Improving Care and Lowering Costs for Dual Eligible Beneficiaries

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1 Improving Care and Lowering Costs for Dual Eligible Beneficiaries An Overview of Federal and State Efforts on Duals and Suggested Strategies to Position PACE National PACE Association September 13, 2011

2 Presentation Outline Factors driving efforts to improve care and lower costs for the dually eligible individuals Brief overview of the duals Federal initiatives to improve care and lower costs for duals Review of 15 CMS state grantees proposals to improve care and lower cost for duals Discussion of strategies to distinguish and position PACE NPA recommendations to CMS concerning PACE demonstration and expansion Q&A

3 Factors Driving Activities to Improve Care and Lower Costs for the Duals Medicaid costs are rapidly escalating Almost 17% of state spending in 2009 (excluding federal matching payments) (Kaiser) Expenditures grew 8.8% in 2010 (Kaiser/Health Affairs) New Medicaid beneficiaries (all) grew 8% a year between 2008 and 2010 (Health Affairs) Growing recognition that duals are not well served by current fee-for-service system Fragmentation and lack of coordination escalates costs Affordable Care Act (ACA) created new initiatives and demonstrations Designed to encourage states, in particular, to explore improved approaches to coordinate and integrate care for duals

4 Brief Overview of the Duals Nearly 9 million and quickly growing!!! 5.5M seniors and 3.4M disabled in 2010 Very Expensive! Duals have nearly five times the per capita spending (Medicare and Medicaid) of non-duals ($20,902 versus $4,553) (Kaiser) 15% of Medicaid enrollees - 39% of costs (Kaiser) 21% of Medicare enrollees 36% of costs (Kaiser) Medicare costs are 60% higher than non-duals (MedPAC) A very diverse set of individuals SSI eligible non-frail seniors Low-income frail seniors Working age disabled Individuals with intellectual disabilities

5 Federal Initiatives to Improve Care and Lower Costs for Duals ACA of 2010 created the Federal Medicare-Medicaid Coordination Office (Office of the Duals) See Charged with improving integration of Medicare & Medicaid Encourage and support state innovations and demonstrations Identify federal regulatory barriers to integration and alignment of Medicare and Medicaid ACA created a number of new demonstrations intended to better integrate care and control costs Independence at Home Health Homes Community Based Transitions Program Accountable Care Organizations Congressional hearings on improving care for the duals Energy and Commerce 6/21/11 NPA Testified 7

6 State Efforts to Improve Care and Lower Costs to the Duals Current focal point is the 15 states awarded $1M each by CMS in April to develop new service and payment models for duals CA, CO, CT, MA, MI, MN, NY, NC, OK, OR, SC, TN, VT, WA, WI Summaries can be found at: Page Grantee states have 12 months (until 4/2012) to further develop their proposed designs CMS will then determine which states designs will be implemented based on funding and approval

7 State Efforts to Improve Care and Lower Costs to the Duals CA, CO, CT, MA, MI, MN, NY, NC, OK, OR, SC, TN, VT, WA, WI 13 of 15 are PACE States Significant variation regarding states proposed service delivery models, target population, enrollment strategies, benefits package design, payment and beneficiary protections Only OK explicitly stated plans to expand PACE as part of their strategy

8 Financial Models to Support State Efforts to Integrate Care for Duals On July 8 CMS issued guidance to states regarding two models to align Medicare and Medicaid for duals 1. Capitated model Will use three-way agreement between CMS, the state and the plan to integrate capitated Medicare and Medicaid payments 2. Fee for service model Make performance payments to states based on Medicare savings resulting from effective case management of duals Open to all states and letters of intent due 10/1/11

9 Questions?

10 Strategies to Distinguish and Position PACE PACE is a provider, not a health plan, and has daily and close contact with its enrollees PACE is well suited to serve the frail elderly, the majority of whom have dementia and need daily oversight and services PACE integrates the full range of Medicare and Medicaid care services, not just financing like health plans Using employed caregivers assures that all needed services are identified, integrated and managed by a team of caregivers who work together closely to minimize expensive nursing home use and sentinel events

11 Strategies to Distinguish and Position PACE PACE serves exclusively the frail elderly, which are the most costly and challenging subset of the duals, most of whom have some form of dementia Given the high degree of risk for nursing home placement among the frail elderly, since PACE is a provider based entity and fully at risk for NH costs, PACE is uniquely well suited to most effectively serve the frail elderly PACE assumes full financial risk for all services, unlike most existing state health plan based models which limit nursing home risk As a provider based entity operating under full financial risk for all services including all NH care, PACE is most effective at supporting enrollees ability to remain living in the community PACE Medicaid rates reflect assumption of full nursing home financial risk and are a blend between nursing home and waiver costs Costs to the state are not impacted by enrollees service utilization

12 Strategies to Distinguish and Position PACE In summary: Position PACE as a solution/resource PACE can provide budgetary certainty to the state through its comprehensive Medicaid capitation PACE is the only fully integrated and accountable model of care that currently serves the duals and has a 20 year record of success Suggest the state build around PACE with their integrated care strategies The infrastructure of PACE is robust and was resource intensive to create; should be preserved Suggest that the state look to PACE to serve NHC duals and allow plans to serve non-nhc duals Advocate for the preservation of distinct Medicaid capitated rates for nursing home eligible seniors Such a strategy will provide an opportunity, at the point of NH eligibility, for duals enrolled in health plans to potentially exercise a PACE enrollment choice

13 Review of NPA PACE Demo and Expansion Ideas Regulatory Modifications: Reduce reliance on PACE center Expand opportunities for use of contract providers and alternative care settings Enhance flexibility in composition of IDT Risk sharing options for new PACE organizations Modify Part D requirements Expedite eligibility determination process Make changes to encourage larger numbers of Medicare only in PACE Other suggestions: Simplify and streamline PACE application process Exempt PACE from burdensome and inappropriate encounter reporting requirements

14 PACE Demo and Expansion Ideas Expanding eligibility for PACE to new populations Working age disabled under 55 years of age Individuals with multiple and complex chronic diseases (high costs and at risk beneficiaries) Nursing home residents

15 Suggested Activities and Considerations in Working with Your State More important than ever to track, understand and participate in state activities relating to the duals Need data and anecdotes to make your case Prepare to adapt to impending changes, whatever they may be Consider recommending PACE demonstrations to your state, particularly targeting the relocation of nursing home residents which has undeniable economic and social benefits Get organized with other PACE organizations in your state Be a resource, not an adversary!!!

16 Questions?

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