Informational Forum on Integrated Managed Long-Term Care

1. Informational Forum onIntegrated ManagedLong-Term Care December 11, 2008 Charles Milligan, JD, MPH

2. Overview • Portrait of Dual Eligibles • Portrait of Long-Term Care • Approaches to Managed Long-Term Care • New Mexico’s Approach and Background • Michigan’s Background

3. Portrait of Dual Eligibles

4. Overall, Medicare beneficiaries are generally healthy . . .

5. . . . but dual eligibles have lower incomes and more health care conditions than other Medicare beneficiaries . . .

6. …and more functional impairments than other Medicare beneficiaries.

7. On average, dual eligibles cost twice as much as other Medicare beneficiaries.

8. Dual eligibles represent 14% of Medicaid’s enrollment, yet (pre Part D) accounted for 40% of all Medicaid spending. Source: Medicare Chartbook 2005, Kaiser Family Foundation

9. Most of Medicaid’s spending on dual eligibles historically has been for long-term care services . . .

10. . . . due to the lack of an extensive Medicare nursing facility (NF) benefit, compared to other Medicare benefits.

11. A portrait of full-benefit dual eligibles in Maryland, CY 2006 . . . • By age, at the beginning of the year: • 0-49: 23.3% • 50-64: 14.4% • 65-74: 22.0% • 75-84: 24.3% • 85+: 16.1% Source: http://www.hilltopinstitute.org/publications/dualsFramework.pdf

12. . . . portrait continued . . . • By gender: • Female: 65.0% • Male: 35.0% • Ever disabled? (from Medicaid and Medicare claims): • Yes (overall): 45% • Yes, under 65: 97.3% • Yes, 65+: 13.4% • No (overall): 55% • No, under 65: 2.7% • No, 65+: 86.6% Source: http://www.hilltopinstitute.org/publications/dualsFramework.pdf

13. . . . portrait continued. • Deceased during CY? • Yes: 9.9% • No: 90.1% • Join Medicare Advantage (including SNP)? • Yes: 9.8% • No: 90.2% Source: http://www.hilltopinstitute.org/publications/dualsFramework.pdf

14. NursingFacility Dual Eligibles: Medicare serves as a clinical gateway to Medicaid MedicareBenefits MedicaidBenefits Inpatient Hospital InpatientHospital 65.4% of all nursing home admissions come from a hospital. Medicaid- Covered Outpatient Services Physician

15. Portrait of Long-Term Care

16. Medicaid and Medicare are the major third-party payers for long-term care, and out-of-pocket is high.

17. Expenditures in Medicaid long-term care continue to grow, especially for community-based services.

18. Medicaid is the largest payer for nursing home care.

19. 36% of Medicaid expenditures, or about $109 billion, goes toward long-term care . . .

20. Medicaid payments for long-term care are weighted toward the elderly and people with disabilities.

21. Approaches to Managed Long-Term Care

22. 80% 70% Medicaid as Payer 60% 50% 40% 30% 20% 10% 0% Less than 3 months 3 monthsto less than6 months 6 monthsto less than12 months 1 year toless than3 years 3 years toless than5 years 5 yearsor more Reasons for Discharge Discharged to the Community Deceased Moved to another institution The Problem, Part 1: Creating successful NF transitions to the community requires early intervention . . . Source: The National Nursing Home Survey

23. The Problem: Part 2, Perceived Medicaid Cost Shifting to Medicare • Medicare program administrators and the Medicare Advantage plans often assert that Medicaid fails to adequately pay NFs, leading to insufficient staffing, leading to avoidable hospitalizations, paid by Medicare, due to falls, pressure ulcers, and pneumonia • Medicare administrators assert that limited oversight by Medicaid agencies of HCBS providers and low payment rates for HCBS services lead to avoidable use of the ER and inpatient hospitalizations, which are paid by Medicare

