Enrollees in both Medicare and Medicaid, called dual eligibles, are the most expensive and vulnerable group of beneficiaries. More than 40 percent of dual eligibles have severe cognitive disabilities, are likely to have severe physical disabilities, and have higher rates of chronic disease, such as diabetes and Alzheimer’s. All dual eligibles have low incomes, and most are more than 65 years old.

Consumer protections play an important role in helping dual eligibles navigate the complex and intertwined system. Protections include limits on health plan marketing to enrollees, and requirements to ensure access to adequate provider networks. Dual eligibles are enrolled in a variety of care delivery models, from traditional fee-for-service Medicare and Medicaid, to Medicaid managed care, to private Dual Special Needs Plans (D-SNP) through Medicare Advantage (MA). Some dual eligibles are enrolled in unmanaged fee-for-service in one program and a health plan for benefits in the other program.  Different types of FFS and managed care programs, and different states, have varied consumer protection requirements, which the Centers for Medicare and Medicaid Services (CMS) and state Medicaid directors enforce.

GAO Report Shows Varied Consumer Protection Requirements:

In a recent report, the Government Accountability Office (GAO) compared consumer protections and disciplinary actions for fee-for-service Medicare and Medicaid with those of Medicare Advantage and Medicaid health plans, which provide managed care. The report draws data from four state Medicaid programs, in Arizona, California, Minnesota, and North Carolina.

A quick overview of the GAO’s findings:

  • Although enrollment in a Medicare Advantage managed care plan is always voluntary, some states require all beneficiaries to enroll in Medicaid managed care.
  • Provider network adequacy requirements vary by program and by state: Medicare Advantage plans in rural counties must have at least one primary care provider per 1,000 beneficiaries. California, however, requires one primary care provider per 2,000 Medicaid beneficiaries, and other states set their own network parameters.
  • Beneficiaries face different appeals processes, after benefits are denied or reduced, for Medicare and Medicaid in different states.
  • Both CMS and state Medicaid agencies took a range of disciplinary actions related to consumer protection against health plans serving dual eligibles.
The Business Case for Medicare-Medicaid Health Plans:

The web of consumer protection requirements might be tricky for health plans interested in jumping into the dual eligibles market, worth an estimated $350 billion in health care spending for fiscal year 2013. But those who do will find good business opportunities, particularly for health plans with integrated care that improves outcomes and reduces costs. D-SNPs already are part of new integrated Medicare-Medicaid health plan demonstrations in several states.

For more information on the dual eligibles market, see this pair of reports from Sellers Dorsey: The first describes the basics of the dual eligibles market. In the second briefing, senior consultants Mike Fox and Kip Piper lay out the risks and opportunities health plans should consider when deciding whether to enter the Medicare-Medicaid plan business. You can watch the 90-minute briefing online for free.