Group Calls for Dual-Eligible Claims Reimbursement Changes

September 27, 2016 - In a recent report, the Bipartisan Policy Center’s Health Project has urged federal officials to improve care delivery for dually eligible Medicaid and Medicare beneficiaries by revising claims reimbursement models to better align with the population’s needs, establishing an agency to manage payment models that serve dual-eligible beneficiaries, and permanently authorizing Medicare Advantage Dual-Eligible Special Needs Plans.

The non-profit organization explains that existing claims reimbursement structures fail to appropriately address the population’s unique challenges with receiving comprehensive care and the models do not pay providers for the all the services needed for complex care.

“Although many plans and providers understand how best to treat patients with chronic conditions, the current reimbursement structures under Medicare and Medicaid create barriers to the integration of services,” states the report. “While new delivery models are being tested through CMMI [Center for Medicare & Medicaid Innovation], the removal of reimbursement barriers would help accelerate the spread and scale of successful delivery models.”

New payment models need to address the challenges of treating high-risk dual-eligible beneficiaries, the Bipartisan Policy Center contends. Using Medicare and Medicaid claims and administrative data from 2011, researchers reported that risk scores for full-benefit dual-eligible beneficiaries are 50 percent higher than the average scores for all other Medicare beneficiaries.

The full-benefit dual-eligible population also has an average of six chronic conditions, whereas all other Medicare populations average four. As a result, the group has higher rates of hospitalizations and readmissions for many chronic conditions, including hypertension, congestive heart failure, and chronic obstructive pulmonary disease. Researchers noted that many of these hospitalizations are preventable.

Consequently, federal healthcare spending on dual-eligible beneficiaries was more than twice as high as average annual Medicare spending for all other beneficiaries in 2011.

To better align claims reimbursement models with dual-eligible beneficiary needs, the Bipartisan Policy Center advises CMS to modify ongoing demonstrations targeting the population, such as the Financial Alignment Initiative and Program for All-Inclusive Care for the Elderly (PACE).

The organization recommends that the federal agency change the Financial Alignment Initiative, a three-year demonstration launched in 2011 to reduce costs and enhance quality of care for dual-eligible beneficiaries. The reimbursement rates should account for infrastructure investments and cost variations with serving special-needs populations.

Researchers show that projected healthcare savings under the model may be unrealistic because they do not account for initial investments needed to serve a high-cost population and it could take years to recoup the investments because of such low reimbursement rates through the initiative.

CMS should also align overlapping coverage standards for dual-eligible beneficiaries in the Financial Alignment Initiative, such as durable medical equipment and home health services, the report advises. Some providers are confused as to whether Medicare or Medicaid standards apply to coverage. For example, Medicare limits rehabilitation and physical therapy services based on manual claims reviews and homebound requirements, but Medicaid offers more comprehensive coverage.

In addition to the rate and coverage changes, the organization suggests that CMS partner with states to develop state-specific quality and access measures and develop shared savings agreements for high-performing states. Although, program adjustments should not boost federal healthcare spending.

The Bipartisan Policy Center also recommends changes to PACE, a provider-based model that integrates care for dual-eligible patients aged 55 or older with nursing home needs. While providers are paid an adjusted capitated rate each month, the reimbursement does not account for necessary services and items that are not covered, including behavioral health and investment costs.

To resolve reimbursement issues, the organization suggests that CMS expand eligibility requirements and remove the limitation on enrolling beneficiaries in PACE at the start of the month. Beneficiaries should also have the options to enroll in PACE without adult day services and receive limited long-term services and support that is less than the full-range of Medicaid-covered services.

Additionally, the Bipartisan Policy Center calls on policymakers to develop a regulatory authority that focuses on claims reimbursement models for dual-eligible beneficiaries, such as the Medicare-Medicaid Coordination Office (MMCO). Unlike the MMCO, though, the agency would have the authority to make final financial decisions about changes to dual-eligible-specific programs.

“Consolidating this authority will help ensure that decisions affecting these programs are made through the lens of an integrated program that takes into account the impact on beneficiaries and state implementation,” states the report.

The proposed agency would manage Special Needs plans, PACE, and demonstrations affecting the dual-eligible population as well as possess contract authority. The new authority would allow the agency to develop a model contract for reimbursing providers for treating the medically complex group that is similar to the three-payer approach (CMS, states, and health plans) of the Financial Alignment Initiative.

For two-sided risk contracts, the organization recommends that the model contract allow providers to offer high-need patients any items or services that are “reasonably related to optimizing health or functional status, provided the item or service is part of a care plan developed by the patient’s interdisciplinary care team.”

The Bipartisan Policy Center also urges the Department of Health and Human Services (HHS) to permanently authorize Medicare Advantage Special Needs plans for dually eligible beneficiaries. The plans are designed to promote better care coordination between the Medicare and Medicaid programs by permitting plans to offer both program’s and supplemental benefits through a single plan and one set of providers.

However, most of the existing dual-eligible-specific special needs plans do not cover the full array of Medicaid benefits, such as behavioral healthcare and long-term care services. The coverage gaps can make it more challenging to integrate and coordinate care for medically complex patients, the report notes.

The organization advises HHS to expand Medicare Advantage Special Needs plans for dually eligible beneficiaries to include coverage for fully integrated clinical, behavioral, and long-term care services by Jan. 1, 2020.

“The recommendations made in this report are designed to address these legal and policy barriers and improve the coordination of services and reimbursement in current payment models that integrate the Medicare and Medicaid programs,” the report concludes. “[F]ailure to address these barriers will make it difficult, if not impossible, for plans and providers to implement successful care models for high-need populations.”

Dig Deeper:

• Understanding the Value-Bases Reimbursement Model Landscape

• Care Coordination Improves Outcomes for Dual Eligible Patients