Developing models to predict persistent high-cost cases in Florida Medicaid

Abstract

This paper examined individual characteristics associated with being a high-cost case in multiple years for Medicaid-covered health care services. In addition, the accuracy of models that predict future persistent high-cost cases was examined. Florida Medicaid claims from 2005 to 2010 were used to examine characteristics, diagnoses, and services associated with individual costs being in the top 1% of recipients. Regression models were estimated with diagnoses and service use in a base year used to predict future high-cost cases. Several different perspectives were used that focus on predicting current year high-cost cases based on prior persistence, predicting future persistence of high costs, and a combination of using past persistence to predict future persistence. Average annual costs for persistent high-cost cases were more than $140,000. Overall, models were predictive of future high-cost cases. The receipt of intermediate case facility (mental retardation) services was the strongest predictor of future high-cost cases. Inpatient, outpatient, pharmacy, and nursing home services, along with diagnoses, all provided important information for predicting high-cost cases. Diagnosis-based models in conjunction with prior costs can predict future high-cost cases with a high degree of accuracy. However, given that many high-cost cases reside in intermediate care facilities, it is not clear that such individuals would benefit from intensive case management. Service use patterns in prior years, diagnoses, and prior costs should all be used to identify individuals who may benefit from intensive case management.