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Coordinating Care for California’s Dual Eligibles

[The following post was written by Emily Webb. Emily is in her second year of pursuing a Master of Public Health with a concentration in  Health Policy and Management from UC Berkeley. She is also completing an internship in Health Systems Innovation at the California Pacific Medical Center and worked with San Francisco Health Plan for 4 years prior to starting at UC Berkeley.]

California recently received a $1M grant from the federal government to better coordinate care for dual eligibles. Dual eligibles are individuals who qualify for both Medicare and Medi-Cal (also known as Medi-Medis). Medicare and Medicaid have administrative oversight of dual eligibles, yet they do not integrate service delivery. Coordinating care for this population by integrating services and improving health outcomes presents a large cost-savings opportunity for California.

In California, there are nearly 1.2 million dual eligibles. Duals in California account for 10% of the total Medi-Cal population and 25% ($8.6B) of the total state Medi-Cal budget. Similarly, 21% of the Medicare population are dual eligibles and account for 36% of Medicare spending.

Currently, 75% of California’s dual eligibles have to navigate two health systems on their own, including different coverage rules, poor care coordination, misaligned financial incentives, and lack of shared data. These issues lead to fragmented, inefficient care and high utilization of services.

Above: The division of responsibilities between Medicare and Medi-Cal.

Moving Forward at the Federal Level

ACA required the creation of the Federal Coordinated Health Care Office (or Medicare-Medicaid Coordination Office) within CMS. This office was established to improve coordination and continuity, educate beneficiaries, streamline processes, and reduce duplication and costs through integration for the dual eligible population. It fills a much-needed void within CMS and across the distinct Medicare and Medicaid programs.  The office recently awarded 15 states, including California, $1M grants to pilot interventions and provide data and feedback on lessons learned.

Moving Forward in California

In December, DHCS will release its Request for Solutions (RFS) for organizations interested in participating in demonstrations. Up to four counties will participate; at least one of which will be a two-plan model and one of which will be a county organized health system. The solutions piloted under the RFS process will primarily pursue enrollment of duals into a managed care plan. Applicants must propose solutions that include synergies between all stakeholders, including health plans, providers, community organizations and beneficiaries.

While enrollment of duals into managed care plans is central to the RFS process, the true innovation in California will be testing two distinct financial models. The first model will mimic a capitation arrangement with an arrangement between the state, selected health plan, and CMS to delegate risk, structure payments and develop implementation details as well as outcome measurements. The second model will be fee-for-service based, yet create a shared savings arrangement between the state and CMS. The details of both payment arrangements and proposed solutions are still being fully determined.

Next Steps and Action

DHCS will select demonstration sites by spring 2012 and demonstrations will begin on January 1, 2013. As the state faces increasing budget uncertainty and an increasing proportion of the total budget is spent on the Medi-Cal program, it is imperative we pursue these kinds of innovative approaches to achieve savings. Determining how to better coordinate care for duals an exciting opportunity for counties, health plans, providers and other stakeholders to improve coordination, reduce duplication and lower costs during dire economic times.

Click here for more information on the California Duals Demonstration.

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