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Financial and Administrative Alignment Demonstrations for Dual Eligible Beneficiaries Compared: States with Memoranda of Understanding Approved by CMS « » The Henry J. Kaiser Family Foundation

Financial and Administrative Alignment Demonstrations for Dual Eligible Beneficiaries Compared: States with Memoranda of Understanding Approved by CMS

Using new authority in the Affordable Care Act, the Centers for Medicare and Medicaid Services (CMS) is launching demonstrations that seek to improve care and control costs for people who are dually eligible for Medicare and Medicaid.   These three year demonstrations, implemented beginning in July 2013, are introducing changes in the care delivery systems through which beneficiaries receive medical and long-term care services. The demonstrations also are changing the financing arrangements among CMS, the states, and providers. As of July 2014, CMS has finalized memoranda of understanding (MOUs) with 12 states to implement 13 demonstrations:1
  • California, Illinois, Massachusetts, Michigan, New York, Ohio, South Carolina, Texas, and Virginia are testing a capitated financial alignment model;
  • Colorado is testing a managed fee-for-service (FFS) financial alignment model;
  • Washington is testing both a capitated financial alignment model and a managed FFS financial alignment model; and
  • Minnesota is testing the integration of administrative functions without financial alignment.

New York’s proposal to test a capitated model for beneficiaries with developmental disabilities (DD) who require long-term services and supports (LTSS) and proposals from five other states are pending with CMS (Figure 1).

Figure 1: State Demonstration Proposals to Align Financing and/or Administration for Dual Eligible Beneficiaries, July 2014

Figure 1: State Demonstration Proposals to Align Financing and/or Administration for Dual Eligible Beneficiaries, July 2014

This issue brief compares key provisions of the approved demonstrations (summarized in Table 1 with additional details by state in the Appendix).

Table 1: State Dual Eligible Financial/Administrative Alignment Demonstrations Approved by CMS, July 2014
State Estimated Number of Eligible Beneficiaries Target Populationa and Geographic Area Financial Model Earliest Effective Enrollment Date Savings Percentage Applied to Medicare and Medicaid Contributions to Baseline Capitated Rateb
CA 456,000 Adult dual eligible beneficiaries in 8 counties Capitated April 2014 1% minimum,
1.5% maximum in year 1;
2% minimum,
3.5% maximum in year 2;
4% minimum,
5.5% maximum in year 3c 
CO 48,000 Adult dual eligible beneficiaries statewide Managed FFS August or September 2014 N/A (state shares savings with CMS retrospectively if savings and quality criteria met)
IL 135,825 Adult dual eligible beneficiaries in 21 counties grouped into 2 regions Capitated March 2014 1% in year 1;
3% in year 2;
5% in year 3;
MA 90,240 Non-elderly adult dual eligible beneficiaries in 1 partial and 8 full counties Capitated October 2013 0 in 2013,
1% in 2014 (remainder of year 1)d;
2% in year 2;
>4% in year 3e 
MI 100,000 Adult dual eligible beneficiaries in 25 counties grouped into 4 regions Capitated January 2015 1% in year 1;
2% in year 2;
4% in year 3, except that year 3 savings will be 3% if at least 1/3 of plans have losses exceeding 3% of revenues in year 1
MN 36,000 Dual eligible beneficiaries age 65 and over enrolled in the Minnesota Senior Health Options program statewide N/Af September 2013 N/A (Minnesota’s demonstration will test the integration of administrative functions without financial alignment)
NY 170,000 Adult dual eligible beneficiaries in 8 counties who require nursing facility or nursing facility diversion and transition home and community-based waiver services or more than 120 days of community-based LTSSg  Capitated January 2015 1% in year 1;
1.5% in year 2;
3% in year 3, except that year 3 savings will be 2.5% if at least 1/3 of plans have losses exceeding 3% of revenue in year 1h
OH 115,000 Adult dual eligible beneficiaries in 29 counties grouped into 7 regions Capitated May 2014 1% in year 1;
2% in year 2;
4% in year 3;
SC 53,600 Dual eligible beneficiaries age 65 and over statewide who live in the community at the time of enrollment Capitated July 2014 Same as Ohio
TX 168,000 Adult dual eligible beneficiaries with disabilities who qualify for SSI or Medicaid waiver HCBS in 6 counties Capitated March 2015 1.25% in year 1.a;i
2.75% in year 1.b;j
3.75% in year 2;
5.5% in year 3
VA 78,600 Adult dual eligible beneficiaries in 104 localities grouped into 5 regions Capitated April 2014 Same as Michigank
WA 21,000 High cost/high risk adult dual eligible beneficiaries statewide except in 2 urban counties Managed FFS July 2013 Same as Colorado
27,000 Adult dual eligible beneficiaries in 2 urban counties Capitated February 2015 1% in year 1;
2% in year 2;
3% in year 3
Notes:  a See the Appendix for subpopulations excluded from each state’s demonstration.  b Demonstration savings in the capitated models will be derived upfront by reducing CMS’s and the state’s respective baseline contributions to the plans by a savings percentage for each year.   c California’s maximum demonstration-wide savings percentages, along with county-specific interim savings percentages, will be used to determine the demonstration’s risk corridors.  d Massachusetts reduced its 2013 savings from 1% to zero.  Demonstration year 1 in Massachusetts begins in 2013 and runs through December 2014.  e Massachusetts anticipates savings of greater than 4% (approximately 4.2%) in year 3 to make up for forgone savings in year 1.  Minnesota’s administrative alignment demonstration will take place in its existing capitated delivery system in which Medicaid MCOs  also qualify as Medicare Advantage D-SNPs.  g New York’s capitated proposal for beneficiaries who have DD and need LTSS remains pending with CMS.  h This determination will be based on at least 15 months of data (demonstration year 1 in New York encompasses July 2014 through December 2015).  Demonstration year 1.a in Texas is March to Dec. 2015.  j  Demonstration year 1.b in Texas is 2016.  k This determination will be based on at least 20 months of data and in all regions in which plans participate (demonstration year 1 in Virginia encompasses February 2014 through December 2015).
Sources: CMS Financial Alignment Initiative, State Financial Alignment Demonstration Memoranda of Understanding, http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.htmlsee also endnotes 2,3,4,5,6,7,8,9,10

