CMS Study Evaluates Utilization among Dual Eligibles

In August, the Centers for Medicare & Medicaid (CMS) released a study titled Effect of Long-term Care Use on Medicare and Medicaid Expenditures for dual Eligible and Non-dual Eligible Elderly Beneficiaries.  Among other things, the study evaluated differences in case mix and expenditures of dual and non-dual beneficiaries in the community setting receiving Medicaid long-term care (LTC) and medical services, and compared institutional and community expenditures for LTC. 

Study Focus

While recognizing dual eligibles as “a heterogeneous group,” the study focused on utilization of services for older people enrolled in fee-for service (FFS) Medicaid and Medicare.  Specifically, the study sought to analyze the role of case-mix and long-term care setting in determining medical and LTC costs for dual eligibles.  Medicaid medical expenditures included ambulatory care, hospice care, inpatient care stays, labs/x-rays/rehabilitation, physical therapy/occupational therapy/speech-language pathology therapy, and primary care case management.  Medicaid LTC costs included home health services, intermediate care facility services, personal care services, state plan payments towards nursing facility services, targeted case management, and transportation.

Case Mix

The study compared the characteristics of duals versus non-duals across the seven states that were part of the study.  131,000 were duals using Medicaid LTC services in a community setting, while 7,100 were non-duals using Medicaid only services in a community setting.  The average Chronic Disease and Disability Payment System (CDPS) case mix score, while 3.95 for the Medicaid community group, was 6.33 for the duals community group.  The mean number of diseases was also higher among the duals community group, at 5.11 compared to 3.63 of the Medicaid Community group.  For complete characteristics of the various dual and non-dual groups, see Exhibit 1 on page E6-E7, here. 

Expenditures

Average total medical and LTC expenditures per beneficiary per year was significantly greater in the duals community group ($85,000) compared to the Medicaid community group ($19,500).  The bulk of total expenditures for the duals community group came from Medicare medical expenditures ($76,000), while the primary expenditure of the Medicaid community group was Medicaid LTC costs ($13,000).  The Medicaid community group had greater expenditures in both total Medicaid costs ($19,000 vs. $9,000) and total LTC costs ($13,000 vs. $8,400).  For the full data on expenditures, see Exhibit 2 on page E-8, here. 

Community LTC Costs Lower

The study further confirmed Council analysis that community costs for long term care are significantly lower than institutional LTC costs.  In the seven states analyzed in the survey, all seven (Arkansas, Florida, Minnesota, New Mexico, Texas, Vermont, Washington) had lower per beneficiary mean Medicaid expenditures (and mean Medicare expenditures) for community LTC recipients versus institutional LTC recipients.  Most states experienced at least half of the per beneficiary mean Medicaid expenditures for community LTC recipients than institutional LTC recipients.  For these statistics, see Exhibit 5 on page E-10, here.

The National Council on Medicaid Home Care’ Take

This study confirmed previous Council’s analysis that: 1) the duals population is more medically complex than the non-duals population; 2) duals account for greater overall expenditures than non-duals; and 3) community-based LTC is more economical than institution-based LTC.  Home care providers should note that this study had several limitations, as it 1) focuses on only a portion of the dual eligible population (the elderly); and 2) only addresses FFS beneficiaries and not the growing number of managed care dual eligible beneficiaries.  To see the Council’s briefs addressing dual eligibles, as well as managed care, click here.

Home care providers are encouraged to continue to advocate for reforms in the dual eligible demonstrations, to keep abreast of developments on CMS’ website, and the contact the Council with any questions or concerns.

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