To read Nathan's entire transcript, download it here.
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Today he answers the question:
We hear a lot these days about health care reform. In what ways has health care reform impacted the duals population?
Nathan: That’s a great question. We talked a little bit about the expansion of eligibility. That’s probably the single biggest immediate change in this program. We also see a number of Dual Eligibles Coordination Demonstration Programs. For those who may not be familiar, Demonstration Programs are designed and initiated by CMS itself. Take us back to high school Civics class for a second here. When a law gets passed by the legislature, by our Congress, it then gets handed to the executive branch to execute. In this case it gets handed to CMS. We all know that moment when that law passes (Obama Care, as some people call it), it gets passed and it gets handed to the agency and then they write regulations. You could take a 1,000-page law and turn it into hundreds of thousands of pages of regulations, rules and guidance as it actually gets implemented.
But, CMS also has the authority to conduct experiments. They are given a rather broad purview in doing this. Some of these are called ‘demonstrations’ where they also do them under a different designation called an ‘authority’. There are some technical details between
the two. But in this case, they have a number of Dual Eligibles Coordination Demonstration projects that they run out of the MMCO, which is that Medicare/Medicaid Coordination Office that I mentioned before. They’ve got CMS sponsored Medicare/Medicaid integration waivers in the states of Massachusetts and Minnesota and Wisconsin. They’ve got 29 states that our audience is probably aware of that operate what are called: ‘PACE programs’, which is an older program. The program of All-Inclusive Care for the Elderly. Those provide a full range of medical and long-term services for duals over 65 who qualify for nursing home care. The most vulnerable of the vulnerable. And they get a capitated payment to cover Medicare and Medicaid services at those pay sites.
And then we also see Dual Eligibles enrolling in Medicare Advantage plans through that program I mentioned a moment ago called: ‘The Special Needs Plan Program’. They are allowed to have different benefit sets that are tailored around the needs of this population.There were major changes that came though. The most important change (other than the eligibility requirements changing) really was that creation of this Office to handle integration because what they are doing is creating a structure and a mechanism for continued experimentation around these programs.
At the risk of getting political about any of this, one thing that we see is that although the government is marching into the health care sector with an energy it never has seen before (remember 2012 is the first year that government spending is going to exceed private spending in the health care space), it’s sort of a milestone. That typically doesn’t retrench; it doesn’t typically go in the other direction. But, far from a one-size-fits-all approach to this, they are giving a wide range of latitude to the states to waiver out of certain programs, to waiver out of certain requirements. They are creating an Office that’s really dedicated to experimentation. I can’t remember the Supreme Court Justice who called the states the ‘laboratory for democracy’. Well, to some extent the CMS is using the states as a laboratory for creating best practices around care.
We are moving, one way or another, into something like government-financed care for all US citizens, but it’s not single payer. It’s going to be a patchwork. Now, that might sound like a pejorative term, so a better term might be a ‘sewn together system of best practices that are locally tailored’. They are not imposing one coordination-of- care system on the nation. They are allowing for many, many different types of systems to be created here. I think that CMS (although I certainly can’t speak for them) would acknowledge that they are making this kind of experiment.
So, it is a time of great experimentation. It’s a time of great opportunity for payers that have experience with either the Medicare or Medicaid population. They just need to go in eyes wide open to this program because the needs of this beneficiary population are just so different than your average Medicare beneficiary or the moms and kids of so many that our Medicaid providers currently care for.