Background

Dual eligible beneficiaries include seniors and non-elderly people with significant disabilities, some of whom are among the poorest and sickest beneficiaries covered by either Medicare or Medicaid.  The predominant existing service delivery models for these beneficiaries typically involve little to no coordination between the two programs.  Dual eligible beneficiaries account for a disproportionate share of spending in the Medicare and Medicaid programs.11  In the case of Medicare, this is mainly due to their relatively poorer health status, which requires higher use of medical services compared to other program beneficiaries.  In the case of Medicaid, dual eligible beneficiaries’ relatively high spending is generally attributable to their greater need for LTSS.

Key Demonstration Provisions

Geographic Area and Target Population

Three states’ (Colorado, Minnesota, and South Carolina) demonstrations are statewide, while the others are limited to certain regions.

The states’ target populations for their demonstrations vary, with eight states (California, Colorado, Illinois, Michigan, Ohio, Texas, Virginia, and Washington’s capitated model) including both elderly and non-elderly beneficiaries.  Among the states targeting sub-populations:

  • Massachusetts targets non-elderly people with disabilities;
  • Minnesota’s administrative alignment demonstration targets elderly beneficiaries;
  • South Carolina targets elderly beneficiaries who live in community-based settings at enrollment;
  • New York focuses on elderly and non-elderly beneficiaries who receive nursing facility services or nursing facility diversion and transition home and community-based waiver services or who require more than 120 days of community-based LTSS;
  • Texas targets elderly and non-elderly beneficiaries with disabilities who qualify for Supplemental Security Income (SSI) benefits or certain Medicaid home and community-based waiver services for seniors and adults with physical disabilities; and
  • Washington’s managed FFS model targets high cost/high risk beneficiaries with chronic conditions.

Michigan is the only capitated demonstration state to include beneficiaries with DD.

Enrollment

Estimated Number of Eligible Beneficiaries

CMS has stated that it plans to limit enrollment in the demonstrations to no more than two million dual eligible beneficiaries nationally.  As of July 2014, CMS has approved 13 demonstrations in 12 states in which an estimated nearly 1.5 million beneficiaries are eligible to enroll.  (Not all beneficiaries who are eligible to participate in the demonstrations are expected to enroll.)  The estimated number of beneficiaries eligible for California’s demonstration is over 30 percent of the total number of beneficiaries eligible for all demonstrations approved to date and exceeds the number of eligible beneficiaries in each of the other states with approved demonstrations.  Enrollment in Los Angeles County, capped at 200,000 beneficiaries, will be greater than the number of beneficiaries eligible to participate in any of the other demonstration states (Figure 2).

