Where the Money Goes: Understanding Medi-Cal’s High-Cost Beneficiaries
The Lewin Group and Ingenix Government Solutions
July 2010
In fiscal year 2009, California spent a total of $47 billion on Medi-Cal, the state’s Medicaid program. As is common with other states’ Medicaid programs and health insurance generally, spending was highly concentrated among a small number of beneficiaries: Seven percent of Medi-Cal beneficiaries accounted for more than three-quarters of fee-for-service program expenditures in fiscal year 2008.
Understanding this small but expensive group of beneficiaries is essential if California is to slow the growth of Medi-Cal spending, which accounts for an increasing share of the state budget. Although there is no single definition of a high-cost beneficiary, the analysis in this data snapshot considers high-cost beneficiaries as individuals who had Medi-Cal fee-for-service claims costs in 2008 of $10,000 or more.
Among the key findings:
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High-cost beneficiaries are a diverse group, spanning the age spectrum and presenting a wide array of physical and mental health conditions.
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Most cases are not a function of episodic or catastrophic care; high-cost beneficiaries tend to have continuous Medi-Cal coverage and incur high claims for at least three years.
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Among those with costs greater than $10,000, nearly two-thirds have multiple conditions and more than one-third have co-occurring physical and mental health conditions.
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Nearly half of high-cost Medi-Cal beneficiaries have Medicare coverage.
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Long term care is a primary cost driver for high-cost Medi-Cal beneficiaries with Medicare coverage, whereas inpatient hospital admissions drive expenditures for those without Medicare coverage.
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Annual expenditures for the 1,000 most-costly beneficiaries averaged $502,465 per person.
The analysis concludes that new approaches are needed to better integrate physical health, mental health, and long term care services for the high-cost population, and offers several recommendations for managing and coordinating care more effectively.
The complete snapshot is available as a Document Download. Also available is an Excel file showing the aggregated data that lies behind the individual slides.