24. The Problem: Part 3, Perceived Medicare Cost Shifting to Medicaid • Medicaid program administrators often assert that Medicare program administrators fail to manage hospital discharges, and fail to manage Medicare providers, leading to avoidable expenses in Medicaid due to long NF lengths of stay, and unmanaged Medicaid benefits ordered by Medicare-paid physicians • Medicaid administrators assert that overly strict Medicare utilization management inappropriately denies Medicare coverage for home health, DME, thereby leading to cost shifting to Medicaid

25. And the opportunity: A coordinated program could improve care and outcomes • Coordinate (Medicare) hospital discharge planning with (Medicaid) community-based supports and services to avoid unnecessary languishing in nursing facilities • Monitor quality of care in nursing facilities to prevent falls, pressure ulcers, and other causes of avoidable hospitalizations • Coordinate Medicare home health, physician, and Rx services with Medicaid attendant care, transportation, and HCBS waiver services for a well-designed community-based plan of care

26. The Medicare Modernization Act of 2003 (MMA) created Medicare Part D and Special Needs Plans (SNPs) • SNPs are Medicare Advantage health plans that can focus on a subset of the Medicare population. • SNPs include: • Dual Eligible • Institutional • Chronic Condition

27. Enrollment in Medicare Advantage has grown, although primarily in “Private Fee-for-Service.”

28. Medicare Advantage payments exceed traditional Medicare, and may get reduced by Congress.

29. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) imposed new duties on SNPs. • SNPs are supposed to be “special” • Dual eligible SNPs now are required to obtain contracts with state Medicaid agencies when they expand service area or enter a state • Broad potential elements of contract • All SNPs now must describe their care coordination approaches • SNP authority will sunset on December 31, 2010 – further reauthorization will depend on being “special”

30. CMS has been increasingly supportive of Medicare/Medicaid integration. August 7, 2008 Dear State Medicaid Director: The Centers for Medicare & Medicaid Services (CMS) is releasing the new Integrated Medicare and Medicaid State Plan Preprint for States that want to integrate and coordinate Medicare and Medicaid services for dual eligible beneficiaries. CMS hopes this Preprint will help facilitate States’ efforts to move toward developing integrated delivery system of care for dual eligibles. The goal of providing the full array of Medicare and Medicaid benefits through a single health plan is to improve the quality of care for dual eligible beneficiaries with better care coordination and fewer administrative burdens. The CMS contact for the State Plan Preprint for Integrated Care Programs is Ms. Gale Arden, Director, Disabled and Elderly Health Program Group, who may be reached at 410-786-6810. Sincerely, Herb B. Kuhn Deputy Administrator

31. Despite growth in SNPs, only about 12 percent of dual eligibles are in a dual eligible SNP . . . Special Needs Plans: Number of Plans and Enrollment United States, 2004 to September 2008 * Includes all types of SNPs Source: Centers for Medicare and Medicaid Services

32. Figure 1 Capitated and Integrated Program Medicare CMS SNP All Benefits State Medicaid Dual Eligible One form of connection is a capitated managed long-term care system in Medicaid. States with voluntary programs: MN, MA, NY, WI, WA, FL vehicles: 1915(a)(c); 1915(a) States with mandatory programs: TX, AZ, NM vehicles: 1915(b)(c); 1115

33. Yet voluntary and mandatory programs have major differences. • Notable advantages to a voluntary program: • Clean coordination with Medicare • Simpler CMS approval process • Fewer political barriers • Notable advantages to a mandatory program: • Scale • Elimination of selection bias/easier rate setting • May drive take-up of Medicare Advantage SNPs, and resulting opportunity for coordination and quality

34. Another form of coordination is a contractual arrangement – now encouraged by MIPPA. Coordination Agreement SNP State Medicaid Benefits • Possible elements of agreement: • Share electronic health records • Alerts on major health events • Crossover claim payment • Coordinate grievance systems • Coordination of benefits/TPL • Share marketing info Medicare Benefits Dual Eligible

