Since our last discussion on the dual eligible demonstration projects, a great deal has occurred. Here are the highlights.
The initial deadline for state applications was extended and some flexibility on launch given. This means that 28 states are now expected to participate. The deadline was May 31 and some states will not have to launch during the traditional Medicare Advantage open enrollment period in October.
The project’s progress has not been without controversy, however. Critics charge that there is a lack of transparency with the project and that the MOU process has not had stakeholder input. CMS points out that it has published the MOU template (which it plans to substantially follow) and that many states have had long and arduous processes to solicit input. CMS has further signaled its commitment to the project by arguing that if the Patient Protection and Affordable Care Act (PPACA) is struck down, these dual pilots will continue under other CMS authority.
Most states are expected to adopt the capitated approach outlined by CMS. A minority are adopting the FFS approach. With the FFS approach, states have the ability to launch their program later.
CMS is right to continue to pursue the demonstrations. Integrating Medicare and Medicaid spending and getting control over the ever-increasing costs of this population is essential if the state and federal governments are ever to slow entitlement growth. While critics throw barbs at CMS and the states over process, there are two fundamental issues that bother critics and advocates the most.
First, they argue that the demonstrations will mean cuts over time as power shifts somewhat from the federal government to states. States continue to face budgetary pressures, they note. They are right that federal entitlements like Medicare have been less impacted than state Medicaid over the past several years of budgetary crisis. But the reality is that both programs are likely to face huge reductions at the national level if something is not done to bring the cost curve down. Managing this co-morbid and complex population holds the greatest promise and will mean fewer cuts moving forward. And further, an argument might be made that the demonstrations make state cuts less likely as federal bureaucrats now would have to sign off on major changes – not just state lawmakers looking to balance budgets.
Second, critics argue that private managed care plans have little to no track record managing these populations and are at core profit-minded. Even MedPAC commissioners have raised similar issues. (The plan is to auto-assign recipients into plans, something that is not often practiced in states for such populations and only for Medicare Part D at the federal level.) While the concerns are not unwarranted, we would note the following:
- While not universally successful, Medicare Advantage Special Need Plans have been successful in offering better care than Medicare FFS.
- States need to pick plans truly committed to changing the paradigm
- CMS has begun in earnest putting in place a robust care, quality and compliance program for SNPs that will hold private plans accountable. States and CMS are likely to model regulation in the duals program after what CMS has begun for MA SNPs