1.1. Background and Purpose of Study
Roughly 10 million Americans are eligible for both Medicare and Medicaid (e.g., dual eligibles) and so obtain their health care under the two separate programs (MACPAC, 2016). Because Medicare is the first payer for all Medicare-covered medical and post-acute services, dual eligibles rely on Medicare for much of their acute and post-acute care services and Medicaid for services not covered by Medicare, which are primarily long-term services and supports (LTSS). With the Medicare program and individual state Medicaid programs governed by their own policies and procedures, relying on separate care delivery systems, and imposing differing financial incentives, dual eligibles with medical, behavioral, and/or LTSS needs are often served by multiple providers with few incentives for appropriate care coordination across them. This fragmentation results in unnecessary, duplicative, or missed services, raising concerns about quality of care and poor outcomes for dual eligibles and inefficiency in care delivery across Medicare and Medicaid (Polniaszek, Walsh, & Wiener, 2011; MedPAC, 2010; Grabowski, 2009; Walsh et al., 2010). The poor coordination of Medicare and Medicaid benefits have long been problems for the dual eligible population (Grabowski, 2007; Ryan & Super, 2003), and have led to frequent proposals to integrate care across the programs.
By integrating the administration, financing, and delivery of primary, acute, behavioral health, and LTSS in the Medicare and Medicaid programs, Medicare-Medicaid integrated care models offer a significant opportunity to improve care for dual eligibles and control costs for both the Medicare and Medicaid programs. Person-centered care delivery models that offer the full range of medical, behavioral health, and LTSS services in an efficient and cost-effective integration model have the potential to address the current problems associated with the lack of coordination of Medicare and Medicaid benefits, financing, and incentives. However, there have long been barriers to developing and implementing Medicare-Medicaid integration models, including issues associated with sharing of cost savings. Integrated Medicare-Medicaid models that rely on capitated care provide a way to internalize such cost savings across programs. Currently, states rely on a range of capitated models, from capitation of limited Medicaidbenefits, to capitation for comprehensive Medicaid benefits, to capitation for comprehensive Medicare and Medicaid benefits. With the authorization of the Affordable Care Act (ACA) and the commitment of federal leadership to remove longstanding obstacles to integration and promote innovative models of care between Medicare and Medicaid, there is a greater opportunity for states to make real progress on improving care for dual eligibles. According to a fall 2012 survey of the 50 states and the District of Columbia, two-thirds of states were interested in launching new initiatives to better coordinate care for dual eligibles, with most of the initiatives quite broad in scope (Walls et al., 2013).
Many of these state initiatives build upon existing state Medicaid managed care programs and Medicare managed care plans. The latter include Medicare Advantage plans that accept all Medicare beneficiaries as members and special needs plans that exclusively serve Medicare beneficiaries with chronic conditions or dual eligibles. Managed care plans, which deliver needed medical and related services under a capitated payment already have incentives to provide care in the most cost-effective way to assure service use that is necessary and appropriate, albeit only within the services included under Medicaid (for Medicaid managed care plans) and Medicare (for Medicare managed care plans). Although some managed care organizations (MCOs) may offer both Medicaid-only and Medicare-only managed care plans and may seek to coordinate Medicare and Medicaid-covered services for dual enrollees, with few exceptions, they must do so while administering each plan separately and, in particular, maintaining separate financial accounting with no co-mingling of Medicare and Medicaid funding.
This study tests the hypothesis that delivery of Medicare-funded and Medicaid-funded services to dually eligible beneficiaries aged 65 and older via fully integrated managed care plans is associated with stronger community-based service utilization patterns compared to service delivery when Medicare-funded and Medicaid-funded services are delivered independently. The hope is that integrated Medicare-Medicare managed care plans will emphasize primary care physician (PCP) visits vs. specialty physician visits, reduce preventable hospital stays and emergency department (ED) visits, and enable chronically disabled elders to obtain services at home or in "assisted living" settings in preference to long-stay nursing home use, strategies that are not easily accomplished under the fragmented delivery systems of separate Medicare and Medicaid programs.
To test the hypothesis, we compare service delivery patterns among elderly dually eligible beneficiaries enrolled in two alternative managed care service delivery systems in Minnesota: Minnesota Senior Care Plus (MSC+) and the Minnesota Senior Health Option (MSHO). MSC+ is a Medicaid-only program, while MSHO is a fully integrated Medicare-Medicaid program. With few exceptions, elderly dual eligible beneficiaries in Minnesota are required to enroll in an MSC+ managed care plan for their Medicaid-covered services or, if they choose, enroll in an MSHO managed care plan that provides both Medicare-funded and Medicaid-funded services in one program. MSC+ members are assigned a case manager who helps them with their Medicaid-funded services (largely LTSS), while MSHO members are assigned a care coordinator who helps them with all of their Medicare-funded and Medicaid-funded services. MSC+ enrollees receive their Medicare-funded services through traditional fee for service Medicare or a Medicare Advantage plan, along with a Medicare Part D prescription drug plan, and must coordinate their own Medicare services.
