Overlapping Health Plans Are Double Trouble for Taxpayers
Monday, June 27, 2011
Overlapping Health Plans Are Double Trouble for Taxpayers
By: Janet Adamy, Wall Street Journal
As the U.S. wrestles with rising health expenses, one group of
patients stands out for government-paid care that is both
ultra-costly and plagued with problems.
They are the people who receive both Medicare, the program for
those 65 and older or disabled, and Medicaid, the one for the poor.
Statistics on these 9.7 million "dual eligibles" are stark.
They account for 16% of Medicare's enrollees, but 27% of its
spending. And they make up 15% of Medicaid's enrollment, but 39% of
Medicaid spending, according to the Centers for Medicare and
Medicaid Services.
Chronic diseases and heavy use of nursing homes in this older
population account for much of its outsize cost. But these aren't
the whole story. How the bills are split between the two payers
causes the federal government and the states, who share in the cost
of Medicaid, to mismanage care and waste money on inefficient
treatment, federal officials and health-care professionals say.
While it is impossible to quantify how much of the cost of dual
eligibles' care reflects this imperfect coordination between
Medicare and Medicaid, the effect is significant, according to the
consensus of many who have studied the issue.
"The programs were never designed to work together," said
Melanie Bella, who oversees the dual-eligibility issue at the
Centers for Medicare and Medicaid Services. "There's a tremendous
financial misalignment between Medicaid and Medicare," she said.
"Sometimes they're in conflict. Sometimes they just don't fit
together well."
Victor Maceyra, a quadriplegic, was living on his own in Temple,
Texas, holding down a job, when he hurt his left shoulder last year
after toppling his wheelchair. He moved into rehabilitation centers
for therapy. The shoulder got better, and he wanted to go home.
But Medicare and Medicaid couldn't agree on which one would pay
for an aide to bathe him and help him use the toilet, nor on
whether he qualified for such services at all, he says. As each
program tried pushing him to the other, Mr. Maceyra remained at a
live-in rehabilitation center for six months after his shoulder
healed, at government cost.
Federal officials and health-care professionals say it isn't
uncommon for Medicare and Medicaid to try to dump patient costs on
one another, which can raise the total cost for everyone. A recent
federal report said the dual system's incentive structure
contributes to hundreds of thousands of annual hospitalizations
that could be avoided.
Health-care officials are starting to pay attention to the issue
of dual eligibles, whose care costs about $300 billion of the
roughly $900 billion spent annually on Medicare and Medicaid.
Competing ideas have come from the administration, Republicans in
Congress and a bipartisan deficit-reduction commission.
Much of the cost is intractable because of high rates of
conditions like diabetes, cardiovascular disease, Alzheimer's and
depression among people who receive both Medicaid and Medicare.
Three in five have multiple ailments and more than two in five are
mentally impaired, a study last year by the Kaiser Family
Foundation found.
Nursing homes, an especially expensive form of health care,
drive up the cost. Among dual eligibles, 70% of the Medicaid tab is
for costly long-term care including nursing homes, according to
Kaiser.
Medicare and Medicaid, created in 1965 under Lyndon Johnson's
Great Society agenda, later ballooned as lawmakers opened them to
new classes of people and tacked on benefits. Disabled people won
Medicare coverage in 1972. Low-earning pregnant women and their
infants won Medicaid benefits in 1986. Medicare included a
prescription-drug benefit in 2003.
The federal government foots the bill for Medicare, and splits
it with states for Medicaid, picking up 57% of the tab on
average.
From the beginning, small numbers of Americans qualified for
both programs. Their numbers have grown-up 30% in a decade.
Meanwhile, the programs have added services, including overlapping
ones such as in-home health assistance.
Health officials did little to ensure the programs cooperated
well. "The best metaphor I can think of here is a dysfunctional
joint-custody arrangement," said Lisa Clemans-Cope, who researches
the issue at the Urban Institute, a social-policy think tank.
A report last year by the Medicare Payment Advisory Commission,
an independent congressional agency, concluded that a slew of
conflicting incentives between Medicare and Medicaid leads
health-care providers to avoid costs they are responsible for
rather than coordinate care.
The problem is evident in nursing homes, which can have a
financial incentive to send people back to hospitals because of
payment arrangements.
When a Medicare patient goes from a hospital to a nursing home,
Medicare pays the nursing home at an average rate of $422 a day for
100 days.
After that, if the patient is a dual eligible, the nursing home
is paid by Medicaid. It reimburses at just $172 a day, on
average.
The result is an incentive for the nursing home to send the
patient back to the hospital, because if the patient later returns,
the higher daily rate will start again.
