Trends in Tennessee Medicaid Acute Care: Use and Expenditures, 1974-1978

Because person-level data are not currently available at the Federal level, many questions regarding the use and expenditures of Medicaid services remain unanswered. This article demonstrates the capability of State Medicaid Management Information Systems (MMIS) to provide data that can address a variety of Medicaid program issues at both the State and Federal levels. Using data from the Tennessee Medicaid files, we analyze MMIS data to demonstrate the utility of person-level statistics and to indicate methodologies useful for future analytic efforts, particularly in constructing utilization rates for policy and program management activities. We extracted Medicaid data for this study from person-level enrollment and inpatient hospital claims files, maintained by the Tennessee Medicaid Agency, for the calendar years 1974 through 1978. We used enrollment files to analyze the changing composition of the enrolled population and enrollment turnover by basis of eligibility and demographic characteristics. Because the MMIS files contain unique recipient identifiers, it is possible to link enrollment and claims data at the person level. This linkage facilitates the study of trends in payments and utilization rates by eligibility group over time. The primary utilization measures used in this study are average covered length of stay and admissions and covered days of care rates per 1,000 Medicaid enrollees. We also provide Tennessee Medicare utilization statistics for comparative purposes. Expenditure measures include average annual payments per enrollee, payments per admission, and payments per covered day. We analyze various eligibility groups by demographic characteristics and level of enrollment turnover (the movement of persons on and off eligibility rolls) at both the State and sub-State levels. Finally, we present a series of diagnostic case-mix studies. While total Tennessee Medicaid enrollment is declining, the number of disabled enrollees and the proportion of aged enrollees are increasing. Tennessee Medicaid average covered lengths of stay exhibit a downward trend, but covered days of care rates are increasing due to higher admission rates. Medicaid payments per enrollee increased drastically, primarily due to increases in average payments per day and, to a lesser extent, increased utilization. Medicaid utilization and expenditures are highly skewed toward aged and disabled enrollees and toward those with less than six consecutive quarters of enrollment. Similarly, whites exhibit a disproportionate use of inpatient services. Analyses of diagnostic case-mix indicate stable patterns for both AFDC and disabled enrollees over time. Differences in case-mix and length of stay between the two eligibility groups are consistent with the respective characteristics of these populations.