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  • Governor's Communications Office, 360-902-4136

Gregoire, Sebelius announce Medicare-Medicaid savings

For Immediate Release: July 8, 2011

Gov. Chris Gregoire and Health and Human Services Secretary Kathleen Sebelius jointly announced a partnership today that will allow the state to access greater savings for patients who use both Medicare and Medicaid, also known as “dual eligibles.”

There are about 135,000 dual eligibles in Washington state. These patients make up about 12 percent of Medicaid’s caseload but, facing serious health challenges, account for 34 percent of its spending. Washington state has launched an ambitious plan to better integrate their care from Medicare and Medicaid, which will save money and help patients. For example:
• When the state invests in community-based alternatives to nursing homes, the Medicare program saves $1,678 for every month a Medicare-paid nursing home stay is avoided.
• Medicare saves $502 a day on average for every day avoided in a psychiatric hospital in-patient stay when the state provides more appropriate levels of crisis stabilization.
• Medicare saves $1.5 million for every month the state invests in a health home that meets the criteria for high medical cost risk.

Traditionally, the federal government keeps any Medicare savings found among dual eligibles, even if the savings are a result of the state’s actions. But for the first time, it will allow Washington to access a portion of these savings. The reason for this change is simple: Medicare and Medicaid’s incentives to reduce costs can conflict and don’t necessarily align for the most effective, least costly care. Aligning both programs will save money, improve patient care and provide the state a greater incentive to innovate on behalf of its dual eligibles.

While the federal government has not announced how it will calculate the amount it allows the state to access, Washington spent $1 billion on care for dual eligibles in 2008, so the potential for savings is significant.

“Our goals are to improve care for Medicare-Medicaid patients and to cut costs for taxpayers,” Gregoire said. “Medicare-Medicaid patients receive care from a system that is fragmented and not connected. Breaking down these barriers will result in fewer redundant and avoidable prescriptions, medical procedures and visits to the doctor, which is good for patients and taxpayers. By allowing some of the savings found in Medicare to stay in Washington, Secretary Sebelius is creating a powerful incentive for the state to keep innovating and improving patient care.”

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