Lowering Costs, Improving Quality

Three new initiatives to cut down on the high costs of Medicare and Medicaid, while helping to improve the quality of care.

In an attempt to lower the cost of care while improving the quality of it, the U.S. Department of Health and Human Services instituted three initiatives for American eligible for both Medicare and Medicaid.

One program will test financial models

designed to help states improve quality and share in the lower costs that result from better coordinating care for individuals enrolled in Medicare and Medicaid. Another will provide improved help in nursing homes without sending individuals unnecessarily to the hospital. The last is a resource center available to states.

Approximately 9 million Americans are eligible for both Medicare and Medicaid and states and the federal government spend more than $300 billion a year on these individuals. Despite only representing 15% of enrollees in Medicaid, these individuals account for 39% of all Medicaid expenditures.

“By improving care to the most vulnerable of our citizens, we can improve the quality of their lives and prevent wasteful spending,” HHS Secretary Kathleen Sebelius said in a statement. “Governors and their staff have been looking for tools to help them accomplish these important goals. I am pleased that we can continue our strong partnership with the states to do this.”

The Center for Medicare & Medicaid Services will test two models to determine whether they save money while also improving the quality of care. States will then be able to pursue either or both of these models.

In nursing facilities, nearly two-thirds of residents are in Medicaid and most are also in Medicare. To prevent unnecessary hospitalizations, CMS will select independent organizations to partner with and assist interested nursing facilities.

CMS research shows that 40% of hospital admissions were preventable and accounted for $2.6 billion in Medicare expenditures. These partnerships with nursing facilities would

use nurse practitioners in the facilities, support transitions between hospitals and nursing facilities, and implementing best practices to prevent events that lead to poor health outcomes and expensive hospitalizations, such as falls and urinary tract infections.