Obama administration offers states new ways to improve care, lower costs for Medicaid

August 4, 2011 – States and the federal government spend more than $300 billion each year to care for Americans eligible for Medicare and Medicaid. In Medicaid, these individuals represented 15-percent of enrollees and 39-percent of all Medicaid expenditures. In Medicare, they represented 16-percent of enrollees and 27-percent of program expenditures.
 
Three new initiatives were announced by HHS on July 8 to help states improve the quality and lower the cost of care for the approximately nine million Americans who are eligible for both Medicare and Medicaid (Medicare-Medicaid enrollees).

1.  A demonstration program to test two new financial models designed to help states improve quality and share in the lower costs that result from better coordinating care for individuals enrolled in Medicare and Medicaid. The CMS Center for Medicare and Medicaid Innovation will test these models to determine whether they save money while also preserving or enhancing the quality of care for Medicare-Medicaid enrollees. CMS released a letter to state Medicaid directors to provide more detailed information to states interested in participating in the demonstration.

All states that meet standards and conditions will have the option to pursue either or both of these models.  The two models are: 

• A state,CMS, and health plan enter into a three-way contract where the managed care plan receives prospective blended payment to provide comprehensive, coordinated care.
• A state andCMSenter into an agreement by which the state would be eligible to benefit from savings resulting from managed fee for service initiatives designed to improve quality and reduce costs for both Medicare and Medicaid. 

2.  A demonstration program to help states improve the quality of care for people in nursing homes by providing these individuals with the treatment they need without having to unnecessarily go to a hospital. Starting this fall, CMS will competitively select independent organizations to partner with and implement evidence-based interventions at interested nursing facilities.   These interventions could include using nurse practitioners in nursing facilities, supporting transitions between hospitals and nursing facilities, and implementing best practices to prevent falls, pressure ulcers, urinary tract infections, or other events that lead to poor health outcomes and expensive hospitalizations. 

Additionally, this initiative supports the administration’s Partnership for Patients goal of reducing hospital readmission rates by 20-percent by the end of 2013. 

3.  A technical resource center available to all states to help them improve care for high-need high-cost beneficiaries, including those with chronic conditions and/or Medicare-Medicaid enrollees.  This resource center will provide technical assistances to states at all levels of readiness to better serve beneficiaries, improve quality and reduce costs. 
 
More information about these initiatives is available at: Medicare-Medicaid Programs.

Tags: Healthcare Reform