Dually Eligible People With
Medicare and Medicaid
“The Elderly and Disabled Poor”
Sheldon Hersh, MD
New Orleans, Louisiana
© 2003 National Coalition for Dually Eligible People
Table of Contents
1.
2.
3.
4.
5.
6.
Dually Eligible People
Second-Class Medicare
The Nursing Home Burden
Possible Solutions
Geriatrics — An Ailing Specialty
The Past, Present, and Future
2
Section 1.
Dually Eligible People
3
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.
4
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
5
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
6
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.
7
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 . . .
8
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.
9
Dually Eligible People Are
Twice as Expensive as
Non-Dually Eligible People
Dually eligible people comprise
Only 17% of the Medicare and
Medicaid population.
Medicare
Population:
17%
ELDERLY or
DISABLED
Medicaid
Population:
POOR
Yet these same people use
Almost 35% of of all
Medicare and Medicaid money.
Medicare
$
Medicaid
35% $
The cost of caring for these people
Totaled $106 Billion in 1995.
Source: Breaux, John. Torn Between Two Systems.
10
Section 2.
Second-Class Medicare
11
Insurance Reimbursement
Affects
Access to Health Care
100%
Access
to
Health
Care
0%
Uninsured
Less $
Medicaid
Medicare
Insurance Reimbursement
Boutique
Physician
More $
12
How Crossovers Work
January 2000 – With Crossovers
80-Year-Old Woman with
Diabetes, Hypertension, Arthritis, Alzheimer’s Disease
New Patient – 45-minute Office Visit – Level 4
Total Payment
Medicare
Allowed
Amount
Medicaid
Payment
“Crossed Over”
Medicare
Payment
$126
$126
13
How Crossovers Work
February 2000 – Without Crossovers
45-minute Office Visit for the Same New Patient
Medicare Deductible NOT Met
Medicare Deductible Met
$126
Allowed
$126
Allowed
$101
Paid
$34
Paid
34/126 = 27% Paid
101/126 = 80% Paid
73% LOSS
20% LOSS
14
The Elimination of Crossover Payments for
Dually Eligible People is a
“Geriatric Penalty”
My Response to This Geriatric Penalty:
House Calls to New
Dually Eligible Patients
STOPPED
Geriatric Clinic Hours
DECREASED
BY 10%
15
My New Orleans
Dually Eligible Population, 2000
89%
African American
79%
Women
34%
Mentally or Physically
Disabled
100% Poor
HOME VISITS
100% to Disabled
African Americans
16
African-American Population and
The “Southern Black Belt”
African Americans, as a Percent of
Total Population, by County
70.0 to 86.5
African
Americans
Are 12.3%
Of the U.S.
Population
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
Source: U.S. Census Bureau. Census 2000.
17
The “Southern Disability Belt”
Percentage of People with Any Disability,
In the 16- to 64-year-old Population, by State in 1990.
15% to 20%
20% to 25%
25% and over
Source: U.S. Census Bureau.
Census Disability Data. 1998. 18
Second-Class Medicare
Medicare in Louisiana & 2/3 of All States is a
Two-Tiered Discriminatory Benefit System
Taxes Paid Benefits
100%
100%
Healthy
&
Wealthy
Seniors
"First-Class Medicare"
Taxes Paid
100%
Benefits
80%
•Elderly
•Poor
50%
•African
Americans
& Other
Minorities
Mentally
•Women
Disabled
•Physically
Disabled
"Second-Class Medicare"
Four Million Dually Eligible
With Medicare & Medicaid
Decreased
Access To
Health Care
Violates the
Civil Rights Act &
The Americans with
Disabilities Act
19
Section 3.
The Nursing Home Burden
20
Most Nursing Home Residents Are
Dually Eligible People
25%
24%
20%
15%
Dually
Eligible
~70%
~
10%
5%
NonDually
Eligible
2%
0%
Non-Dually
Eligible
Dually Eligible
Percent of Medicare
Beneficiaries Living in
Nursing Homes
Nursing Home
Population
Source: HCFA
21
Medicaid Payments for
Dually Eligible People, 1995
90%
85%
80%
to Nursing
Homes
70%
60%
50%
40%
30%
20%
10%
0%
4%
Physicians
3%
Inpatient Hospital
6%
Prescriptions
Nursing Homes
Source: HCFA
22
30% of Medicaid Budgets Is Spent to House
Dually 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
 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.
