Medicaid Long-Term Care Programs: Simulating Rate Setting and Cross-Payer Effects
The financing of long-term care has become increasingly more complex as both Medicare and Medicaid seek to serve the dual eligible population. While states are examining ways to support integrated programs of care for duals through capitated payments for Medicaid-covered costs, important questions remain about how Medicare and Medicaid services and costs are related. Using data for 2006 and 2007, researchers from the State of Maryland Department of Health and Mental Hygiene established a framework within which to examine the implications of cross-program effects in long-term care including an array of potential factors that would affect the calculation of capitation payment rates. The researchers accomplished this by: (1) developing a simulation using estimated and actual expenditures to model the full spectrum of public program expenditures for duals; (2) examining how and to what extent providing Medicaid community supports, in particular, may affect the use of Medicare acute care and Medicaid institutional resource use; and (3) exploring how those effects might be applied in setting Medicaid payment rates. The objective of this study was to provide state and federal administrators and policymakers a better understanding of the interactive effects of public programs as efforts in coordinated care evolve.