Dually Eligible People With Medicare and Medicaid

“The Elderly and Disabled Poor”

Sheldon Hersh, MDNew Orleans, Louisiana

© 2003 National Coalition for Dually Eligible People

2

Table of Contents

1. Dually Eligible People2. Second-Class Medicare3. The Nursing Home Burden4. Possible Solutions5. Geriatrics — An Ailing Specialty6. The Past, Present, and Future

3

Section 1.

Dually Eligible People

4

Dually Eligible People Have Both Medicare and Medicaid They have Medicare because they

worked, paid taxes, and earned their Medicare when they become elderly or disabled.

They have Medicaid because they are still so poor that they qualify for their state’s Medicaid program for the needy.

5

Dually Eligible People with Medicare and Medicaid Are: “The elderly and disabled poor” – Senator

Breaux

Six million of the oldest, poorest, sickest, and most disabled people in the nation

Disproportionately elderly, women, minorities, and mentally or physically disabled people

The fastest-growing and most expensive Medicare population

6

Dually Eligible People Are Vulnerable and Poor An older, female population with a large

percentage of minorities 80% < $10,000/yr, 20% < $5,000/yr 28% under 65 y.o. – the “non-elderly disabled” Live alone, have fewer educational skills,

poorer vision and hearing Generally in poor health, have difficulty

performing their Activities of Daily Living (ADLs)

25% live in nursing homes

7

Dually Eligible People Have More Chronic Illness

Alzheimer’s disease Amputation Arthritis Asthma Chronic renal failure Colitis Congestive heart failure COPD Dementia Depression Diabetes Esophageal disease

GI Bleeding Hip fracture Ischemic heart disease Liver disease Mental retardation Myocardial infarction Osteoporosis Parkinson’s disease Psychosis Schizophrenia Seizures Stroke, and More. . .

Source: Perrone. Profile of Dually Eligible Seniors in Mass. 1999.

8

Dually Eligible People Are Frail and Require More Medical Services

Hospital Nursing home Skilled nursing

facility Home health Emergency room Physician services Prescription meds

Physical therapy Rehab services Laboratory services Hospice care Inpatient psychiatry X-rays And More . . .

9

Dually Eligible People Have More Difficulty

Obtaining Medical Care They are less likely to have a primary care

physician.

They are twice as likely to report difficulty obtaining health care.

They are four times as likely to use the emergency room or hospital for their healthcare needs.

They are more likely to delay health care due to cost.

10

Dually Eligible People Are Twice as Expensive as

Non-Dually Eligible PeopleDually eligible people comprise Only 17% of the Medicare and

Medicaid population.

Yet these same people use Almost 35% of of all

Medicare and Medicaid money.

The cost of caring for these people Totaled $106 Billion in 1995.

Source: Breaux, John. Torn Between Two Systems.

Medicare Population:

ELDERLY or DISABLED

MedicaidMedicaidPopulation:Population:

POORPOOR17%

Medicare

$MedicaidMedicaid

$$35%

11

Section 2.

Second-Class Medicare

12

Insurance Reimbursement Affects

Access to Health Care

Accessto

Health Care

Uninsured Medicaid Medicare BoutiquePhysician

Insurance ReimbursementLess $ More $

100%

0%

13

How Crossovers WorkJanuary 2000 – With Crossovers

80-Year-Old Woman withDiabetes, Hypertension, Arthritis, Alzheimer’s DiseaseNew Patient – 45-minute Office Visit – Level 4

Medicare AllowedAmount

$126

Medicaid Payment

$126

MedicarePayment

“Crossed Over”

Total Payment

14

How Crossovers WorkFebruary 2000 – Without

Crossovers45-minute Office Visit for the Same New Patient

$126 Allowed

$34Paid

34/126 = 27% Paid

73% LOSS

$126 Allowed

101/126 = 80% Paid

20% LOSS

Medicare Deductible NOT Met Medicare Deductible Met

$101 Paid

15

The Elimination of Crossover Payments for

Dually Eligible People is a “Geriatric Penalty”

My Response to This Geriatric Penalty:

House Calls to NewDually Eligible Patients

Geriatric Clinic Hours

STOPPED

DECREASEDBY 10%

16

My New Orleans Dually Eligible Population, 2000

89% African American

79% Women

34% Mentally or Physically Disabled

100% Poor

HOME VISITS100% to Disabled African Americans

17

African-American Population and

The “Southern Black Belt”African Americans, as a Percent of Total Population, by County

Source: U.S. Census Bureau. Census 2000.

70.0 to 86.5

50.0 to 69.9

25.0 to 49.9

12.3 to 24.9

5.0 to 12.2

1.0 to 4.9

0.0 to 0.9

African Americans Are 12.3%

Of the U.S. Population

18

The “Southern Disability Belt”Percentage of People with Any Disability,

In the 16- to 64-year-old Population, by State in 1990.

Source: U.S. Census Bureau. Census Disability Data. 1998.

