Background and Challenge

“Dual eligibles” receive both Medicare and Medicaid benefits by virtue of their age or disability and low income. The dual eligible population is diverse and includes individuals with multiple chronic conditions, physical disabilities, mental illness, and difficulties with activities of daily living. According to the Medicare Payment Advisory Commission (MedPAC), in 2009, dual eligibles accounted for 19% of Medicare beneficiaries, but 34% of Medicare spending, and 14% of Medicaid beneficiaries, but 34% of Medicaid spending. Given the high cost of caring for dual eligibles and their complex needs, the federal government and several state governments have collaborated with private payers and providers to develop innovative managed care programs to more effectively manage dual eligibles’ healthcare needs, increase quality, improve outcomes, and reduce healthcare costs.

Against this backdrop, a well-respected health plan with experience in Medicare, but new to Medicaid, engaged L.E.K. to support them in developing a managed care offering for dual eligibles in response to a request for application (RFA) from the state Medicaid agency and Center for Medicare and Medicaid Studies (CMS).

Approach and Recommendations

L.E.K. collaborated with the health plan’s leadership across key functional areas to assess the market opportunity, design the dual eligibles managed care program, and develop a detailed implementation plan. Key elements included:

  • Assessment of the addressable market to size the opportunity and identify high priority geographies
  • In-depth competitor profiling and consolidation of best practices by function from leading payers and providers in the dual eligible space
  • Development of a best-in-class care model with robust care management programs, workflows, and a staffing model to exceed regulatory requirements
  • Analysis of care management investment requirements and estimated utilization and healthcare cost savings
  • Identification of key provider partners in each market and development of the provider value proposition and compensation models
  • Documentation of detailed operational and regulatory requirements for approximately fifteen functions (e.g., claims, enrollment, member service, risk adjustment, etc.) and gap identification relative to the health plan’s existing capabilities
  • Development of a detailed implementation plan and issue log
  • Coordination of the health plan’s response to the state’s RFA, including serving as the primary author for multiple key sections and seamlessly integrating contributions from the health plan’s team

Results

The health plan’s executive leadership approved L.E.K.’s recommended program design and committed to the significant investment required to develop the enhanced care management program and supporting operations necessary to serve dual eligibles. Working in close collaboration with key client stakeholders, L.E.K. assisted the health plan with its successful RFA submission, and the health plan’s dual eligibles product launched successfully in 2013 in one market.  The health plan subsequently expanded to ten additional markets and increased its total market share nearly 15x in the second year of operations.