The study used an extensive dataset that includes beneficiary characteristics, enrollment status, and service use. In recent years Minnesota has increased the number of people served under MSHO while also reducing nursing home use.2 Analyses that shed light on how this has been accomplished and whether MSHO enrollment and reduced nursing home use are related may be useful to Centers for Medicare and Medicaid Services (CMS) as it partners with states to test various integrated care options, some as part of ACA implementation.
RTI International and its subcontractor, The Urban Institute, addressed five research questions to assess the two Minnesota managed care programs for dual eligibles to better understand who enrolls in MSHO and MSC+ and the relative effects of the two programs on service use. The research questions were:
What are the characteristics that differentiate elderly Medicare-Medicaid beneficiaries who choose to have Medicare-covered services provided through the fully integrated Medicare-Medicaid (MSHO) plans rather than through Medicare fee for service in conjunction with the MSC+ program?
What methodologies or approaches have the potential to differentiate the impact of integrated care from differences in the measured and unmeasured characteristics of those making their enrollment choice between the MSHO and MSC+ programs?
How do acute medical and LTSS use patterns differ between elderly beneficiaries in the MSHO and MSC+ programs? Do these service use patterns persist after controlling for diagnoses and disability?
How do MSHO and MSC+ service use patterns vary by demographic characteristics and level of disability?
How do dual eligibles compare with other elderly non-dual eligible Medicare beneficiaries in terms of frailty?
1.1.1. Minnesota Context
Minnesota has been a national leader in innovation in health care delivery for elderly people and adults with disabilities. The state had an early (1981) Section 1115 waiver to expand the use of home and community-based care as an alternative to nursing home care. Since that time, Minnesota has continued to move aggressively to expand the use of home and community-based services (HCBS) for both the elderly and disabled populations via Section 1115 waivers and, more recently, 1915(a) authority.
Minnesota has also used its assessment process and managed care to reduce nursing home use. The state has designed assessment tools to help "shut the back door" to unnecessary nursing home stays by assessing all Medicaid seniors to assure access to HCBS when needed. The state has also worked to "shut the front door" to such admissions by promoting access to and availability of cost-effective HCBS to reduce the prevalence of spending down to Medicaid through longer nursing home stays. The expansion of alternative service provision venues in the state, such as assisted living, may also have played a role in reducing spenddown to Medicaid eligibility by reducing long nursing home stays.
Health care and LTSS services are provided to elderly people through managed care arrangements under the MSC+ or MSHO programs. The MSC+ program, a 1915(b)(c) combination, is mandatory for elderly Medicaid enrollees who do not enroll in the MSHO program. The MSC+ program originated from the earlier MSC program in the mid-1980s under which Minnesota required elderly Medicaid beneficiaries to receive all Medicaid state plan services (except state plan personal care assistance [PCA] services) through MCOs and LTSS on a fee for service basis. PCA services were not added into managed care until the mid-1990s. From 2005-2009 the state phased in managed LTSS waiver services to create MSC+ through a 1915(b)(c) waiver authority. During this phase-in period, the state continued to have a significant number of people in the MSC program in metro areas who continued to get waiver services under fee for service. In July 2013, 11,147 dual eligibles were enrolled in MSC+ plans.
Starting in 1997, Minnesota operated MSHO under a Section 1115 Medicaid waiver of the Social Security Act and a Medicare payment demonstration waiver under Section 402 of the Social Security Act in selected areas of the state. MSHO expanded statewide in 2005. The DHS reports that under the MSHO program nearly all enrollees have annual assessments, and individualized care coordination (DHS, 2016 ). MSHO plans are at risk for nursing facility use up to 180 days, and then are reimbursed on a fee for service basis. They are also responsible for all Medicare skilled nursing facility (SNF) stays. In July 2013, 35,361 were enrolled in MSHO plans.3
The LTSS benefit and qualification for it is largely the same across the MSHO and MSC+ programs. HCBS, which is delivered under a 1915(c) waiver, provides homemaker, chore, and respite services, adult day care, transportation, assistive technologies, home modifications, and assisted living. PCA services under the elderly waiver are minimal due to Minnesota's large state plan personal care program.
The choice of health plans available to dual eligibles under the MSC+ and MSHO programs vary across the counties in the state. Under state contract requirements, these managed care plans offer different model designs, care management type and focus, and different provider networks, so consumers in counties with more than one plan have a choice of care systems.
Because of their recent successes with reducing costs under the MSHO program, Minnesota has elected to not participate fully in CMS's Financial Alignment Initiative (FAI). Over the years, the state has reduced costs to the extent where the rate setting process for integrated Medicare Medicaid Plans is not viable for the state. Instead, Minnesota's FAI demonstration is addressing a variety of administrative approaches to foster Medicare and Medicaid integration under MSHO.
Minnesota's experiences with both the MSHO and MSC+ programs are relevant to other states as they explore alternative strategies to begin to integrate Medicare and Medicaid, including under FAI. The MSC+ program provides an example of a model that relies on coordination while the MSHO program employs a fully integrated model. The analyses in this study also will be beneficial to the evaluation of CMS's FAI, providing an earlier look at key outcomes that will be examined, and potentially helping identify areas on which to focus in assessing changes in utilization.