Managed Care for Medicare-Medicaid Dual Eligibles: Appropriateness, Availability, Payment, and Policy

The bifurcation of responsibility for caring for dual eligibles has helped create a fragmented service delivery system, fraught with administrative inefficiencies, barriers to more effective care, and incentives to shift costs. To better serve this population, the federal government and several states have developed a number of pilot initiatives that promote integration by relying on capitated managed care. However, evidence suggests that this approach may be plagued by certain problems, including lack of experience with persons who are chronically ill, incentives to under provide care, favorable selection, limited plan availability, and mixed outcome and satisfaction performance. Although case-managed approaches pursue integration without capitation, they must typically rely on voluntary provider cooperation to be successful, something that is difficult to achieve. Given the recent nature of most integration initiatives, it is recommended that policy makers continue to promote innovation in each of the following areas: care coordination, administration, provider payment, plan participation, and evaluation.