AHIP Medicare, Medicaid, and Dual Eligibles 2013 Conference

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The American Journal of Accountable Care, December 2013, Volume 1, Issue 1

The Medicare, Medicaid, and Dual Eligibles programs are on the verge of a significant transition under the Affordable Care Act. Coordinating care and improving population health outcomes will require these federal programs to move away from outdated fee-for-service models to ones that incent better quality and more cost-effective delivery methods. At America's Health Insurance Plans (AHIP) Medicare, Medicaid, and Dual Eligibles conference held on September 23-26 in Washington, DC, the sessions featured discussions that highlighted the role health insurance plans will play as these federal programs continue to evolve under healthcare reform.


One might question what sustainable Medicare would look like. Historically, those who received health insurance were covered either by a private employer, or were eligible for coverage under the Medicare and Medicaid programs. Individuals who lacked access to either option fell in a gap. This disparity necessitated the implementation of the Affordable Care Act (ACA), a reform effort which intends to expand Medicaid to include more beneficiaries, and will subsidize private insurance for many others who currently remain uninsured. Yet, the health law remains a highly contested topic in Washington, especially along political party lines. Alice M. Rivlin, co-chair, Bipartisan Policy Center’s Domenici-Rivlin Task Force, and interim director of Brookings’ Engelberg Center for Health Care Reform, provided insight as to what elements are needed to refocus federal energies where they need to be. “It really is a very strange time to be here; the most extreme partisan politics in my memory, and I’m afraid the most broken that I’ve seen our democratic process,” Ms Rivlin said. “Healthcare and health insurance are caught right in the middle of this dysfunctional situation.”

Ms Rivlin noted that despite the healthcare “fix” being complex, it must be addressed in a diplomatic and urgent way. Healthcare reform has been long overdue. “All this seems to be happening when the whole world is looking to us for stability,” said Ms Riviln. “The network’s broken; we ought to be able to work together across party divisions to make essential services of government work.” Encouraging better-quality, higher-value healthcare as well as supporting the sustainability of the Medicare program in the long term will require a more neutral view of healthcare across party lines. Establishing accountable care organizations (ACOs), Medicare Networks (MNs), and transforming or replacing the Cadillac Tax are just some of the suggestions Ms Rivlin offered. MNs are of special interest, because unlike ACOs, they are enrollment based. Nevertheless, both models provide incentives that would help drive quality based on care guidelines and benchmarks. To control spending, reform efforts must be focused on shifting Medicare from fee-for-service to a premium support program where the government would cap its contribution at a reasonable sustainable growth rate (SGR). Medicare plays a central role in health policy, including the total spending of healthcare, as well as contributing largely to the national debt. However, whether through public or private health plans, there is an opportunity to transform the federal program and increase the efficiency of care delivery. Restructuring Medicare would slow the growth of current total healthcare spending at a national level, while reducing the potential growth of future debt.

Marilyn Tavenner, administrator, Centers for Medicare & Medicaid Services (CMS), also had much to say in regard to how the Medicare program might operate in 2014 and beyond. Of course, there is the “3-legged stool” of Medicare’s strategic plan: access, cost, and quality. Familiar terms, but what do they really mean? Cost containment comes from a myriad of paths, but aligning incentives and strategy starts with sharing data. Ms Tavenner suggests that CMS still has a way to go in this emerging area. Reforming existing health systems provides an opportunity for such growth and improvement. “We need to get more value for the dollars we spend,” Ms Tavenner said. In fact, addressing quality and innovation on the front end saves a lot of rework on the back end. As she spoke to the medical professionals and other attendees, Ms Tavenner said she was excited and looking forward to the opening of the health insurance marketplaces in October. CMS has been actively working with the private sector to ensure that the quality of healthcare matches the costs that are being incurred to deliver it. “We’re all going to make a difference, and it’s going to take us a while to get there. What we’re seeing is more transparency, more data, and individuals asking a lot of questions—and for me, that’s what it’s all about.”

Medicare Advantage Plans


Dr Katherine Baicker, professor of health economics, Department of Health Policy and Management, Harvard School of Public Health, says that the 2 main goals of healthcare reform are covering the uninsured and slowing spending growth. She says while it

is easy enough to cut funding in order to slow spending growth, it does little to drive value—quality care costs a significant amount of money. At the same rate, there are parts of the country where we are spending the most, yet patients are not receiving the best quality care because of fee-for-service models. Spending is wasted, and is only exasperated by a failure to coordinate care. Proton beam therapy is a strong example of expensive care that is being used even when its outcomes have no better proven outcomes than other less expensive therapies. Dr Baicker argues that as long as Medicare keeps reimbursing these types of costly treatments, providers will continue to keep using them under the fee-for-service model. “It would be nice to say, ‘Well, save Medicare’s problem by eliminating fraud and abuse and cut out care that had no outcomes,’” said Dr Baicker. Aligning cost sharing with value will require more incentives, like bundled payments and shared savings, as well as integrated plans like ACOs and value- based insurance design. Put simply, Medicare and other public programs cannot cover all care for all people with public money under current reimbursement models.

Paul B. Ginsburg, PhD, president, Center for Studying Health System Change, echoed Dr Baicker’s comments, saying that there are diverse forces affecting the Medicare Advantage (MA) business. Medicare Advantage plans are offered through private companies that contract with Medicare to provide patients with all their Part A and Part B benefits. Dr Ginsburg says there are opportunities for enrollment growth in MA plans due to both the retirement of baby boomers and private exchanges for retirees. There are also many challenges, including potential policy changes that would affect MA plans more than traditional Medicare plans. Long-term success of the MA program requires care delivery innovation, tailored benefits for consumers, and collaborative provider partnerships. Dr Ginsburg also suggests that benefits should be more individualized, and selective about who would be entitled to coverage.

