Report: Arizona Managed Care Model for Seniors Performs Better than Fee-For-Service

Coordinated care models for seniors who are dually eligible for Medicare and Medicaid deserve consideration among healthcare policymakers, finds a July 2012 Avalere Health LLC report conducted on a managed care plan in Arizona that’s under contract with the Centers for Medicare & Medicaid Services (CMS).

CMS’s initiative toward coordinated, integrated care for dual eligibles has prompted 26 states to test different models, including contracting with managed care organizations or integrated provider networks. One such managed care organization is the Phoenix, Ariz.-based Mercy Care Plan, which was established in 1985 and is currently under contract with CMS and the Arizona Health Care Cost Containment System. 

The nonprofit health plan serves more than 340,000 Medicaid, Medicare Special Needs Plan, and developmentally disabled members and is administered by Schaller Anderson, an Aetna company, and Avalere analyzed its care and utilization measures for its members compared to the nationwide fee-for-service Medicare dual eligibles. 


Avalere found that Mercy Care Plan members were more likely to use preventive services and had lower rates of inpatient or emergency department utilization and all-cause readmissions relative to patterns of care for dual eligible populations enrolled in the fee-for-service model of Medicare. 

Findings of the research include a 21% lower hospital readmission rate and 9% less emergency department visits, which can be significant in cost-savings for the Medicare program.



“These findings suggest that Mercy Care’s model of care is successful in keeping people out of the hospital and in lowering readmissions relative to fee-for-service,” Avalere concludes. “Moving forward, the Mercy Care model should receive careful consideration among policy makers looking to improve health outcomes while reducing costs for dual eligible beneficiaries.”

View the analysis here

Written by Alyssa Gerace 

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