![]() ![]() Relative to the Medicare-only population, dual-eligible beneficiaries are more likely to be a racial or ethnic minority, be female, live in rural areas, and experience food and housing insecurity. Payment strategies that affect dual-eligible beneficiaries strongly affect health equity, given the composition of the dual-eligible population. Reconciling Medicaid’s lower payment rates with Medicare’s shift to value-based payments raises unique challenges for the dual-eligible population. This combination of Medicaid and Medicare payment policies often results in lower payments for providers at point of service, but higher payments for organizations and plans paid under value-based formulas that account for higher spending among dual-eligible beneficiaries. Medicare payment rates are historically higher than the Medicaid program, but Medicare is embracing value-based payments that give providers and Medicare Advantage managed care plans financial incentives to provide better health outcomes at lower spending levels. Establishing low provider payment rates is a common Medicaid cost containment approach for this comprehensive coverage. State Medicaid programs are federally required to provide a broad range of services, including benefits not covered by Medicare, such as long-term services and supports. One challenge in aligning these programs is the inconsistent, and sometimes contradictory, payment strategies used in Medicare and Medicaid. Poor alignment between the Medicare and Medicaid programs contributes to higher spending levels and worse outcomes for dual-eligible beneficiaries, which motivates efforts to integrate Medicare and Medicaid benefits. As strategies for integrating Medicare and Medicaid evolve, so should strategies for how Medicare and Medicaid pay for services for dual-eligible beneficiaries.ĭual-eligible beneficiaries have higher Medicare spending levels than Medicare-only beneficiaries because of multiple factors, including higher prevalence of health conditions and greater exposure to social risk factors. ![]() To avoid penalizing safety-net providers, the Centers for Medicare and Medicaid Services has introduced risk adjustment in comparisons of quality, relying almost exclusively on dual-eligibility status as a proxy for patients at high risk for poor outcomes because of social risk factors.Current capitated payment approaches benefit Medicare Advantage plans serving dual-eligible beneficiaries, even though there are limited data about the quality and effectiveness of managed care for dual-eligible beneficiaries.On a per service basis, providers are often paid less to treat dual-eligible beneficiaries than they would be paid to treat Medicare-only beneficiaries because of “lesser-of” payment policies. ![]()
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