for services provided by non-physicians, except under limited circumstances (Lawlor, 2007). Legislation to provide reimbursement to physicians, social workers, or others for medical care management has been proposed but not passed (Cigolle et al., 2005).

Although older adults are more likely to see a primary care physician than any other type of physician, Medicare payment levels serve as a deterrent to the practice of primary care. The Medicare reimbursement system allocates more generous payments for procedures and specialist services—a policy that some have suggested discourages physicians from entering primary care practice (ADGAP, 2007a; Guterman, 2007; LaMascus et al., 2005). Medicare does not have a risk adjuster to account for the additional time and complexity involved with treating frail, older patients. Patients with complex health care needs are more likely to be found in geriatricians’ practices. Geriatricians and geriatric psychiatrists rely heavily on Medicare reimbursement for their income, and surveys indicate that they have lower incomes on average than almost every other type of physician (ADGAP, 2004), which may further discourage physicians from specializing in geriatrics.

Medicare’s teaching and supervision guidelines for resident physicians also make it difficult to collect reimbursement for services provided in the home and in nursing-home settings, which may limit training opportunities outside of the hospital setting (Warshaw et al., 2002). For example, a faculty preceptor must accompany a resident to the setting in order for the clinician to receive reimbursement for the visit; few residency programs can accommodate this one-on-one teaching (Mold, 2003). The vast majority of Medicare graduate medical education (GME) support is directed to physician training, though some funding is available to hospitals for the training of nurses and other health care professionals (MedPAC, 2001).

Other problems exist with Medicaid. While states are working to expand home- and community-based long-term care services, a bias remains toward institutional settings, especially nursing homes (Wiener, 2007). As a result, beneficiaries often can receive only nursing home care, even when they would prefer community-based services. Additionally, nursing home providers contend that low Medicaid payments challenge their ability to provide high-quality care. The integration of services between Medicare and Medicaid for more than 7 million dually eligible individuals is especially difficult (Holahan and Ghosh, 2005; Tritz, 2005; Wiener, 1996). The lack of coordination between the programs often results in inefficiencies and fragmented services for the most vulnerable members of the older population. For example, while Medicare has a financial incentive to shift dually eligible patients into a Medicaid-funded long-term-care facility, Medicaid has an incentive to shift beneficiaries toward Medicare-funded hospital stays (Tritz, 2006).

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