15% to 20%

20% to 25%

25% and over

19

100% 100% 100%

80%

50%

"First-Class Medicare" "Second-Class Medicare"

Second-Class Medicare Medicare in Louisiana & 2/3 of All States is a

Two-Tiered Discriminatory Benefit System

Violates the

Civil Rights Act &

The Americans with

Disabilities Act

Healthy &

Wealthy Seniors

•Elderly•Poor•African Americans & Other Minorities

•Women•Physically Disabled

Mentally Disabled

Taxes Paid Benefits Taxes Paid Benefits

Four Million Dually Eligible With Medicare & Medicaid

Decreased Access To

Health Care

20

Section 3.

The Nursing Home Burden

21

Most Nursing Home Residents AreDually Eligible People

Percent of Medicare Beneficiaries Living in

Nursing Homes

Nursing Home Population

2%

24%

0%

5%

10%

15%

20%

25%

Non-DuallyEligible

Dually Eligible

Dually Eligibl

e~70%

Non-Dually Eligible

~

Source: HCFA

22

Medicaid Payments forDually Eligible People, 1995

4% 3%6%

85%to Nursing

Homes

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Physicians Inpatient Hospital Prescriptions Nursing Homes

Source: HCFA

23

30% of Medicaid Budgets Is Spent to HouseDually Eligible People in Nursing Homes

Dually eligible people consume 35% of all Medicaid money — Senator John Breaux

85% of all money spent by Medicaid on dually eligible people is spent on their nursing home care — HCFA

MedicaidNursing HomePayments forDually EligiblePeopleAll OtherMedicaidServices

30% $ for 1.5 Million People (4%)

70% $ for 40 Million People (96%)

Therefore, 85% x 35% = 30% of state and federal Medicaid budgets is spent to house dually eligible people in nursing homes.

Only 70% of Medicaid budgets is available to pay for all other services, patients, and healthcare providers.

24

Second-Class Medicare

Louisiana Decreases Home Visit $ by 81%

And Saves $108

Pays $26,000/Year When Patient Is Admitted to Louisiana Nursing Home

Decreased Medical Access and Increased Nursing Home Costs

$26,000/Year

$500 Million Louisiana Nursing

Home Bill For 26,000

Dually Eligible People

95-Year-OldDually

EligibleWoman withAlzheimer’s

Disease

BUT

3% of Total

Louisiana Expenditures

The State View

25

Second-Class Medicare

Decreased Medical Access and Increased Nursing Home Costs

$500 Million LA Nursing

Home Bill for 25,000 Dually Eligible People

1.8% of TotalFederal

Expenditures

$34 Billion National

Nursing Home Bill for

1.5 Million Dually Eligible

People

$500 Million LA Bill

$500 Million Louisiana

Nursing Home Bill for Dually

Eligible People

The National View

26

Medicare-Medicaid Payment SeesawMedicare Pays for

Acute CareMedicaid Pays for

Chronic Care

Physician Office, Hospital, Home Health Nursing Home

80% Federal Medicare $

80% Louisiana Medicaid $

27

Medicare-Medicaid Payment SeesawWith Physicians and Crossovers, 1999The Seesaw Tips to the Left

More FederalMedicare $

Less LouisianaMedicaid $

Physician Office, Hospital, Home HealthNursing HomePhysician Gatekeeper and Patient Advocate

Louisiana Scorecard

Patients and Families: PleasedPhysicians: PleasedLA Treasury: Pleased

28

Medicare-Medicaid Payment Seesaw

Without Physicians & Crossovers, 2001The Seesaw Tips to the Right

Less FederalMedicare $

More LouisianaMedicaid $

Louisiana Scorecard

Patients and Families: DispleasedPhysicians: DispleasedLA Treasury: Displeased

Physician Office, Hospital, Home Health

Nursing Home

29

For Louisiana and All State Treasuries

Community Care is a Bargain

Nursing Home Care

is a BurdenBecause Dually Eligible People Are Medicare-

Medicaid

Medicare80%

Federal $

Because Dually Eligible People Become

Medicaid-Medicare

Medicaid 80% State $Medicaid

20% State $

Medicare 20%

Federal $

30

Effects of a $27 Million LouisianaNursing Home Raise, 2002

Community Care Would Bring $101 Million Additional Federal Funds Into Louisiana

$27 Million Louisiana Medicaid

$7 MillionFederal Medicar

e

Could Have Purchased $135 Million of Community

Services

Will Purchase Only $34 Million of Nursing

Home Services

$108 Million Federal

Medicare

$27 Million

Louisiana

Medicaid

31

78% of Nursing Home Costs Are forCustodial Services — Room and Board,

ADLs$500 Million LA Nursing Home Bill $34 Billion National Nursing Home Bill

2.4% of All Louisiana Expenditures

1.4% of All Federal Expenditures

$390Million

CustodialServices

$110MillionMedicalServices

$27Billion

CustodialServices

$7 Billion

MedicalServices

Custodial Care for Dually Eligible People Costs:

32

Section 4.

Possible Solutions

33

Escalating Costs for Dually Eligible People

$106Billion

$120Billion

90

100

110

120

130

140

150

160

1995 1997 2003

$ Billions

?

