Large Savings May Be Hard to Find in Dual Eligible Reform Programs

As federal and state agencies attempt to reduce the growth of spending for people eligible for both Medicare and Medicaid, new research shows that it may be hard to find large savings in new demonstration programs, according to a report from the Kaiser Family Foundation (pdf).

People who are eligible for both Medicare and Medicaid are commonly referred to as dual eligible beneficiaries, and they are one of the poorest, sickest and costliest groups of patients for hospitals and other providers. Dual eligibles constitute 21 percent of Medicare beneficiaries but 31 percent of Medicare costs, and they represent 15 percent of Medicaid beneficiaries but 39 percent of Medicaid costs.

The KFF study looked at evidence regarding the various programs and demonstrations that aim to reduce the costs of treating these patients, and a review of nine reports and studies, in particular, showed that massive savings may not be feasible.


Several capitated plans, such as the Program of All-Inclusive Care for the Elderly and others, reduced hospitalizations for dual eligibles, but they did not show cost savings because capitated payments were higher than what Medicare would have paid under the traditional fee-for-service system.

Instead, the KFF authors said it's more reasonable to expect "modest Medicare cost savings" and care improvements for dual eligibles. The evidence and literature review suggested that lawmakers not rely on large Medicare savings some programs have projected. In order to achieve cost controls while still providing the vital level of care for dual eligibles, programs will have to "monitor and measure access to and quality of care," according to the report.

More Articles on Dual Eligibles:

Managed Care Demonstration From Massachusetts Approved by CMS

Report: 26 States Ready to Reform Dual Eligible Programs

Study Links Physician Group Practice Demo to Big Savings for Dual Eligibles

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