* Super committee looking at healthcare cost savings
* Insurers stress better care at lower costs
* States seek more power to pursue Medicaid managed care
By Donna Smith
WASHINGTON, Sept 28 Government health benefits
for some 9 million of the sickest and poorest U.S. citizens
will come under scrutiny from the congressional "super
committee" seeking to cut the nation's debt.
These are Americans who qualify for both the Medicare and
Medicaid programs for the elderly and the poor, based on their
disability, age and low income.
In bureaucratic parlance they are called "dual-eligibles"
and both Democrats and Republicans see their care as one major
area for potential savings. The super committee panel, with six
members from each party, is taking a look at proposals to
reduce spending on this group, a congressional aide said.
Medicare and Medicaid spend about $300 billion a year for
dual-eligibles, about half of whom are under treatment for five
or more chronic conditions like diabetes and hypertension.
While tackling either Medicare or Medicaid has proved
politically unpopular, the higher proportion of cost for
dual-eligibles, and their status may make them an easier
segment for the two parties to agree on.
"If they do anything in the super committee, it seems to me
this is ... such an obvious area," said William Hoagland, a
former Republican aide for the Senate Budget Committee who is
now with the health insurer CIGNA Corp (CI.N).
These Medicare- and Medicaid-eligible patients represent
about 15 percent of enrollees in Medicaid but account for 39
percent of program costs. They also account for 16 percent of
Medicare enrollees and 27 percent of program costs.
President Barack Obama is proposing shifting federal drug
reimbursements for this group to lower Medicaid rates rather
than paying the higher Medicare prices, a move strongly opposed
by the pharmaceutical industry.
Insurance companies and states are pressing for policy
changes to encourage more use of managed care which would in
turn encourage less costly forms of treatment, from closer
scrutiny on the need for specific services to incentives for
Obama's healthcare overhaul created a new office within the
federal Center for Medicare and Medicaid Services to develop
cost-saving models of coordinated care.
Melanie Bella, who heads the new office, told the Senate
Finance Committee last week that it would take time before any
savings are realized.
THE MANAGED CARE OPTION
Cash-strapped states are pushing for more, particularly the
power to put dual-eligibles into managed care plans. They have
won support from the National Association of Medicaid Directors
and officials within the insurance industry.
Emory University professor Ken Thorpe, in a report
sponsored by America's Health Insurance Plans, said up to $125
billion could be saved if all dual-eligibles were placed in
"Once you get them into an integrated system where
everybody's working together, as opposed to a body part by body
part style of managing it, then you can improve care and reduce
costs," AHIP President Karen Ignagni said in an interview.
Democrats and some healthcare advocacy groups say they are
wary of forcing people into managed care plans overseen by a
private insurance industry that has reaped billions in profits
without necessarily improving care or reducing costs.
They want to protect benefits and choice for people who
want to stay in traditional fee-for-service Medicare.
"We need to find ways to reduce the cost of healthcare, not
just cut the benefits that seniors paid for," said Democratic
super committee member Representative Xavier Becerra.
Because Medicare and Medicaid cover different medical
services, care can be fragmented with little checking up on
patients to ensure they are following medical advice and taking
prescribed medicines. Studies have shown that hospital
readmissions among this group are high. Many end up in nursing
homes, which are covered by Medicaid.
Doctors are also fighting a move to lower their
reimbursement rates according to Medicaid's standards for this
group, and warn more patients may just be shut out of
"Medicaid rates are going so low ... that we sort of live
in denial that just because someone is on Medicaid, they are
going to be adequately covered," said Ted Okan, executive
director of the Community Oncology Alliance.
The complexity of these plans also works against a deep
change and it takes time to rewrite federal laws, especially
when it comes to healthcare. The super committee has until Nov.
23 to come up with $1.2 trillion in 10-year budget savings.
Ignagni said the super committee could include proposals to
reduce Washington's bureaucratic hurdles for states that want
to shift more people into managed care plans.
"The super committee could put a wind at the backs of
regulators," Ignagni said adding that regulators are already
moving into the direction of more coordinated and managed care
for this population. Only about 100,000 of the 9 million
dual-eligibles currently are in managed care plans, she said.
(Reporting by Donna Smith; Editing by Michele Gershberg and