The role of social, cognitive, and functional risk factors in medicare spending for dual and nondual enrollees

The Centers for Medicare and Medicaid Services is increasingly focused on value-based payment programs, which tie payment to performance on quality and cost measures. In this context, there is rising concern that such programs systematically disadvantage providers that care for vulnerable populations, such as the poor, by holding the providers accountable for factors beyond their control that influence patient outcomes and utilization. In this nationally representative study of Medicare beneficiaries, we found that dually enrolled Medicare beneficiaries (those also enrolled in Medicaid) had strikingly higher levels of medical, functional, and cognitive comorbidities, as well as social needs, compared to their non–dually enrolled counterparts. Dual enrollees also had significantly higher annual costs of care. Including functional, cognitive, and social factors in cost prediction, in addition to risk factors derived from medical claims, improved risk prediction and decreased differences between dual and nondual enrollees. Medicare could consider such adjustment to improve accuracy and fairness in value-based payment programs.