Fully Integrating Medicaid, Medicare Benefits May Not Reduce Spending

Plans designed specifically for disabled dual-eligible Medicare and Medicaid beneficiaries are not necessarily enough to reduce use of costly services, according to a new report from the Government Accountability Office (GAO).

In 2009, Medicare and Medicaid spent $103 billion on individuals who are disabled, under age 65, and qualify for both Medicare and Medicaid, according to the GAO report. Dual-eligible beneficiaries accounted for less than one-fifth of each program’s population, but one-third of each program’s spending.

Even though states with high Medicaid spending often had lower Medicare spending, they nearly always had greater overall spending for beneficiaries, the investigators found.

While both disabled and aged dual-eligible beneficiaries had moderately better health outcomes performance, dual-eligible special needs plans (D-SNPs) actually had similar levels of costly Medicare-covered services, like readmissions and emergency room visits.

“…D-SNPs’ moderately better performance on health outcome measures did not translate into lower utilization levels of costly Medicare services for either all disabled dual-eligible beneficiaries or those with 6 or more chronic conditions,” the authors wrote.

Those in D-SNPs did have slightly higher levels of emergency room use. As the number of chronic and mental health conditions increased, so did the average number of emergency room visits, inpatient stays, and readmissions, according to the report.

The authors found that beneficiaries with high Medicare expenditures were more likely than those with high Medicaid expenditures to have multiple chronic or mental health conditions. Roughly a third of beneficiaries that fell into the former category had 6 or more chronic conditions compared with 14% of the latter. Plus, a quarter of beneficiaries with high Medicare expenditures had 3 or more mental health conditions compared with 13% of the Medicaid equivalents.

“Whether CMS and participating states will be able to improve quality without increasing overall program spending for disabled dual-eligible beneficiaries is uncertain,” the authors concluded.