That setup helps fuel many expensive but avoidable hospital
readmissions each year, according to research commissioned by the
Centers for Medicare and Medicaid Services.
People eligible for both programs had 958,837 hospital
admissions in 2005, the report last year said. It added that
382,846 of these, about 40%, were potentially avoidable either
because the condition might have been prevented or because it might
have been treated in a lower-level-care setting.
Avoidable hospitalizations cost government programs $3.1
billion, the report found. What the care would have cost without
hospitalization wasn't calculated, but there's little doubt it
would have been lower.
Leslie Taylor, 58, a collie breeder in Cahone, Colo., began
getting Medicare disability coverage in 1996 after multiple
sclerosis left her unable to continue her social-worker job. Four
years later, she qualified for Medicaid, too, after losing her main
income when her husband left her. Medicaid paid for a worker to
bathe, dress and assist her once she became confined to a
wheelchair.
In 2009, Ms. Taylor broke her neck when she fell trying to use
the toilet on her own. Medicare covered two surgeries to fortify
her vertebrae. But when it was time to leave the hospital, she
couldn't get a nurse to monitor her recovery at home.
Visiting-nurse agencies supported by Medicare wouldn't take her
because she already had a Medicaid worker coming into her home, and
she lived too far from them in a rural area, said Julie Reiskin, a
Denver disability advocate who helped Ms. Taylor navigate the
payment system.
Ms. Taylor's Medicaid-paid home-health-care worker wasn't a
skilled nurse. Back at home, she fell three times, contracted
pneumonia and came down with Horner's Syndrome, which causes facial
paralysis. Within two months of her spinal surgery, she was back in
the hospital five times.
"I was kind of stuck in the middle," Ms. Taylor said. "Medicare
would say, 'This isn't our job to pay for it,' and Medicaid would
say, 'This isn't our job to pay for it.'"
The Centers of Medicare and Medicaid Services declined to
comment on specific patients. CMS's Ms. Bella said, however, that
"from the perspective of a person who is entitled to both programs,
how's it actually working for them? I think finally people realize
it's not." Ms. Bella was recently assigned to try to coordinate the
two programs' service better.
A problem sometimes arises with antibiotic infusion, a form of
treatment that can last weeks. Medicare pays 80% of the cost of
in-home antibiotic infusion, while for dual eligibles, Medicaid
pays the rest, but at a lower rate.
According to Beverly Lavoie, social-work manager at George
Washington University Hospital in Washington, D.C., companies that
administer in-home antibiotics often refuse to treat dual eligibles
because of that lower rate.
The result, she says, is that dual-eligible patients needing
antibiotic infusion sometimes must stay in the hospital or go to a
nursing home for the course of treatment-both costlier options than
home care.
Mr. Maceyra, the Texas quadriplegic, has been weaving through
Medicare and Medicaid's joint-coverage system for more than two
decades, after a motorcycle accident when he was 30 left him
confined to a wheelchair.
He long was able to live alone, thanks to twice-daily
aide-worker visits covered by Medicaid. After his shoulder injury a
year ago, Mr Maceyra, who is 52, moved into rehabilitation centers.
By November, healed and determined to live on his own again and
resume his work as a paralegal, he set about restarting
personal-care home visits.
Medicaid said that function now fell under Medicare's
jurisdiction, according to Mr. Maceyra. But Medicare, he said,
insisted Medicaid should pay for it.
Medicaid eventually agreed to pick up the tab, though Mr.
Maceyra said it took months for the agency to determine that he
qualified for such service.
In the meantime, he was stuck living at an Austin rehab center
called South Congress Care and Rehabilitation, long after his
rehabilitation was over. "It's frustrating," said Mr. Maceyra.
"Nobody cared."
The rehab center said the federal-state Medicaid program paid a
little under $16,000 of the $20,000 total cost for his extra six
months of living there. Home health care during those six months
would have cost about $11,000, figures from the Texas Department of
Aging and Disability Services show.
Some outcomes for dual eligibles don't affect costs so much as
care. Craig Connors, a vice president of Riverside Health System in
Newport News, Va., says his organization and others sometimes see
medication errors because of dual sets of in-home caretakers.
Medicare pays for a skilled nurse, whose job includes
administering prescriptions. Medicaid pays an unskilled worker to
help with daily living. The unskilled worker sometimes informally
takes on responsibility for telling patients to take their
prescriptions.
But because the Medicaid aide isn't notified of prescription
changes, he or she will sometimes continue telling the patient to
take the old medication while the Medicare-paid worker is trying to
administer the new one, according to Mr. Connors. "The system isn't
set up to prevent that from happening," he said.