Persistence and Drivers of High-Cost Status Among Dual-Eligible Medicare and Medicaid Beneficiaries

Background: Little is known about the persistence of high-cost status among dual-eligible Medicare and Medicaid beneficiaries, who account for a substantial proportion of expenditures in both programs. Objective: To determine what proportion of this population has persistently high costs. Design: Observational study. Setting: Medicare-Medicaid Linked Enrollee Analytic Data Source data for 2008 to 2010. Participants: 1 928 340 dual-eligible Medicare and Medicaid beneficiaries who were alive all 3 years. Measurements: Medicare and Medicaid payments for these beneficiaries were calculated for each year. Beneficiaries were categorized as high-cost for a given year if their spending was in the top 10% for that year. Differences in spending were then examined for those who were persistently high-cost (all 3 years) versus those who were transiently high-cost (2008 but not 2009 or 2010) and those who were non-high-cost in all 3 years. Results: In the first year, 192 835 patients were high-cost. More than half (54.8%) remained high-cost across all 3 years. These patients were younger than transiently high-cost patients, with fewer medical comorbidities and greater intellectual impairment. Persistently high-cost patients spent $161 224 per year compared with $86 333 per year for transiently high-cost patients and $22 352 per year for non-high-cost patients. Most of the spending among persistently high-cost patients (68.8%) was related to long-term care, and very little (<1%) was related to potentially preventable hospitalizations for ambulatory care-sensitive conditions. Limitation: Potential misclassification of preventable spending and lack of detailed clinical data in administrative claims. Conclusion: A substantial majority of high-cost dual-eligible beneficiaries had persistently high costs over 3 years, with most of the cost related to long-term care and very little related to potentially preventable hospitalizations.