Everybody wants to do a better job coordinating care for the frail elderly and younger adults with disabilities who have extensive medical and personal care needs. But just how to do it is becoming increasingly controversial—especially on Capitol Hill.

The current flashpoint is an aggressive new Obama Administration initiative aimed at improving care and cutting costs for those who are very poor and very sick. There are 9 million of these so-called dual eligibles receiving benefits through both Medicare and Medicaid.

Now, some Democrats are worried that states are moving too fast, some independent analysts fear the initiatives are too big, and some insurers fear the program is too narrow.  But despite all the concerns, Melanie Bella, the Obama Administration official in charge of these programs, told the Senate Aging Committee today that they will move forward.

Their most surprising critic may be Senator Jay Rockefeller (D-W. Va), who authored the initiative in the 2010 Affordable Care Act. Now, fearing it would result in lower quality care for this vulnerable population, he’s asked the Department of Health and Human Services to shut down the program until it can be redesigned. A major concern: a provision that would allow states to automatically enroll duals into managed care plans

Oddly, the managed care program was backed at today’s aging committee hearing by the panel’s ranking Republican, Senator Bob Corker (R-TN). In a rare example of a Republican saying something nice about the ACA, Corker pronounced himself “pleasantly surprised” by the way Bella is handling  the new program for the duals.     

The 2010 health reform law made it possible for the Administration to push several key changes in what has, until now, been a poorly designed care system. Currently, Medicare pays for most medical care for this population while Medicaid pays for personal care, or long-term supports and services.

Because the federal government pays for all of Medicare, while states and the feds share the cost of Medicaid, the system discourages the two from cooperating. For instance, if a Medicaid care manager helps keep a patient healthy and out of the hospital, all the savings go to Medicare while the state pays the care manager’s salary.  

To address this and other problems, the ACA gave the Centers for Medicare and Medicaid Services the authority to set up a new office to coordinate regulations, improve data, and set up demonstration projects to learn how to better manage the care of the dual eligibles.

States, desperate for cost savings, have scrambled to propose demonstrations.  Twenty-six have asked CMS to approve major new managed care programs that would cover as many as 3 milllion–or one-third– of the duals. That would make this the largest Medicare demonstration in history.

My Urban Institute colleague Bob Berenson told the aging panel that these experiments would be far too big, with many aimed at covering all of the duals in a particular state.  This, he fears, would make the programs “too big to fail” even if they did not succeed in improving patient care and saving money.  His other worry: Medicaid managed care companies have little experience in caring for dual eligibles, many of whom have very complicated medical conditions.

Bella said CMS has not approved any demonstrations yet, would probably limit them to about 2 million beneficiaries, and establish national quality standards against which to measure their success. But one thing is clear: the idea of coordinating care for those who need both medical care and long-term care is on its way to becoming an important trend.

The overuse of antipsychotic drugs “is one of the most common and longstanding, but preventable practices causing serious harm to nursing home residents today,” Toby Edelman of the Center for Medicare Advocacy told the Senate Aging Committee last week.

She said these drugs are often used off-label (that is: for purposes other than the ones for which the FDA approved them) and that overuse both costs Medicare hundreds of millions of dollars and harms patients.  

Last year, an investigation by the federal Department of Health & Human Services inspector general found that 14 percent of nursing home residents were prescribed anti-psychotics but 8 in 10 were off-label, and, thus, not for treatment of mental illness.

Still, this is not a simple issue. Sometimes, aides cannot provide basic hygiene for dementia patients without the use of these meds. Patients can be too violent or agitated for an aide to change their diaper or bathe them.

Edelman said the Center is not opposed to all uses of these medications but rather wants nursing facilities to try other solutions first.  

Alternatives to drugs can be time consuming and may require special skills. For example, a patient may react poorly to a specific aide—not because the aide is not competent but because there is something about her that triggers agitation. A nursing home can figure this out and make adjustments. But it takes time and training.

Similarly, many dementia patients resist being given a shower, so bed baths may reduce agitation and be more appropriate. Yet, this too requires taking the time to understand why the patient or resident is uncomfortable and finding a better solution.  

Alternative therapies, such as music and other non-pharmacologic solutions,  may also work, although we need more evidence-based research to know for sure.

Dr. Jonathan Evans, the incoming president of the American Medical Directors Assn., urges that caregivers learn ways to better understand why a patient’s behavior changes and to address the causes.  But, for too many facilities, it is easier to give a patient a pill.

This fall, the Consumer Consortium for Advancing Person Centered Care and the UCLA Luskin School of Public Affiairs, with the support of the U.S. Senate Committee on Aging, will hold a forum on non-drug interventions for people with dementia. The goal will be to develop consensus best practices for the use of non-drug alternatives.  (Full disclosure: I serve as an unpaid member of the leadership council of the consortium’s parent organization).

