Alignment of Medicare and Medicaid managed care: Impact on level of care needs for dually eligible enrollees in Arizona

Most dual eligibles in Arizona receive Medicaid services through capitated managed care plans that contract with the Arizona Health Care Cost Containment System (AHCCCS) for acute services only or Arizona Long Term Care System (ALTCS) for acute and long term care. Beginning in 2006, many Medicaid managed care plans in Arizona were approved to operate as Medicare Advantage (MA) Special Needs Plans (SNPs). This allowed duals in Arizona to get their Medicare services through either (1) a SNP operated by their AHCCCS or ALTCS plan (“aligned” arrangements), or (2) a different SNP or MA plan or Medicare fee-for-service (FFS) (“unaligned” arrangments). This study explores whether aligning Medicare and Medicaid coverage under a single managed care entity slows transitions to a nursing home level-of-care (movement from AHCCCS to ALTCS) and reduces nursing home admissions. We examine these outcomes using Medicaid enrollment and residential placement records and a difference-in-difference regression modeling approach. We include a cohort of Arizona Medicaid beneficiaries enrolled between 2005 and 2010 in one of five AHCCCS plans (N=49,409) or two ALTCS plans (N=6,440) that offered a SNP in their county beginning in 2006. Because strong financial incentives for ALTCS plans have already kept many beneficiaries in the community (64% in 2006) regardless of alignment status, our results will demonstrate the degree to which the improved care coordination possible in aligned arrangements has allowed SNPs in Arizona to further reduce the likelihood of transitioning to plans or settings that provide higher levels of long-term care.