35. In all reported evaluations, managed LTC programs have shown positive outcomes . . . • Minnesota’s MSHO program resulted in fewer hospital admissions and days, prevention of avoidable hospitalizations, and fewer ER visits • Wisconsin’s Family Care program resulted in shorter hospital lengths of stay • Texas’ Star Plus program resulted in shorter hospital lengths of stay, fewer ER visits, and lowered overall costs • Arizona’s program resulted in expanded access to HCBS Source: AARP Issue Brief No. 79: “Medicaid Managed Long-Term Care”

36. . . . and satisfaction has been high . . . • “Consumer satisfaction levels, based on consumer and family surveys, have been high for most Medicaid managed long-term care programs. Arizona, Minnesota, and New York programs all report high overall levels of satisfaction.” Source: AARP Issue Brief No. 79: “Medicaid Managed Long-Term Care”

37. . . . but the financial breakeven point for Medicaid often is delayed. • For dual eligibles, the early savings often accrue to Medicare, in avoided hospital costs • Medicaid costs are immediate, through managed care plan costs • Medicaid savings come later, through NF-to-HCBS rebalancing

38. New Mexico’s Approachand Background

39. New Mexico’s goals in its “Coordination of Long-Term Services” (COLTS) program • Promote community-based services by diverting potential NF admissions and shortening NF lengths of stay • Promote flexible benefit design to achieve new models for community-based services • Improve quality through coordination of Medicare and Medicaid • Achieve financial savings by aligning Medicare and Medicaid incentives

40. New Mexico’s Model • Mandatory program (in Medicaid) using a 1915(b)(c) combination waiver • Populations: • All people who meet nursing facility level of care • All dual eligibles • Contracted Medicaid managed care organizations must also be statewide SNPs

41. New Mexico incorporated concepts of self-direction. • A separate program was designed at the same time: “Mi Via,” which is a Cash & Counseling HCBS waiver • Individuals who qualify and receive a slot may opt out of COLTS into Mi Via • Within COLTS, the managed care organizations must honor self-direction of personal care services

42. Covered Services Long-Term Care Nursing facility Waiver services Home Health Care Personal Care Acute Care Services Inpatient hospital Outpatient hospital Pharmacy Physician Transportation Dental Excluded Services Behavioral health Indian Health Services and Tribal 638 services to Native American Members (special discussion) COLTS covered services (and service carve-outs)

43. Prior to COLTS, New Mexico already emphasized community-based care . . . Medicaid Member Months (MMs) in Institutional Care and Community-Based Care in New Mexico, for People Meeting Nursing Facility Level of Care, SFY 2006

44. . . . and dollars. Source: Burwell and Eiken, “Distribution of Medicaid Long-Term Care Dollars, FFY 2007”

45. Yet New Mexico expects COLTS to promote further rebalancing . . . NF Transition Goals for COLTS in Year 1 (SFY 2009)

46. . . . projected to result in nearly 75% of all member months in the community for people meeting NF level of care Projected Medicaid Member Months (MMs) in Institutional Care and Community-Based Care in New Mexico, SFY 2009

47. Michigan’s Background

48. Compared to the national average, Michigan has more capacity in assisted living, and less in personal care Michigan US Assisted living and residential care beds/1,000 65+ 38 26 Nursing facility beds/1,000 65+ 38 47 Nursing facility residents/1,000 65+ 33 40 Nursing facility occupancy rate 88% 85% Personal care and home care aides/1,000 65+ 9 15 Home health aides/1,000 65+ 21 18 Source: AARP, “Across the States 2006: Profiles of Long-Term Care and Independent Living”

49. In Michigan, Medicaid covers 64% of all NF residents, and Medicare and Medicaid combine to cover 81% Distribution of Certified Nursing Facility Residents by Primary Payer Source, 2007 Source: Kaiser Family Foundation, statehealthfacts.org, 2007 data

50. Michigan is above average in HCBS participants per 1,000 population . . . Michigan Medicaid HCBS Participants, by Program, 2004 Source: pascenter.org/state_based_stats/medicaid_hcbs.php?title=Medicaid%20HCBS%20Data&state=michigan