Historically, categories of Medicaid eligibility included  pregnant women, low-income children and their parents, individuals who  are aged, and individuals with disabilities. The research also indicates that there is a subset of Medicaid-only  beneficiaries who are very costly, such as those with institutional care  needs or chronic conditions. beneficiaries (less than 1 percent of the total Medicaid population) and  21.9 percent of total Medicaid expenditures on other dual-eligible  beneficiaries (13.8 percent of total Medicaid beneficiaries). We found that about two-thirds of the high-expenditure group was  comprised of beneficiaries who were eligible for Medicaid due to  disability. In  contrast, payments to managed care organizations and premium  assistance constituted the largest proportion of expenditures for all other  Medicaid-only beneficiaries. In contrast to high- expenditure Medicaid-only beneficiaries, the largest share of total  expenditures for all other Medicaid-only beneficiaries was for managed  care and premium assistance (57.2 percent), followed by non-hospital  acute care (16.6 percent), hospital services (11.9 percent), drugs   (9.7 percent) and LTSS in non-institutional settings (4.5 percent). 3.) He was indicated to have  diabetes, a mental health condition, and  resided in a long-term care facility. Over 73 percent of expenditures for the Medicaid-only aged  were for those in the high-expenditure group. Spending on these services comprised almost 80 percent of  the total expenditures for beneficiaries with expenditures within the top   1 percent for their state. Agency Comments

HHS reviewed a draft of this report and provided technical comments,  which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology

This appendix describes the methodology for addressing three objectives  that examine: (1) states’ spending for high-expenditure beneficiaries, both  Medicaid-only and dual-eligible beneficiaries, compared with other  Medicaid beneficiaries; (2) the characteristics associated with high- expenditure Medicaid-only beneficiaries; and (3) the services that  contributed to high expenditures for Medicaid-only beneficiaries, and how  they compared with service usage by all other Medicaid-only  beneficiaries. We analyzed data from the fiscal year 2009 Medicaid Statistical  Information System (MSIS) Annual Person Summary File. To examine the characteristics associated with high-expenditure  Medicaid-only beneficiaries, we determined the percentage of high- expenditure Medicaid-only beneficiaries with key characteristics and used  logistic regression to examine the effect of having key beneficiary  characteristics on the probability of being a high-expenditure Medicaid- only beneficiary. All  probabilities were significant at the 0.05 level. We report percentages that describe the high-expenditure  In order to determine which service categories contributed to  expenditures for high-expenditure Medicaid-only beneficiaries, we  examined how total expenditures for high-expenditure Medicaid-only  beneficiaries were distributed among the following six expenditure  categories: (1) hospital care, (2) non-hospital acute care, (3) drugs,   (4) managed care and premium assistance, (5) long-term services and  supports (LTSS) in non-institutional settings, and (6) long-term services  and supports in institutional settings.
Why GAO Did This Study

Medicaid is an important source of health coverage for millions of low-income individuals. Research on Medicaid has demonstrated that a small percentage of beneficiaries account for a disproportionately large share of Medicaid expenditures. Understanding states' expenditures for high-expenditure populations—both those dually eligible for Medicare and Medicaid, and those who are Medicaid-only—could enhance efforts to manage Medicaid expenditures.
GAO was asked to examine the demographics and service usage of Medicaid beneficiaries, particularly those who are not eligible for Medicare. This report examines high-expenditure Medicaid-only beneficiaries, considering (1) states' spending on them compared with all other Medicaid beneficiaries; (2) their key characteristics; and (3) their service usage compared with all other Medicaid-only beneficiaries.
GAO analyzed beneficiary and expenditure data from the Medicaid Statistical Information System Annual Person Summary File for 2009, the most recent year available at the time GAO conducted its work. GAO defined high-expenditure beneficiaries as those with total expenditures in the top 5 percent of expenditures within each state. GAO combined these data at a national level, and analyzed the characteristics associated with being a high-expenditure beneficiary, the probability of being a high-expenditure Medicaid beneficiary, and what services contributed to high expenditures.

What GAO Found

In fiscal year 2009, states spent nearly a third (31.6 percent) of all Medicaid expenditures on the most expensive Medicaid-only beneficiaries, who were 4.3 percent of total Medicaid beneficiaries. States spent another third (33.1 percent) on all other Medicaid-only beneficiaries, who represented 81.2 percent of total Medicaid beneficiaries. Among dual eligible beneficiaries, a similar pattern existed, with a small proportion of the population accounting for a disproportionate share of expenditures.
Certain characteristics significantly increased the probability of being a high-expenditure Medicaid-only beneficiary. Specifically, the results of GAO's analyses indicate that the probability of being a high-expenditure Medicaid-only beneficiary was:
24.4 percent for those residing in a long-term care facility,
20.8 percent for those with human immunodeficiency virus/acquired immunodeficiency syndrome,
18.3 percent for those with disabilities, and
13.3 percent for new mothers or infants.
Overall, hospital services and long-term services and supports in non-institutional and institutional settings comprised nearly 65 percent of the total expenditures for high-expenditure Medicaid-only beneficiaries, with smaller proportions for drugs, payments to managed care organizations and premium assistance, and non-hospital acute care. In contrast to high-expenditure beneficiaries, payments to managed care organizations and premium assistance comprised 57.2 percent of total expenditures for all other Medicaid-only beneficiaries.
HHS provided technical comments on a draft of this report, which were incorporated as appropriate.