Today, the Department of Health and Human Services (HHS) announced three new initiatives to help states improve the quality and lower the cost of care for the nine million Americans who are eligible for both Medicare and Medicaid (dual eligibles).

The initiatives include:

A demonstration program to test two new financial models designed to help states improve quality and share in the lower costs that result from better coordinating care for individuals enrolled in Medicare and Medicaid.
A demonstration program to help states improve the quality of care for people in nursing homes by providing these individuals with the treatment they need without having to go to a hospital.
A technical resource center to help all states improve care for high-need, high-cost beneficiaries.

More than $300 billion is spent each year to care for dual eligibles. In Medicaid, these individuals represented 15 percent of enrollees and 39 percent of all Medicaid expenditures. In Medicare, they represented 16 percent of enrollees and 27 percent of program expenditures.

HHS is working to increase the number of dual enrollees in systems that coordinate care. Coordinated care may improve the quality of care individuals receive and reduce costs for both states and the federal government.

In order to better coordinate care, CMS issued new guidance on a demonstration designed to align financing between Medicare and Medicaid through two models. These models include:

A state, CMS, and health plan enter into a three-way contract where the managed care plan receives a prospective blended payment to provide comprehensive, coordinated care.
A state and CMS enter into an agreement by which the state would be eligible to benefit from savings resulting from managed fee for service initiatives designed to improve quality and reduce costs for both Medicare and Medicaid.

The CMS Center for Medicare and Medicaid Innovation will test these models to determine whether they save money while also preserving or enhancing the quality of care for dual enrollees.

All states that meet standards and conditions will have the option to pursue either or both of these models. CMS has provided detailed information to state Medicaid directors interested in participating in the demonstration.

CMS also announced a new initiative to help states improve the quality of care for people in nursing homes. Nearly two-thirds of nursing facility residents are in Medicaid, and most are also in Medicare. The CMS Innovation Center in collaboration with the CMS Medicare-Medicaid Coordination Office will establish a new demonstration focused on reducing preventable inpatient hospitalizations among residents of nursing facilities by providing these individuals with the treatment they need without having to unnecessarily go to a hospital. Hospitalizations are often expensive and dangerous for frail elders and people with disabilities, and cost Medicare billions of dollars each year. Research from 2005 by CMS on dual eligible nursing facility residents found that almost 40 percent of hospital admissions were preventable, accounting for 314,000 potentially avoidable hospitalizations and $2.6 billion in Medicare expenditures.

Starting this fall, CMS will competitively select independent organizations to partner with and implement evidence-based interventions at interested nursing facilities. These interventions could include using nurse practitioners in nursing facilities, supporting transitions between hospitals and nursing facilities, and implementing best practices to prevent falls, pressure ulcers, urinary tract infections, or other events that lead to poor health outcomes and expensive hospitalizations. Additionally, this initiative supports the administration’s Partnership for Patients goal of reducing hospital readmission rates by 20 percent by the end of 2013.

The final initiative involves establishing a resource center to help states in delivering coordinated health care to high-need, high-cost beneficiaries, including those with chronic conditions and/or Medicare-Medicaid enrollees. This resource center will provide technical assistance to states at all levels of readiness to better serve beneficiaries, improve quality and reduce costs.

These three new programs coincide with previous initiatives, launched earlier this year, which share Medicare data with states to support care coordination and collect input on ways to improve alignment across Medicare and Medicaid.

Instant Insights /

New initatives will improve care, lower costs for dual eligibles

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