As the population ages, long-term care has been an issue to many Americans and has affected health care spending.  Medicare and Medicaid are two primary sources for long-term care services to provide medical services and chronic nursing home services for elderly.  Medicare is the federal social insurance program created in 1965 for the people age 65 or older and young people with certain disabilities.  Medicare beneficiaries who have limited income and resources, referred to as "dual-eligibles", may get help paying for their Medicare premiums and out-of-pocket medical expenses from Medicaid, jointly funded by state and federal governments.  

            Medicare pays for acute care services and Medicaid pays for the institutional long-term care services for dually eligible individuals. In other words, for dual eligible population Medicare supports coverage of hospitalization and Medicaid provides nursing home care.  Since Medicaid and Medicare each cover certain aspects of care and their funding sources are different, they have little incentive to substitute care in low-cost settings for care in high-cost settings.  For example, residents of nursing homes are often hospitalized, with roughly one in four long-stay nursing home residents hospitalized annually.  Many of these residents could be treated instead in the nursing home, and because hospitals are much more expensive, the total cost would be lower if unnecessary hospitalizations were avoided.  In addition, the separate payment system between Medicaid and Medicare causes "moral hazard" problem.             

            Although studies demonstrate that the preventable hospitalization causes higher healthcare spending,  few studies examine the underlying ideas of practitioners and the processes of this tension.  This paper explores (1) the state government officers' perspective for preventable hospitalizations of dual eligible population, (2) the tensions between the federal government and state government spending for long-term care, and (3) potential strategies and implications for better way of efficient resource allocations.  In order to examine our research question, semi-structured interview will be used.  For the analysis, this study will use a theoretical saturation method, developing and coding grounded theory until we reach a point where there is no further point in reviewing data.  This will be iterative data collection and analysis process. We will build a constant comparative model by reviewing and coding data line by line to refine existing codes and identify new codes.  We will use purposeful sampling of government officers in the Department of Health in New York State.  Sample will evolve as the project continues, and sample size will be determined by theoretical saturation process. NVivo will be used.

            This paper will begin with literature review, data and methods and procedure. The second section will present findings from analysis of data from the interview focusing on concepts discussed above. This paper will conclude with a discussion and policy implications for the research and long-term care practice.