Frizzera said the demonstration projects will be a major improvement over the way duals are now handled because they will get more coordinated care. That should cut expenses for long-term care, one of the largest cost-drivers for duals. She noted that nearly half of California's annual spending on duals—$2.5 billion—is just on long-term care facilities.
Under the initiative, states can follow one of two models: either a single, capped payment or managed fee-for-service. The managed fee-for-service model uses a gain-sharing agreement between the state and the CMS where the state shares in the savings when initiatives that improve quality also reduces costs.
No data yet exists on whether the programs have delivered what they have promised since they are still in the beginning stages. In November, one month after it became the first state to get CMS approval, Massachusetts named six health plans to take part in the program as integrated-care organizations: Blue Cross and Blue Shield of Massachusetts HMO, Boston Medical Center HealthNet Plan, Commonwealth Care Alliance, Fallon Total Care, Neighborhood Health Plan and Network Health.
Enrollment will start July 1.
The Massachusetts demonstration is using the capped payment model. It is based on two existing state programs: Programs of All-Inclusive Care for the Elderly and Senior Care Options. The state pays a team of providers in both plans a flat fee up front for the care of beneficiaries. If the care ends up being less than that fee, the providers share in the savings. If not, they must contribute to the extra costs.
“I think that there's promise here,” said Bonnie Washington, a senior vice president at Washington, D.C.-based consulting firm Avalere Health and the former head of the CMS' legislation office. Because the dual-eligible population is often characterized by frequent hospital readmissions and lingering clinical issues, “they can benefit from more active care coordination.”
Despite that promise, some people are concerned that the demonstration programs are moving too quickly and enrolling too many people before any results are known. “There are some real opportunities to improve the system,” said Kevin Prindiville, deputy director of the National Senior Citizens Law Center. “We're not moving in a way to test elements that are working, but just making wholesale changes. I'd like to see it on a smaller scale first, to prove that it works.”
The advocacy group is calling for increased regulation of the programs and an ombudsman to provide oversight. Prindiville also wants more transparency so it's apparent where savings come from and where they go.
While treating dual-eligibles under a single contract is a new concept for carriers, Washington said insurers' background in Medicaid and Medicare Advantage makes them well prepared. But whether they will be successful in doing so and save money in the process remains to be seen, she said.
Although a state financial alignment initiative has yet to begin enrollment, Frizzera said she believes the program will succeed and become a model for treating dual-eligibles.
“I don't know any other way to manage this population in a coordinated fashion,” she said. “Once (enrollees) get educated and see the benefits of these programs, then you will see advocates being more supportive.”
Follow Jonathan Block on Twitter: @MHjblock