This initiative follows an Aging Committee hearing last fall on the issue.  The use of anti-psychotics is an important and complex issue. This is an opportunity for medical professionals, nursing facilities, researchers, and consumers to work together to find cutting-edge ways to care for dementia patients in the safest and most effective ways possible.

My best guess is that Congress will formally repeal the CLASS Act in 2012. Already abandoned by the Obama Administration, CLASS has no champion on Capitol Hill and is likely to fall victim to implacable Republican opposition and a lack of Democratic support. Thanks to technical budget rules, Congress can now kill the national, voluntary long-term care insurance program without adding to the deficit.

The Republican-controlled House probably will vote to repeal CLASS next week. But its formal death warrant is likely to be added to a bigger bill—perhaps the extension of last year’s payroll tax cut or some end-of-the-year budget measure. No matter, CLASS has little chance of surviving.

But what next? Are there opportunities to build on the CLASS debacle?

This morning, a group of long-term care experts discussed their ideas at the annual policy research conference of the National Academy of Social Insurance. Speakers included Anne Montgomery, senior policy advisor for the Senate Aging Committee; Steve Edelstein, national policy director of PHI, which represents direct-care workers; and Harvard Medical School associate professor of health policy David Stevenson, who has written extensively about long-term care delivery and financing.

Anne, who remains optimistic despite her many years on Capitol Hill, suggested some relatively small steps to build on what policymakers learned from CLASS. For instance, the Administration still has some modest funding available for a public information campaign to encourage consumers to think about their long-term care needs.

A few years ago, an earlier campaign called Own Your Future did increase public awareness of this issue, though the degree to which it changed people’s behavior (by, say, encouraging them to buy insurance or increase savings) is unknown.

Anne also suggested that the Administration could try to build interest among employers, who do very little to encourage their workers to plan for future long-term care needs. The absence of likely employer participation turned out to be a big flaw in CLASS.

Finally, Anne said it was important to improve consumer projections for buyers of private long-term care insurance. Her boss, Aging Committee Chairman Herb Kohl (D-WI) has introduced a bill (S 159) that takes some steps in that direction.

Like most financing experts, David believes a universal program is probably the only way to solve the participation and adverse selection problems that plague voluntary long-term care insurance.

As I and others have written, a variety of technical changes, such as tightening enrollment standards could improve a voluntary government program. But they are unlikely to generate enough participation to make optional insurance robust policy alternative to Medicaid, which is how the U.S. pays for nearly half of all paid personal care today.

Steve agreed, and called for a mandatory long-term care benefit under Medicare. That makes sense in many ways, but given the federal deficit and the unwillingness of politicians to raise taxes, it is hardly likely any time soon.

The most provocative remarks, however, came from Dr. Joanne Lynn, who has been an outspoken advocate for a fully integrated health system that incorporates both medical and personal care. Why, she asked, should we have a separate system of long-term care (or long-term care financing) at all? That’s a subject for a lot more thought.

The Senate Aging Committee held an important hearing today on Continuing Care Retirement Communities (CCRCs) where the panel’s chairman, Senator Herb Kohl (D-WI), urged that both state regulators and the CCRCs themselves provide more information about their financial risks to residents, as well as other consumer protections. This is what Kohl said:

The fact is that while CCRCs are a good residential option for many retirees, entering into an agreement with one can pose financial risk. ”If these companies are going to take the life savings of seniors, they need to be able to guarantee they will be around to provide the lifetime of care they promise.

There are many models of CCRC, but in several designs residents make large up-front payments, known as entrance fees, in return for the right to stay in the communities throughout their old age. Although many residents believe they are buying their apartments, they usually are only making an interest-free loan to the operator. They have no ownership interest in their units. In most communities,residents are supposed to get some or all of that fee back when they die or move.

These facilities are becoming increasingly popular. Today, almost 750,000 seniors live in 1,800 communities.

However, some high-profile CCRC operators have failed lately, raising questions about the security of these deposits. In some communities, residents only get back their entry fees when their unit is re-occupied and if the next resident pays a fee at least as large as they did. 

As a result, residents often bear the risk that their unit may drop in value but, because they are never owners, they have no opportunity to share in any gains. Units can lose value if management changes hands, if a more attractive competitor opens in the same area, or if a poor economy makes it difficult for new residents to find the financial resources they need to move in–the circumstance that many face today.

Kohl did not propose additional federal regulation, but instead urged states to increase their oversight. Because CCRCs combine independent, assisted, and skilled nursing facility living, they often fall between the regulatory cracks. The federal government regulates the nursing facilities, and states may oversee assisted living. But independent living are usually unregulated.

As Kohl says, CCRCs can be an attractive option for many well-to-do seniors, but residents need more protections against the possibility that the operators may fail.