Massachusetts is preparing to ask HCFA's permission to combine funding and programs for the 109,000 elderly people in the state who are dually eligible for Medicare and Medicaid.
The request for a waiver from Medicaid rules, expected to be filed within several months, is the first statewide assault on the administrative and cost problems involving the so-called "dually eligible" population, which numbered 6 million nationwide in 1995, according to HCFA.
State officials are seeking to gain control of the costliest segment of the Medicaid population while coordinating the care of frail and poor people, who now are passed back and forth between the two programs according to changes in their health and quirks of eligibility for certain services.
Massachusetts will be followed in close order by five other New England states. All six states this month filed a "framework" with HCFA detailing fundamental features that all the states will use in developing programs tailored to local conditions.
Medicare and Medicaid were developed separately and meant for different populations, said Kate Willrich, who will direct the new program in Massachusetts.
But the incidence of Medicare beneficiaries becoming eligible for Medicaid in Massachusetts has exploded, driving costs up (See box).
The average recipient on Aid to Families with Dependent Children, a principal qualifier for Medicaid in Massachusetts, cost the state program $1,600 a year. In contrast, the average annual cost for dually eligible elderly beneficiaries was $14,000.
The state's proposal would tackle that cost problem by paying a new type of provider network, called a senior-care organization, to coordinate the full range of medical, nursing and community-based care available without having to deal with bureaucratic limits on certain options and their reimbursement, Willrich said. Enrollment would be voluntary.
Medicaid generally pays for nursing home care, but only if a recipient first spends enough savings on long-term care to be declared poor enough for reimbursement, Willrich said. The cost of care shifts to Medicare if a nursing home resident's health problem can qualify as an acute condition that requires hospitalization.
But preventive measures and routine help around the house could keep elderly people from being forced into nursing homes or from slipping into frail health unnecessarily, Willrich said. Those services have to be sought by beneficiaries on their own through the bureaucratic maze. Often they aren't reimbursed because they're not considered medical expenses, she said.
About 35% of the state's dually eligible recipients are in nursing homes, and their average yearly expense to Medicaid is $30,000. Another 5% are certified as eligible for a nursing home but are being cared for in the community for an average of $15,000 a year, Willrich said. That means the state can cut per-person costs of care in half by keeping frail elderly people in the community longer, she said.