Dual Eligibles

With nearly 10 million beneficiaries who are eligible for both Medicare and Medicaid, guaranteeing access to high-quality, costeffective healthcare is imperative. According to Melanie Bella, director, Medicare-Medicaid Coordination Office, Centers for

Medicare & Medicaid Services, CMS is pursuing multiple initiatives to streamline care. Those initiatives include an Integrated Resource Center which would showcase best practices for states, initiatives to reduce unnecessary hospitalizations, and resource centers that would provide assistance to state Medicaid and Medicare agencies in sharing data. Each opportunity presents unique offerings to better coordinate care. CMS-sponsored demonstration projects, including a capitated model and a managed fee-for- service model, aim to integrate primary care, acute care, long-term services, and other important benefits for dual eligibles. These demonstrations integrate the full spectrum of Medicaid and Medicare services, in addition to ensuring beneficiaries have access to all the care they are entitled to under both programs.

As with other reform initiatives, being person-centered is crucial. Ms Bella says that simple changes, such as issuing a single insurance card to patients, could help promote coordination and continuity of care. “We are very focused on data, which may not sound like a direct benefit to beneficiaries, but getting Medicare data linked with Medicaid data and into the hands of care managers allows us to foster coordination and access for beneficiaries,” Ms Bella told The American Journal of Managed Care during the event.


Controlling costs is a major issue for all state governors, especially as healthcare exponentially outpaces spending in other key areas such as K-12 education. Dan Crippen, executive director, National Governors Association (NGA), discussed the issues from the governors’ perspectives, especially as they pertained to the ACA implementation and Medicaid program priorities in the states. Mr Crippen said that the elderly account for 26% of Medicaid spending, even though they are only 9% of the population.Disabled beneficiaries account for 43% of Medicaid expenditures, while they represent a mere 16% of Medicaid population. These figures show that spending is just not being utilized effectively. As well, many of these higher costs of care could be preventable. Mr Crippen relayed the example of a Medicaid patient with diabetes who was showing stable blood glucose levels at the beginning of the month, and spiked glucose levels toward the end of the month. Upon investigation into the patient’s medication adherence, it was discovered that the patient did not own a refrigerator and the insulin was losing efficacy due to improper storing. In another case, the patient was frequently having severe asthma attacks because they did not have an air conditioning unit in their home. While these issues are easily resolvable with the purchase of a small refrigerator and AC window unit, there are no payment systems in place to finance non-medical items like these for patients. Small preventive measures would help patients better manage their care, but policy change at this level can be difficult despite being much needed. Mr Crippen quipped, “Don’t wait for Washington, do what you can from home.”

Additionally, less than 3% of funding is spent on public health, including that for clean water and vaccinations. Yet, this underfunded area is not the first place where most governors look for solutions in promoting preventive care and controlling higher costs. Mr Crippen says the governors and states are working diligently to reform along all levels of Medicaid by identifying roadblocks that exist. It is critical to control the “super-utilizers” of Medicaid services. Super-utilizers average nearly $4000 in monthly health costs, as well as average 2.6 hospital admissions, 7 emergency department visits, 10 primary care visits, and 20 specialist visits per year. While slower that hoped, Medicaid expansion is happening, and with the governors’ help, many of the barriers to realizing a more effective care delivery model will be addressed. Mr Crippen hopes that although only 29 states have chosen to expand Medicaid eligibility, eventually more states will implement expansion programs as they experience the first few months of the ACA.

Jocelyn A. Guyer, director, Manatt Health Solutions, said that outreach will be critical in educating patients about the ACA. Four out of 10 people are still uncertain if the ACA is actually an enacted law. Lack of specific funding for ACA outreach has left many consumers ill-informed about what the ACA encompasses, despite patient education being an “important piece of the puzzle.” There are some initiatives in place that are working to remediate the situation. The non-profit organization Enroll America, for instance, is addressing the “enrollment gap” by ensuring that they assist as many uninsured Americans as possible in making responsible choices when choosing a health plan. As the future of care calls for collaboration and a more person-centered focus, having patients make educated decisions is important. Small efforts such as disseminating in-depth information about how and where to enroll for coverage is just 1 way to close the “enrollment gap.” The exchange navigator program, which provides assistance to the uninsured in obtaining health plans on the marketplace, is also essential. But this is not enough. Ms Guyer says the states need to be more formally involved with reform by stepping forward and changing the business-as-usual attitudes. Getting insurance to those who need it most will require collaboration between the federally facilitated marketplaces (FFMs) and State Partnership Marketplaces (SPMs).

“Details aren’t important things, the basic message across the health policy spectrum is we’ve got to move toward more collaborative care, more reward for value, and outcomes have to incent beneficiary and providers,” added Chuck Milligan, deputy secretary, health care financing, Maryland Department of Health and Mental Hygiene. “Nothing is easy about it, but we can do better.” MNs and ACOs are a start toward bringing groups together to collaborate on care and share savings, but the overall process of reforming the Medicaid landscape is going to be a slow and arduous process. Regardless of the time it takes, the changes are long overdue. The first necessary strides toward ensuring better-valued care in the United States are being made.


Reform brings challenges and questions, but more importantly, it brings promises and opportunities. Quality, value, and cost-effective healthcare delivery in the Medicare, Medicaid, and Dual Eligibles programs will require a communal effort between the healthcare industry and federal entities. Continued support and collaboration will be essential to supporting models that drive consumer knowledge while incentivizing providers to administer greater value-based care.Author Disclosure: The author reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

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