The Centers for Medicare & Medicaid Services must do more to move states away from an “extremely bifurcated” Medicare and Medicaid system that sometimes leaves dually eligible beneficiaries confused about their care and coverage, analysts said Monday.

Roughly 1 million long-stay nursing home residents are eligible for both Medicare and Medicaid. In its new report, ATI Advisory found that they were more likely to be hospitalized and have a Medicare-covered SNF stay than their community-dwelling peers.

Integrated models of care could remove a perceived incentive to hospitalize Medicaid patients to move them to higher paying Medicare status. But eliminating healthcare waste and keeping patients in — or moving them to — the most appropriate setting doesn’t have to be a losing venture for high-quality skilled nursing providers.

A shift toward integration is an opportunity to incorporate financial incentives for high-value care in nursing facilities, said report author and ATI Senior Analyst Cleo Kordomenos. First, however, CMS has to lay the groundwork for states to embrace such wide-scale changes, she told McKnight’s Long-Term Care News.

“If CMS isn’t saying it, states — given all the pressures and constraints on their end — are going to be hard-pressed to prioritize it,” Kordomenos said. “CMS can really ease the burden on states by putting forth more detailed guidance and policy.”

She recommended the agency issue letters to state Medicaid directors, and provide other guidance that lays out specific opportunities or approaches. This should include elements that could make value-based care work better for both providers and beneficiaries.

The report comes as CMS strips away its old way of funding care for dual-eligibles to encourage enrollment in D-SNPs, or Dual-eligible Special Needs Plans. In late 2022, CMS announced it would sunset its current Medicare-Medicaid Plan, or MMP, model in 2025. That appears to be ushering in a new era in state-level plans for dual-eligibles. Yet beneficiaries in nursing homes continue to be largely overlooked, Kordomenos noted.

“CMS has really moved the dial on integration, but the integration conversation largely has focused on those dual-eligibles in the home and community settings and not the nursing facility setting,”  she said. 

“States, as they’re thinking through their integrative program design — whether it be those states transitioning from the MMP model, or states just generally taking a cue from CMS and using it as an opportunity to revisit the levers they have available in their programs — it presents an opportunity to raise that there is this entire population, about 1 million or so, who are dual-eligible in nursing facilities across states.” 

Value-based care for duals

In her paper, Kordomenos pitches a value-based arrangement in which a single organization takes on risk across the full spectrum of Medicare and Medicaid services, including SNF stays. Both nursing homes and managed care plans that administer a plan would share credit and accountability for the outcomes of dual-eligible SNF residents. 

Contracts could outline specific quality measure goals that could work regardless of setting and set thresholds for managed care payments to nursing facilities. But Kordomenos said few states are ready to lean that far in with their current D-SNPs.

“Rarely is there one entity or organization that is managing total Medicare and Medicaid risk, which would be the ideal in this integrated model that we put forth in the report,” she explained.

D-SNPs with that “exclusively aligned enrollment” are financially responsible for the full spectrum of Medicare and Medicaid experiences and so are less likely to cost-shift across the two programs, the report said. But not all D-SNPs are federally required to operate with exclusively aligned enrollment.

Kordomenos said states could use their State MedicaidAgency Contract to require alignment, but that demands significant state investment and infrastructure. And being able to generate data needed to make such value-based plans functional can also be costly for providers, especially uninitiated mom-and-pops, Kordomenos added.

On the other hand, she said, a well-thought out, fully-integrated plan could make managed care easier in some ways; the report suggested states limit the number of plans covering long-stay nursing home residents, reducing overwhelming plan choices for residents and lessening prior authorization, billing and other administrative burdens for providers.

In any case, she encouraged CMS to push forward in bringing states to the table for the sake of both patients and facility leaders.

“An integrated Medicare-Medicaid model should reduce complexity for residents and their families as well as reduce the administrative burden for nursing facilities and managed care plans,” Kordomenos wrote. “In the current environment, residents and family members must navigate across services, clinicians, settings, and sometimes between nursing facility and plan coordination staff. At the same time, nursing facilities typically work with many different health plan organizations, each with distinct credentialing requirements, prior authorization rules, formularies, value-based models, and claims submission processes.”