Increasing demand on Medicaid and Medicare to improve service quality and contain costs has the state and federal governments looking for solutions. The duals demonstration, initiated by the Medicare-Medicaid Coordination Office within CMS, is offering the promise for those solutions.
The stakes are high. Many dual eligibles have multiple chronic conditions and complex health, behavioral, and long-term services and supports needs. Many want to retain their current providers and direct their own care. States are waiting to model best practices. CMS wants to lead the way to a better service and financing system for duals. And, Congress wants to know what states and CMS will do with the flexibility and limitations of post-Accountable Care Act law. All are counting on the demonstration's frontrunners to succeed.
If California's proposal to form integrated Medicaid and Medicare plans is approved by CMS, the state could be one of those frontrunners. The design of these plans must be just right to ensure that coordinated care can improve health outcomes and prevent costly nursing home and hospital care.
Success will not be possible unless integrated plans get buy-in from their dually eligible consumers and have enough enrollees to pool risks and establish buying power.
Voluntary enrollment maximizes consumer choice. The "Request for Solutions," released by DHCS on Dec. 22, 2011, takes this option off the table. Why? Because experience from across the country shows that recruiting on a person-by-person basis is not likely to result in sufficient enrollment to make plans actuarially sound. According to the document, DHCS is considering the following two enrollment options.
Passive Enrollment With Opt Out: To get consumer buy-in, dual eligibles need options. Having the ability to switch plans or return to fee-for-service gives consumers these options. Providing them with the tools they need to make informed choices is critical. The ability to opt out could promote competition across plans. To gain consumer loyalty, plans may be encouraged to offer broad service lists, a host of consumer direction options and meaningful consumer protections.
This method may result in greater plan enrollment. Greater enrollment could help California develop appropriate capitation rates. It could also result in greater funding for plans, allowing them to build more diverse provider networks with sufficient geographic reach. Greater plan revenue may also allow plans to adequately pay care coordinators and deliver higher quality care.
Enrollment Lock-In for up to Six Months: Getting consumer buy-in up front may be hard. Because of the initial absence of plan choice, the state may need to place even greater pressure on plans to offer broad and diverse provider networks, consumer direction opportunities and consumer protections. Once the six-month requirement is lifted, competition could be generated across integrated plans, possibly raising the bar on quality and consumer choice.
Employer-sponsored insurance often limits enrollees' ability to switch plans to once per year. DHCS' proposal considers requiring consumer adherence to a plan for up to six months. Mandatory enrollment could allow for predictable enrollment counts. Predictable enrollment could allow plans to better manage risk. It could also grant plans enough buying power to develop larger and more diverse provider networks and services. This funding guarantee could attract more plans to the market and thus increase competition for state contracts. Finally, it could result in predictable state expenditures, facilitating state budgeting and the development of plan rates. Up to six months of mandatory enrollment, however, may not be long enough to ensure such predictability.
This demonstration offers the promise for solutions. The state and consumers will likely be faced with hard and possibly unwanted choices. The way in which California uses the demonstration's regulatory flexibility could determine whether all of the demonstration's objectives are achieved. Learning from California's shift of seniors and persons with disabilities into managed care is essential in designing the demonstration and in monitoring its impact on dual eligibles.