Dual Eligibles and Medicare Spending For patients with 5 or more chronic conditions, Medicare spends 40% more for a dual eligible than for a person covered only by Medicare? DataBrief Series ● September 2010 ● No. 3

Spending on Dual Eligibles with Chronic Conditions “Dual eligibles” are low-income individuals who qualify for both the Medicare program and the Medicaid program. The dual eligibles receive their health care services through the Medicare program while the Medicaid program pays for services and supports not covered by Medicare including supports like Medicare co-pays, and services like long-term nursing home stays. Dual eligibles are more likely to have more chronic conditions, have a mental illness, and have functional impairments than Medicare-only beneficiaries.1 When compared to Medicare beneficiaries with the same number of chronic conditions, dual eligibles spent $54,199 Medicare dollars compared to Medicare-only beneficiaries who spent $38,675 Medicare dollars per capita in 2008. Coughlin, Waidman, O’Malley Watts. “Where Does the Burden Lie? Medicaid and Medicare Spending for Dual Eligible Beneficiaries.” Kaiser Commission on Medicaid and the Uninsured. April 2009 DataBrief (2010) ● No. 3

Dual eligibles with 5 or more chronic conditions have higher per capita Medicare spending than Medicare-only beneficiaries with 5 or more chronic conditions.1 Annual spending. Includes items and services such as: Part B drugs, durable medical equipment, ambulance, and ambulatory surgical centers. N = 166,400 N = 419,340 DataBrief (2010) ● No. 3

This analysis uses 2008 Medicare claims data to identify individuals with chronic conditions; a list of 21 common chronic conditions was derived from the Medicare Chronic Condition Working file. Dual eligibles were defined as being eligible for a state buy-in program sometime in 2008. Hospital, skilled nursing, home health, physician, and select Part B claims were analyzed for spending information. This analysis is limited to individuals enrolled in the fee-for service, or traditional, Medicare program. Medicare spends more on dual eligibles with chronic conditions than for Medicare-only beneficiaries with similar numbers of chronic conditions. The higher care costs may be indicative of minimal care coordination and poor health outcomes, which could be the result of being covered by two separately managed programs – Medicare and Medicaid. As a result of health reform, the Centers for Medicare and Medicaid Services (CMS) now possesses new authority to test creative approaches to program integration. CMS’ newly established Federal Coordinating Health Care Office and Center for Medicare and Medicaid Innovation have unprecedented opportunity to break down payment and care silos between the states and the federal government. The goal is to move toward providing dual eligibles with seamless access to benefits under both the Medicare and Medicaid programs. DataBrief (2010) ● No. 3