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Challenges Managing High-Expenditure Medicaid Beneficiaries

September 16, 2019

Social determinants of health, including transportation and housing, are creating obstacles in managing chronic conditions and high-expenditure Medicaid beneficiaries, according to a report published by the United States Government Accountability Office (GAO) on Monday.
With the goal of examining state and federal efforts to manage costs and improve care coordinating for Medicare beneficiaries, GAO interviewed health care officials from CMS, Medicaid officials from Indiana, Nevada, Pennsylvania, South Carolina, South Dakota, Vermont, and Washington, as well as five managed care organizations.

“We previously reported that a small share of beneficiaries in each state collectively accounted for a disproportionately large share of total Medicaid expenditures,” stated the report. “We found that in fiscal years 2009 through 2011, the most expensive 5% of Medicaid beneficiaries consistently accounted for almost half of the expenditures for all Medicaid beneficiaries.”

Focusing on these beneficiaries, the report showed that many state programs turn to managed care to manage costs but struggle to address social determinants of health, resulting in higher, potentially unnecessary costs.

In their interviews, GAO found that all officials took at least one approach to predict high expenditure beneficiaries using risk scores and statistics, as well as used care management to manage the costs and quality of care. Some state officials mentioned “strategies involving coverage policies, payment incentives, and restrictions on the number of providers certain beneficiaries could use.”

Officials noted that in order to improve care coordination and beneficiaries’ management of care, care managers need to address gaps in care or social determinants that prevent a patient from getting the care needed.

“For example, officials from one MCO described a beneficiary with diabetes, who, despite consistently filling his prescription and adhering to his care plan, regularly visited the emergency department in insulin shock,” explained the report. “Through outreach they discovered that the beneficiary could not appropriately store his prescribed insulin, which needed to be refrigerated, because his home did not have running electricity or a refrigerator. The MCO identified resources in the community to provide a refrigerator and restore electricity.”

Other significant challenges included difficulties contacting a beneficiary, which could be the result of missing or outdating information, or treating the homeless population. Staff shortages, especially in rural areas, were also cited as a hinderance to managing care for beneficiaries.

The report continued, “…states and MCOs can face challenges to addressing social determinants of health, such as lack of data on social determinants of health and a lack of understanding about the effect of social determinants of health on health care utilization, which if available could help bolster program investments in those areas.”

GAO’s report offers several suggestions, including coordinating with CMS and using provided resources to better target and manage high-expenditure beneficiaries. These include the Medicaid Innovation Accelerator Program and the Medicare-Medicaid Data Integration Initiative.

—Edan Stanley

US Government Accountability Office. MEDICAID: Efforts to Identify, Predict, or Manage High-Expenditure Beneficiaries. GAO-19-569. Published August 13, 2019. Accessed September 16, 2019.

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