30% $ for
1.5 Million
People (4%)
70% $ for 40 Million
People (96%)
Medicaid
Nursing Home
Payments for
Dually Eligible
People
All Other
Medicaid
Services
23
Second-Class
Medicare
Decreased Medical Access and
Increased Nursing Home Costs
The State View
95-Year-Old
Dually
Eligible
Woman with
Alzheimer’s
Disease
Louisiana Decreases
Home Visit $ by 81%
And Saves $108
$500 Million
Louisiana
Nursing
Home Bill
For 26,000
Dually
Eligible
People
BUT
3%
of Total
Louisiana
Expenditures
Pays $26,000/Year When Patient Is
Admitted to Louisiana Nursing Home
24
Second-Class
Medicare
Decreased Medical Access and
Increased Nursing Home Costs
The National View
$34 Billion
$500 Million
Louisiana
Nursing Home
Bill for Dually
Eligible People
$500 National
Million
LA Nursing
Nursing Home
Home Bill for
Bill for
25,000
1.5 Million
Dually
Dually
Eligible Eligible
People
People
1.8%
of Total
Federal
Expenditures
25
Medicare-Medicaid Payment Seesaw
Medicare Pays for
Acute Care
Physician Office, Hospital, Home Health
80% Federal
Medicare $
Medicaid Pays for
Chronic Care
Nursing Home
80% Louisiana
Medicaid $
26
Medicare-Medicaid Payment Seesaw
With Physicians and Crossovers, 1999
The Seesaw Tips to the Left
More Federal
Medicare $
Louisiana
Scorecard
Less Louisiana
Medicaid $
Patients and Families: Pleased
Physicians: Pleased
LA Treasury: Pleased
27
Medicare-Medicaid Payment Seesaw
Without Physicians & Crossovers, 2001
The Seesaw Tips to the Right
Less Federal
Medicare $
Louisiana
Scorecard
More Louisiana
Medicaid $
Patients and Families: Displeased
Physicians: Displeased
LA Treasury: Displeased
28
For Louisiana and All State Treasuries
Community Care
is a Bargain
Nursing Home Care
is a Burden
Because Dually Eligible People
Are Medicare-Medicaid
Because Dually Eligible People
Become Medicaid-Medicare
Medicare
80%
Federal $
Medicaid
20%
State $
Medicaid
80%
State $
Medicare
20%
Federal $
29
Effects of a $27 Million Louisiana
Nursing Home Raise, 2002
Could Have Purchased
$135 Million of Community
Services
$108
Million
Federal
Medicare
$27
Million
Louisiana
Medicaid
Will Purchase Only
$34 Million of Nursing Home
Services
$7
Million
Federal
Medicare
$27 Million
Louisiana
Medicaid
Community Care Would Bring
$101 Million Additional Federal Funds Into Louisiana
30
78% of Nursing Home Costs Are for
Custodial Services — Room and Board, ADLs
$500 Million LA Nursing Home Bill
$390
Million
Custodial
Services
$110
Million
Medical
Services
$34 Billion National Nursing Home Bill
$27
Billion
Custodial
Services
$7
Billion
Medical
Services
Custodial Care for Dually Eligible People Costs:
2.4% of All
1.4% of All
Louisiana Expenditures
Federal Expenditures
31
Section 4.
Possible Solutions
32
Escalating Costs for Dually Eligible People
160
?
150
140
$120
Billion
130
$
Billions
120
110
$106
Billion
100
90
1995
1997
2003
33
National Coalition for Dually Eligible People
A Louisiana Not-for-Profit Corporation
Dedicated to Improving Access and Health Care for
Elderly and Disabled Dually Eligible People with
Medicare and Medicaid — “The elderly and disabled poor”
www.nacdep.org
34
Elephant Cartoon
“The TV keeps talking about a Healthcare
Elephant, but I don’t see any elephant!”
35
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.
36
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
37
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.
38
Medicare Money Saved by Regulating
Direct-to-Patient Advertising of
“FREE” Geriatric Medical Equipment
Could Help Fund A
Federal Crossover Program.





“FREE”
“FREE”
“FREE”
“FREE”
-
Scooters and electric wheelchairs
Comfort knee supports
Heating pads
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.
39
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
40
Section 5.
Geriatrics — An Ailing Specialty
41
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.
42
Making Rounds with Two Louisiana
Geriatricians, January 2002
160
Insur.
Payment
$
140
120
100
NonDually
Eligible
80
60
Dually
Eligible
40
20
0
S3 NH3
V3
V4 HHS
V3
S3
V4
V3
H3
O
O
H
O
O
H
H
N
I
I
I
I
I
R
R
R
R
34381 343- 223304
03
03
1
1
3
1
1
2
2
3
2
2
2
0
3
G
99
99
99
99
99
99
99
99
99
Physician Services



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
43
Section 6.
The Past, Present, and Future
44
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
45
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
46
Cumulative Healthcare Expenditures
At Age of Death
Expenditures Per Person
$250,000
$200,000
Medicare
Services
$150,000
Nursing Home
Care
Home Care
$100,000
Prescription
Drugs
$50,000
$0
65
70
75
80
85
90
Age at Death
95 100 101
Spillman. NEJM 342 (2000): 1409-15
47
“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.”
48
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.
49