Medicare Compliance & Reimbursement

Medicaid must ID high-cost benes, say researchers.

As a special, presidentially-appointed commission rolls up its sleeves to figure out how to cut billions out of the Medicaid budget, one independent think tank is offering some sobering figures on the enormity of the task.
 
The Center for American Progress released two studies on Medicaid costs that indicate staggering current and future long-term care demands on the program. Researchers expressed concerns that Congress' budget resolution to cut $10 billion from Medicaid during the next five years could make the nation's LTC "safety net" a virtual death trap for seniors and the disabled.
 
Getting to the source of Medicaid's soaring costs, researchers with extensive backgrounds in the Medicaid program released the report "Medicaid Cost Containment: The Reality of High-Cost Cases." The report found that high-cost beneficiaries account for almost three-fourths of Medicaid spending and Medicaid pays for 24 percent of the top 10-percent high-cost individuals.
 
But this figure doesn't include nursing home residents and other institutionalized beneficiaries, "for whom Medicaid is the dominant payer," researchers noted.
 
Hospital care and home health services comprise 64 percent of Medicaid spending for high-cost beneficiaries, the study found. Approximately 56 percent of high-cost
beneficiaries were hospitalized in the past year and 72 percent have chronic health problems, including heart disease, asthma and diabetes.
 
Pinpointing the source of rising Medicaid costs is only the first step, however. Researchers claimed that proposals to increase beneficiary cost-sharing and cut benefits could reduce beneficiary access without reducing costs. Instead, the report offers care management proposals.
 
"Targeting high-cost beneficiaries could increase quality and possibly reduce costs," they said. Drug Spending Demands Help From Government 

"Federal Policy Options to Contain Medicaid Drug Costs" recommends several clear directives to the federal government to quell Medicaid's skyrocketing prescription drug spending. Between 1998 and 2002, Medicaid drug spending doubled. Despite the slight growth-rate drop in 2004, the program's drug spending is still far too high and straining budgets, researchers said.
 
Government should provide states with pharmaceuticals' average sales prices to achieve prudent purchasing, they recommended. Government should also help states maximize drug manufacturer rebates and reduce the burden on certain states that might pay more with the new Medicare drug benefit, the report states.