Effect of Medicaid coverage generosity on downstream health care use among dual beneficiaries with psychiatric and physical disabilities

Background. Eligibility for dual Medicare and Medicaid coverage among working-age adults is a function of low-income and the presence of long-term disability, most commonly a serious mental illness. While duals represent a disproportionately expensive population for both programs, there has been little consideration of the potential effects of Medicaid coverage generosity during the “pre-dual” period on health care outcomes for individuals once dually enrolled. Working-age dual enrollees acquire Medicare coverage and thus “dual status” after a period of up to 24 months of Medicaid-only enrollment. During this waiting period Medicaid fee-for-service coverage, including demand- and supply-side attributes, varies across states. This variation is likely to persist because key provisions of the Affordable Care Act and the recent mental health parity law do not currently extend to this population: 1) parity between medical and mental health/substance use disorder (MHSUD) coverage is not assured; and 2) while the Social Security Act stipulates the type of services that Medicaid must cover, it does not address service quantity/duration.

Aims:  We exploit the transition from Medicaid-only coverage to more generous dual coverage in two states to examine separately the effects of annual outpatient visit limits for psychotherapy and medical care (in South Carolina), and relatively low physician reimbursement (in Missouri) during the Medicaid-only period on post-transition health care use.

Sample:  The cohort of “transitioners” includes 16,887 non-elderly adults with a psychiatric or physical health disability, with at least six months of dual enrollment immediately preceded by at least one month of Medicaid-only coverage. The analytic sample includes 533,633 person-months from 2004-2007.

Design:In each state, we will use an interrupted time series design to identify changes in the level and trend of study outcomes following transition to dual coverage relative to the Medicaid-only period.  We will include a comparison group of disabled, non-elderly, dual enrollees that did not transition during the study period to control for within-state secular trends in the outcomes.

Data: We merged Medicare and Medicaid enrollment data to medical and pharmaceutical claims for dual beneficiaries in SC and MO. Outcomes include total and mental health related outpatient, emergency department (ED), and inpatient care as well as ED and inpatient events for ambulatory care sensitive conditions.

Results.Preliminary analyses indicate a relative increase in total health care use in both states following transition to dual enrollment. In MO, where the Medicaid/Medicare physician fee ratio was roughly 0.56, outpatient visits/month increased 18%; ED visits/month increased 32%; and inpatient days per month increased 11%. In SC, the Medicaid/Medicare fee ratio was 0.89 while the Medicaid annual limit for physician visits was 12 with an additional 12 visits for psychotherapy. We observed a 12% increase in outpatient visits/month; a 12% increase in ED visits/month; and an 11% increase in inpatient days in SC.

Discussion: Findings from this study will provide evidence to state and federal payers regarding the effects of Medicaid program attributes on downstream mental health and medical care use among dually-enrolled beneficiaries.