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California project takes aim at dual eligibles

The California Department of Health Care Services (DHCS) announced last week a three-year demonstration project that will take place in four counties aimed at improving care coordination for seniors and persons with disabilities who are dually eligible for Medicare and the state's Medicaid insurance program Medi-Cal.

Nationally, managing the care of so-called "dual elegibles" has received increased attention as this population has some of the most complex health problems, which cost both the national Medicare program and state Medicaid programs a disproportionate slice of their total budgets.

[See also: HHS rolls out three initiatives to lower costs of dual eligibles]

"Currently, most dual eligible beneficiaries access services through a complex system of disconnected programs that often leads to beneficiary confusion, delayed care, poor care coordination, inappropriate utilization and unnecessary costs, issues we are addressing with this proposal," said DHCS Director Toby Douglas, in a press release. "The goal is to design a seamless system that helps dual eligible beneficiaries get the healthcare services they need and improve health outcomes in a more fiscally efficient manner."

According to a 2011 study sponsored by America's Health Insurance Plans and conducted by Emory University Rollings School of Public Health Professor, Kenneth E. Thorpe, PhD, better management of the dual eligible population has the potential to save the federal government $125 billion and individual states $34 billion over the next ten years.

"While care coordination is not a new idea, it is an idea that promises significant results when applied to dual-eligible beneficiaries because of their health status and the implications for healthcare costs," wrote Thorpe in his study summary.

In California, the state estimates there are as many as 1.1 million enrolled in both Medicare and Medi-Cal and that these patients account for roughly 25 percent of the state's total Medi-Cal expenditures. The demonstration project will be launched in four counties initially – Los Angeles, Orange, San Diego and San Mateo – and may include as many as ten counties in 2013.

In all, DHCS estimates that by enrolling a portion of the dual eligible population in the demonstration's integrated care delivery models, it can achieve savings of $678.8 million in FY 2012-2013, increasing to more than $1 billion in FY2013-2014.

[See also: States battle Medicaid spending increases]

The announcement of the project follows months of preparation and a site selection process. To help manage the program, the state solicited and received 22 proposals from private insurance companies on how to manage the dual eligible population.

Health plans participating in the project will receive blended payments from Medicare and Medi-Cal and members of the program would have a single health plan and care team to help coordinate service and manage their health.

All medical and long-term services will be integrated as managed care benefits, with participating health plans required to provide coordination of mental health and substance abuse services. It will also place an emphasis on avoiding unnecessary hospitalizations and nursing home admissions via the In-Home Supportive Services (IHSS) program, the nation's largest personal care provider program.

"In-Home Supportive Services is an important service that assists more than 440,000 people with services they need to live independently at home," said Will Lightbourne, director of the California Department of Social Services, which oversees the IHSS program, in a prepared statement. "IHSS will remain an entitlement program and the consumers' current rights, including the right to self-direct their care by hiring, firing and directing their IHSS workers, will not change."

Pending approval from CMS, the state will begin notifying beneficiaries of upcoming changes due to the proposed demonstration in the fall of 2012. If approved, enrollment will begin in January 2013.

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