34

National Coalition for Dually Eligible PeopleA Louisiana Not-for-Profit Corporation

Dedicated to Improving Access and Health Care forElderly and Disabled Dually Eligible People with

Medicare and Medicaid — “The elderly and disabled poor”

www.nacdep.org

35

Elephant Cartoon

“The TV keeps talking about a Healthcare Elephant, but I don’t see any elephant!”

36

Bottom Line for Louisiana and the Nation

Keep Dually Eligible People IN the Community and OUT of Nursing Homes.

Dually Eligible People Need “First-Class” Access to Community Medical Services.

The Medicare-Medicaid Payment Seesaw: For dually eligible people, decreasing community services or payments for physicians, home health, medications, transportation, etc., will increase state Medicaid nursing home costs.

37

Short-Term Solution

State Level Restore Crossover Payments in 2/3 of the States

Federal Level Change the Balanced Budget Act of 1997

– OR –

Pay Crossovers with 100% Federal Funds

38

A “Federal Crossover Program”

An estimated $1.5 billion “Federal Crossover Program” may decrease the $34 billion national Medicaid nursing home bill for dually eligible people by improving their access to community healthcare.

The federal government is already legally obligated to pay more than one-half of this estimated $1.5 billion Medicaid bill.

If the federal government invests an additional $750 million — averaging $15 million per state — in a “Federal Crossover Program” and saves only 2.2% of our national Medicaid nursing home bill, the program would be a social, a financial, and a political success.

39

Medicare Money Saved by Regulating Direct-to-Patient Advertising of

“FREE” Geriatric Medical Equipment Could Help Fund A

Federal Crossover Program.

“FREE” - Scooters and electric wheelchairs “FREE” - Comfort knee supports “FREE” - Heating pads “FREE” - Seat-lift chairs

One “FREE” $7,744 electric wheelchair could pay the 20% Medicare coinsurance and improve access for 787 dually eligible people in Louisiana in 2002.

40

Long-Term Solution

Dually Eligible People Need an Integrated Healthcare System

Which Combines:

Medicare’s Acute and Community Care Programs

Medicaid’s Long-Term Care and Medication Programs

Case Management Tools and Coordination of Services

41

Section 5.

Geriatrics — An Ailing

Specialty

42

This “Geriatric Penalty” Erodes The Specialty of

Geriatrics “The major reason for the shortage of

geriatricians is poor . . . reimbursement.” — Dr. John Burton, congressional testimony, 2001

No matter how high Medicare raises its rates, geriatricians treating dually eligible people will always be losing a minimum of 20%.

Geriatricians will be financially wise to shun states such as Louisiana that have a “geriatric penalty” in favor of states that do pay crossovers.

43

Making Rounds with Two Louisiana Geriatricians, January

2002

Total Payment for Dually Eligible Patients = $ 351 Total Payment for Non-Dually Eligible Patients = $1,019 $351/$1,019=34%, a Loss of 66% or $668

0

20

40

60

80

100

120

140

160

Insur. Payment

$

Non-DuallyEligible

DuallyEligible

Physician Services

44

Section 6.

The Past, Present, and

Future

45

The View From 1978 — Not Much Has Changed

In 1978, dually eligible people were older, 71% were female, and “the proportion of . . . minority races was four times as great. . . [and] the death rate was 50% higher. . . .”

“Perhaps the excess morbidity and mortality of the poor as they enter their senior years, reflect a lifetime of poor nutrition, housing, and other non-medical factors that are believed to influence health status.”

Source: McMillan. Health Care Financing Review 4 (1983): 19-46

46

What Causes Healthcare Costs to Increase ?

Population growth — 77 million baby-boomers

Expensive new technology and treatments

“The elderly and disabled poor” Dually eligible people with Medicare and Medicaid This medical-social problem requires more research The “final social safety-net” — long-term care

47

$0

$50,000

$100,000

$150,000

$200,000

$250,000

65 70 75 80 85 90 95 100 101

MedicareServices

Nursing HomeCare

Home Care

PrescriptionDrugs

Age at Death

Exp

endi

ture

s P

er P

erso

n

Spillman. NEJM 342 (2000): 1409-15

Cumulative Healthcare ExpendituresAt Age of Death

48

“Racial and ethnic minorities tend to receive a lower quality of

healthcare . . . .” — Institute of Medicine, Unequal

Treatment: Confronting Racial and Ethnic Disparities in Healthcare, 2003

“Racial and ethnic disparities in healthcare . . . are associated with worse outcomes . . . are unacceptable. . . . [and occur along with] discrimination in many sectors of American life.”

“This higher burden of disease and mortality among minorities . . . results in a less healthy nation and higher costs for health and rehabilitative care.”

49

Dually Eligible People — at the Center of the Next

Debate Because of their frailty, their social and

racial demographics, their great expense, and their expanding growth rate, dually eligible people — “the elderly and disabled poor” — will occupy a central position in the upcoming debates over national healthcare financing and disparities in health care in the 21st century.