Improving the Care of “Dual Eligibles”— What’s Ahead: Page 3 of 3

September 15, 2011

Affordable Care Act Expands Access

ACA expands Medicaid coverage to all individuals with incomes up to 133% of the Federal Poverty Level as of January 2014. The change is likely to affect many Medicare subscribers, with a resultant increase in the number of dual eligibles. Having access to coverage does not guarantee access to care for this patient population, many of whom find it challenging to locate providers—especially primary care providers—who accept Medicaid. ACA seeks to remedy some of the reimbursement issues that discourage providers from accepting dual eligibles.

One issue that has made providers reluctant to take on Medicaid patients is the disparity between what Medicare reimburses for a service and what the state reimburses, which is typically lower and varies greatly from state to state. Despite the fact that dual eligibles have Medicare coverage as well as Medicaid, they still face difficulty locating providers due to the way benefits are coordinated between the two programs.

For dual eligibles, the state is responsible for the 20% cost-sharing amount required of the Medicare beneficiary under Medicare Part B (Medicare pays the remaining 80%). If the amount that the state authorizes a provider to bill for a particular service under its Medicaid plan comes to less than the 80% share of the allowable fee that Medicare reimburses, the state has the option of capping reimbursement at that level, thus not paying the provider for the beneficiary’s 20% coinsurance amount. This could result in a 20% decrease in payment to providers for services to dual-eligible compared to non–dual-eligible Medicare beneficiaries. In addition, this loss cannot be billed to the dual-eligible patient because the law prohibits providers from trying to recoup this amount from the patient. To illustrate how this might work, if the provider is allowed to bill Medicare $100 for an office visit by a dual eligible and the state Medicaid program typically covers this service for Medicaid-only enrollees at $80, the state can pay the provider the $20 coinsurance amount on the beneficiary’s behalf, but it is not obligated to do so because the provider is already receiving an amount (from Medicare) equal to what the state pays its participating providers for that Medicaid-covered service.20

Recognizing the barrier to care that these reimbursement policies pose for Medicaid enrollees, ACA has mandated that starting in 2013 and 2014, reimbursement for primary care services provided under Medicaid be set no lower than the level authorized by Medicare. The act requires the federal government to fund the difference. This change alone is expected to substantially increase reimbursement for primary care services provided to the dual-eligible population in many states, and the hope is that this will translate to better access to primary care for the growing number of Medicaid enrollees anticipated in the coming years.

The Challenges Ahead

The aims of the Medicare-Medicaid Coordination Office and related programs are to improve quality, reduce costs, and improve the beneficiary experience. Of course, making improvements in quality and costs will be challenging. Many of these challenges are addressed in the recently released report, “Medicare and Medicaid Alignment: Challenges and Opportunities for Serving Dual Eligibles.”21

Achieving the goal of reducing costs depends on realizing savings from eliminating wasteful use in excess of the costs for expanding use of currently underutilized services, such as preventive care, and for covering services provided by social workers, pharmacists, and other members of the multidisciplinary team, as seen with the PACE and MSHO models. Although it has been demonstrated that the quality of care and enrollees’ access to services improved under PACE and remained relatively stable under MSHO, research shows that costs for an individual under these programs are higher relative to costs for the same type of individual under the current in fee-for-service Medicare and Medicaid programs.22,23

As health outcomes and longevity improve, Medicare and Medicaid will be responsible for meeting the needs of an ever larger population and bear an even greater financial burden. Thus, there is genuine concern that a failure to reduce overall costs will lead to a retreat from emerging and existing programs that have demonstrated the greatest potential for increasing care coordination and improving outcomes for dual-eligible older adults. Going forward, careful stewardship of resources is vital if these promising programs are to survive.

With improvements in care coordination for dual eligibles, new opportunities are likely to emerge for geriatric providers, especially for those able to meet the complex and challenging needs of this select group of older adults through the implementation of coordinated care strategies. Cautious optimism and watchful stewardship are required, however, as coordinated care programs for dual-eligible older adults are expanded.


The author reports that he currently works for Mercy LIFE and previously worked for NewCourtland LIFE Program, which are Programs for All-inclusive Care for the Elderly (PACE).

Dr. Stefanacci served as a CMS health policy scholar for 2003-2004; is associate professor of health policy, University of the Sciences, Philadelphia, PA; and is a Mercy LIFE physician, Philadelphia, PA. He is also chief medical officer, The Access Group, Berkeley Heights, NJ. 

