Minnesota, having tackled some problems of the acute-care system, is trying its hand at reforming long-term care.
The state plans to pilot a program by late summer, merging Medicaid and Medicare payment for acute and long-term care into one capitated rate. Initially, the Long-Term Care Options Project is expected to involve 4,000 of the 55,000 Minnesotans eligible for both Medicaid and Medicare, said Pamela Parker, its director.
Minnesota has applied to the federal government for a waiver to conduct the project.
In another effort, two Minnesota healthcare associations have charged a task force with crafting new state health reform legislation. This plan, unlike earlier state reforms, including a subsidized insurance program for the poor, would roll acute and long-term care into a single system.
The Minnesota Long-Term Care Options Project is meant to simplify the delivery of care. Now the state pays HMOs a capitated rate to cover much of its Medicaid population, but long-term care and Medicare benefits are reimbursed fee-for-service.
"The Medicare and Medicaid programs are at cross purposes in terms of incentives and administrative requirements," Parker said. For example, physicians receive little pay to see patients at nursing homes, so patients are transported to hospitals instead for costly visits, she said.
"What would it be like if there was a seamless system between Medicare and Medicaid, and you could just do what you thought was necessary?" Parker asked.
Elderly people represent 12% of Medicaid beneficiaries in Minnesota but about 37% of its costs. Medicaid spending is expected to reach $3 billion in Minnesota this year.
A task force created to develop legislation for 1997 has met once and is set to meet again this month. It is sponsored by the Minnesota Hospital and Healthcare Partnership and the Minnesota Health and Housing Alliance.
"Reform has been driven largely by managed-care plans or physician-hospital groups, and long-term care has not been part of the plan," said Mick Finn, senior vice president of the Health and Housing Alliance. "But long-term care is a dimension worthy of consideration that has expensive connections to the acute-care world."