Not Losing Sight of the Dual Eligible in the Move to Value Based Payments

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September 1st, 2016

Not Losing Sight of the Dual Eligible in the Move to Value Based Payments

Value-based payments arrangements are increasing. While most of this movement is being driven through Medicare-based payment initiatives, CMS is now increasingly pushing value-based payments in Medicaid based on the success CMS has achieved in Medicare. The shift to value-based payments is being driven both at the federal level through 1115 waivers, as well as at the state level through managed care contracts.

However, despite parallel movement to value-based payments, the segment of the population that is served by both Medicaid and Medicare is at risk of falling behind the value-based payment curve.  According to Medicare Health Plans, there are currently over 10 million “dual eligibles” – individuals are who are enrolled in both Medicaid and Medicare. Some of these individuals qualify for full dual eligible coverage, while other qualify for partial dual eligible coverage (for more information see “what does it means to be dual eligible and how does someone qualify”).

Many efforts have been made over the years to improve services and coordinate care for this high-risk, high-cost population. Some states offer dual eligible special needs plans (D-SNP) that are specially designed to coordinate the care of dual eligible enrollees by providing access to a network of providers who specialize in treating a specific condition such chronic heart failure, diabetes, dementia, or End-Stage Renal Disease. Most states also offer Programs of All-Inclusive Care for the Elderly (PACE). Similar to D-SNPs, PACE plans deliver medical and social services to frail and elderly individuals through a health home model.

However, one of the biggest challenges to coordinating care for dual eligibles is working through the logistical and financial issues of coordinating payments from both Medicare and Medicaid. To address this challenge, CMS began testing models with states to achieve better financial alignment. Ten states are participating in a capitated financial alignment model, two states are participating in a managed fee for service model, and one state (Minnesota) is participating in an alternative model that focuses more on administrative alignment.

States Participating in the CMS Medicare and Medicaid Financial Alignment Initiative

CMS Medicare

CMS is currently evaluating these demonstrations and early results indicate that successes have been achieved, but also reveal some serious challenges in terms of system redesign, training, and resource commitments.

As both Medicaid and Medicare programs continue to move toward value-based payments, figuring out the payment component for the dual eligible population will be critical to ensure that payers and provider providing care to these populations can fully benefit from Medicare and Medicaid value-base payment arrangements made available to them.

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