Dr. Spivack is associate physician editor, Clinical Geriatrics; Medicare medical director, UnitedHealthcare Medicare & Retirement, Westport/Trumbull, CT; founder, Connecticut Geriatrics Society; consultant in geriatric medicine, Greenwich Hospital, Greenwich, CT, and Stamford Hospital, Stamford, CT.



1. Henry J. Kaiser Family Foundation. Kaiser Commission on Medicaid and the Uninsured. The role of Medicaid in state economics: a look at the research. January 2009. Accessed August 18, 2011.

2. Jacobson G, Neuman T, Damico A, Lyons B. The Kaiser Family Foundation Program on Medicare Policy. The role of Medicare for the people dually eligible for Medicare and Medicaid. Published January 2011. Accessed August 18, 2011.

3. US Department of Education, National Center for Education Statistics. The health literacy of America’s adults: results from the 2003 National Assessment of Adult Literacy. September 2006. Accessed August 12, 2011.

4. Ryan J, Super N. National Health Policy Forum. Dually eligible for Medicare and Medicaid: two for one or double jeopardy? 2003. Accessed August 12, 2011.

5. Henry J. Kaiser Family Foundation. Demographic characteristics of dual eligibles, 2006. Accessed August 18, 2011.

6. Kaiser Commission on Medicaid and the Uninsured. Dual eligibles: Medicaid’s role for low-income Medicare beneficiaries. December 2010. Updated May 2011.

7. Henry J. Kaiser Family Foundation. The Kaiser Family Foundation Program on Medicare Policy. The role of Medicare for the people dually eligible for Medicare and Medicaid. January 2011. Accessed August 18, 2011.

8. Henry J. Kaiser Family Foundation. Distribution of Medicaid spending for dual eligibles by service (in millions), 2007. Accessed August 18, 2011.

9. Medicare Payment Advisory Commission. Report to the Congress: aligning incentives in Medicare. Published June 2010. Accessed August 18, 2011.

10. Medicare Payment Advisory Commission. Coordinating the care of dual-eligible beneficiaries. June 2011. Accessed August 12, 2011.

11. Affordable Care Act, HR 3590, 111th Congress, § 2602 (2010).

12. Lambrew JM. Making Medicaid a block grant program: an analysis of the implications of past proposals. Milbank Q. 2005;83(1):41-63.

13. Henry J. Kaiser Family Foundation. Medicare special needs plan offerings by plan type, 2011. Accessed August 18, 2011.

14. Centers for Medicare & Medicaid Services. Medicare Managed Care Manual. Chapter 16-B: Special Needs Plans. Revised May 20, 2011. Accessed August 18, 2011.

15. Centers for Medicare & Medicaid Services. Program of All-Inclusive Care for the Elderly. Revised December 7, 2010. Accessed August 18, 2011.

16. Centers for Medicare & Medicaid Services. Community services and long-term supports: money follows the person. Revised July 12, 2011. Accessed August 18, 2011.

17. Grabowski DC. Special needs plans and the coordination of benefits and services for dual eligibles. Health Aff. 2009;28(1):136-146.

18. Kaiser Commission on Medicaid and the Uninsured. Policy Brief: proposed models to integrate Medicare and Medicaid benefits for dual eligibles: a look at the 15 state design contracts funded by CMS. Published August 2011. Accessed August 18, 2011.

19. Verdier JM; Mathematica Policy Research, Inc. Coordinating and improving care for dual eligibles in nursing facilities: current obstacles and pathways to improvement. March 2010. Accessed August 18, 2011.

20. Mitchell JB, Haber SG. State payment limitations on Medicare cost-sharing: impacts on dually eligible beneficiaries and their providers. Published July 31, 2003. Accessed August 18, 2011.

21. Burke G, Prindiville K. Medicare and Medicaid alignment: challenges and opportunities for serving dual eligibles. National Senior Citizens Law Center. August 2011. Accessed August 18, 2011.

22. Chatterji P, Burstein N, Kidder D, White A. Evaluation of Program of All-Inclusive Care for the Elderly (PACE) demonstration: the impact of PACE on participant outcomes. July 1998. Accessed August 12, 2011.

23. Kane RL, Homyak P, Bershadsky B, Lum T, Flood S, Zhang H. The quality of care under a managed-care program for dual eligibles. Gerontologist. 2005;45(4):496-504.