Rick Kronick’s paper on regional and state-to-state variations in Medicaid spending, which exceed the well-documented Medicare variations in scope. Controlling for case-mix, the variations are mostly driven by the volume of services provided—with the highest volumes in the states of New York, Pennsylvania, and New Jersey. The analysis suggests that the care of Medicaid patients in some states could easily be held more “accountable” for appropriateness and value.Continuing on that theme, Jamie Robinson draws on data from value-based purchasing initiatives in eight states to flesh out our understanding of hospitals’ pricing behavior. A commonly recited story line holds that hospitals, “underpaid” by Medicare and Medicaid, “cost shift” by raising prices to private payers. In fact, Robinson’s analysis suggests that there are two different phenomena at work. Hospitals in concentrated markets may focus on raising prices to private insurers, while hospitals in competitive markets cut costs so that they can survive on lower payment. That’s a lesson to hold in mind amid the ongoing trend of hospital consolidation, sometimes under the guise of creating ACOs.Changing FocusHappily, there are plenty of hospitals moving beyond business as usual, as Amy Boutwell and colleagues note. They report on a four-state collaborative among hospitals and community organizations to reduce preventable rehospitalizations. In tandem with new requirements on institutions under the Affordable Care Act, such efforts translate into an altered set of responsibilities for hospital boards of trustees, as Elisabeth Belmont and colleagues write. Legally accountable for the quality of their institutions’ care, boards must shift focus from ensuring the accountability of individual providers to improving entire systems of care.Road Less TraveledWilliam Hsiao of the Harvard School of Public Health has spent much of his career advising countries such as China and Taiwan in reforms of their health care and financing systems. Recently, though, he and coauthors turned their attentions to Vermont, having been asked by the state’s governor, Peter Shumlin, to evaluate reform options. Their recommendation—now incorporated into state law—is to move toward a payroll tax–based public health insurance fund to pay for health care. The tough road lies ahead, as Vermont determines the level of payroll tax necessary to finance the system.Finally, two papers in the section “The Care Span” examine issues of race and ethnicity in the provision of long-term supports and services. Zhanlian Feng and colleagues report that the nation’s nursing home population is increasingly black and Hispanic—partly because of demographics, but also because those populations may be less likely than whites to access home and community-based services. Meanwhile, Holly Felix and colleagues recount the success of an Arkansas experiment to identify minorities in need and equip them with services that can obviate nursing home stays.We thank The SCAN Foundation for its ongoing support of The Care Span—and we hope that innovations described in this issue continue to inspire a sense of the possible. Loading Comments... Please enable JavaScript to view the comments powered by Disqus. DetailsExhibitsReferencesRelated Article Metrics History Published online 1 July 2011 Information Project HOPE—The People-to-People Health Foundation, Inc. PDF download

Duel-Eligibles' Care Called Big Cost Driver

Sharing information and coordinating care for elderly and disabled patients who qualify for both Medicare and Medicaid could save millions of health care dollars every year, according to Health and Human Services department officials. To jump-start efforts in this area, the Medicare-Medicaid Coordination Office – created by the Affordable Care Act – now seeks to provide state Medicaid agencies with access to Medicare data on these so-called “dual eligible” patients. Data on services paid for by Medicare Parts A, B, and D will now be available on a monthly basis and at no cost to state Medicaid agencies, HHS secretary Kathleen Sebelius said at a briefing by the Department of Health and Human Services. “With this new data initiative, we're giving states a fuller picture of the health needs of the people they're serving so they can provide the best care possible,” Ms. Sebelius said. For example, she said, by sharing data on hospitalizations and prescription regimens, physicians and other health care providers can seek to prevent readmissions as well as help to ensure that patients are taking their medications appropriately. In another effort described by the speakers, the coordination office is seeking input on how to best align Medicare and Medicaid to provide both comprehensive and nonduplicative care for beneficiaries with dual eligibility. “These are chronically ill individuals who are old enough to qualify for Medicare and usually poor enough to qualify for Medicaid and [are] in very difficult health situations, but the systems have not talked to each other at all,” Ms. Sebelius said. The office has published a notice for public comment in the Federal Register seeking input about how to align care coordination, prescription drugs, cost-sharing, fee-for-service benefits, enrollment, and appeals between the two care payers. “This is the top priority because it drives the greatest costs, and yet we know if we could work together on this, we could have better health care outcomes for these individuals,” Washington Gov. Christine Gregoire (D), said during the news conference. Even as the federal government works to integrate these programs, some members of Congress are calling for the removal of the Affordable Care Act's Medicaid Maintenance of Effort provision as a cost-saving initiative. Maintenance of Effort requires states to maintain the same Medicaid coverage for adults pending implementation of health reform provisions that go into effect in January 2014. It also maintains coverage for children in Medicaid and the Children's Health Insurance Program (CHIP) through Sept. 30, 2019. In response, Ms. Sebelius said Maintenance of Effort and block grants don't hold the greatest potential for savings. “If the truth be known, the major economic driver for our Medicare costs today … is in the area of dual eligibles,” Ms. Sebelius said. Currently, 9 million Americans are dual eligibles and account for $300 billion in expenditures for Medicare and Medicaid, Dr. Donald Berwick, administrator for the Centers for Medicare and Medicaid Services, said in a statement. Dual eligibles represented 39% of Medicaid spending in 2007, according to a CMS statement. Medicaid spent about $120 billion on this group that year, or approximately twice as much as the program spent on the 29 million children it covered. Frances Correa is a senior writer with Elsevier Global Medical News.

LTC-Vital Medicaid Is on the Bargaining Table

LTC-Vital Medicaid Is on the Bargaining Table

Medicaid Savings Resulted When Community Health Workers Matched Those With Needs To Home And Community Care

The Affordable Care Act of 2010 builds on earlier efforts to expand home and community-based alternatives to institutional long-term care. Identifying people living in the community who have unmet long-term care needs and who may be at risk for entering nursing homes may be crucial to these efforts. The Arkansas Community Connector Program used specially trained community health workers to identify such people in three disadvantaged counties and connect them to Medicaid home and community-based services. The result was a 23.8percent average reduction in annual Medicaid spending per participant during the period 2005-08. Net three-year savings to the Arkansas Medicaid program equaled $2.619million. Similar interventions may help other localities achieve cost-saving and equitable access to publicly funded long-term care options other than institutional care.

Variations in Medicaid spending expose room for efficiency gains

Variations in Medicaid spending expose room for efficiency gains

Effects of Budget Resolution Remain Uncertain

Effects of Budget Resolution Remain Uncertain

Are Higher or Lower Medicare Rates Ahead?

Are Higher or Lower Medicare Rates Ahead?

Hard Choices — Alternatives for Reining In Medicare and Medicaid Spending

The debate over how to control the growth in Medicare and Medicaid spending has intensified, and alternative blueprints for reform have emerged. The two most prominent proposals have been put forward by House Budget Committee Chair Paul Ryan and the White House.