Billions could be saved by integrating 'dual-eligibles'

States can save billions of dollars by placing the "dual-eligible" population in an integrated setting with managed care organizations responsible for coordinating all services, according to a new report written by The Lewin Group and sponsored by the Association for Community Affiliated Plans and Medicaid Health Plans of America.

The report, Increasing Use of the Capitated Model for Dual-Eligibles: Cost Savings Estimates and Public Policy Opportunities, says approximately 8 million Americans are simultaneously covered by Medicare and Medicaid. These individuals account for about 40% of the nation's Medicaid spending and about 25% of Medicare expenditures.

While demonstrations in Minnesota, Massachusetts, Wiscon-sin, Kentucky, Texas, and Arizona have served people well, most dual-eligibles remain in uncoordinated fee-for service models.

Dual-eligibles typically have multiple chronic conditions that may be best served by a coordinated approach to their health and psychosocial needs, says the report. Currently, beneficiaries are forced to navigate the Medicaid and Medicare systems separately, which is not cost-effective. Here are key findings:

• For the five-year period from 2010-2014, the potential savings are almost $50 billion.

• An additional savings of $96 billion is possible for the five-year period of 2015-2019 and another $155 billion for the five-year period from 2020-2024.

• Even small increases in integrated care can help offset what might otherwise be program cuts that reduce eligibility, covered services, or reimbursement. Each percentage point reduction over the 15-year period saves more than $70 billion dollars.

The researchers argue that states should be permitted to enroll all dual-eligibles in targeted counties into a coordinated care setting, and to share 50/50 with the federal government in the net savings that occur across the Medicare and Medicaid programs.