Figure 2: CMS Has Approved 13 Financial and/or Administrative Alignment Demonstrations in 12 States, in which Nearly 1.5 Million Dual Eligible Beneficiaries Will Be Eligible to Enroll, as of July 2014

Figure 2: CMS Has Approved 13 Financial and/or Administrative Alignment Demonstrations in 12 States, in which Nearly 1.5 Million Dual Eligible Beneficiaries Will Be Eligible to Enroll, as of July 2014

Enrollment Timeline

Enrollment already has begun in Washington’s managed FFS demonstration (July 2013), Massachusetts (October 2013), Illinois (March 2014), California and Virginia (April 2014), and Ohio (May 2014).  The earliest effective enrollment dates in the other demonstrations are scheduled as follows:  South Carolina (July 2014); Colorado (August or September 2014); Michigan and New York (January 2015); Washington’s capitated demonstration (February 2015); and Texas (March 2015) (Figure 3).  (Minnesota’s administrative alignment demonstration affects beneficiaries who are already enrolled in the state’s Senior Health Options program and began in September 2013.)

Figure 3: Earliest Effective Enrollment Dates in Financial/Administrative Alignment Demonstrations for Dual Eligible Beneficiaries, as of July 2014

Figure 3: Earliest Effective Enrollment Dates in Financial/Administrative Alignment Demonstrations for Dual Eligible Beneficiaries, as of July 2014

Enrollment Process and Beneficiary Choices

Nearly all of the capitated demonstrations (some counties in California, plus Illinois, Massachusetts, Michigan, New York, Ohio, South Carolina, Texas, Virginia and Washington) begin with a voluntary enrollment period in which beneficiaries can “opt in” to the demonstration and select a managed care plan.  The voluntary enrollment period is followed by passive enrollment periods in which the remaining beneficiaries will be automatically assigned to a managed care plan.  In other California demonstration counties, beneficiaries will be automatically enrolled in the demonstration without an initial voluntary enrollment period.  To effectuate passive enrollment, states are to develop “intelligent assignment” algorithms to preserve continuity of providers and services when assigning beneficiaries to plans.

Beneficiaries retain the right to opt out of the demonstration at any time but must take affirmative action to do so.  In all states, beneficiaries can opt out of the demonstration and choose another delivery system (i.e., FFS, Medicare Advantage, Program of All-Inclusive Care for the Elderly (PACE)) for their Medicare benefits.  However, states may seek CMS approval to require beneficiaries to enroll in Medicaid managed care even if they opt out of the financial alignment demonstration for their Medicare benefits, and five states with capitated demonstrations (California, Illinois, New York, Ohio, and Texas) have indicated that they are doing so.  By contrast, five states with capitated demonstrations (Massachusetts, Michigan, South Carolina, Virginia, and Washington) allow beneficiaries who opt out of the demonstration to remain in the FFS delivery system for both their Medicare and Medicaid benefits (Table 2).

Table 2: Beneficiary Enrollment Choices in the Capitated Financial Alignment Demonstrations
State Managed Care Enrollment Required for:
Medicare Medicaida
California No Yesb
Illinois No Yesc
Massachusetts No No
Michigan No No
New York No Yesd
Ohio No Yese
South Carolina No No
Texas No Yesf
Virginia No No
Washington No No
NOTES:  a CMS approval is necessary for states to require beneficiaries to enroll in Medicaid managed care, even if beneficiaries opt out of the financial alignment demonstration for their Medicare benefits.  b California’s § 1115 waiver was amended to require beneficiaries to enroll in managed care plans for their Medicaid benefits, including LTSS.  c Illinois has a draft § 1115 waiver application seeking to require Medicaid managed care enrollment.  d New York’s § 1115 waiver requires beneficiaries in the financial alignment demonstration geographic area who receive more than 120 days of LTSS to enroll in a Medicaid MLTSS plan.  e Ohio’s MOU indicates that the state may seek additional § 1915(b)/(c) waiver authority to require beneficiaries to enroll in Medicaid managed care.  f Texas’s existing § 1115 waiver requires adult dual eligible beneficiaries to enroll in Medicaid managed LTSS.
SOURCE:  KCMU analysis of states’ financial alignment demonstration memoranda of understanding with CMS, available at http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.html.

Given the complexities of the enrollment decision, beneficiaries are likely to need individual in-person options counseling to make their choice.12  Five states (California, Illinois, Massachusetts, Virginia, and Washington) have received CMS funding to date to support beneficiary outreach, education, and options counseling in their demonstrations through their State Health Insurance Program and Aging and Disability Resource Centers.13

In Washington’s managed FFS demonstration, beneficiaries are automatically enrolled in a health home network but retain the choice about whether to receive Medicaid health home services; other Medicare and Medicaid services will continue to be provided on a FFS basis.  Similarly, in Colorado’s managed FFS demonstration, beneficiaries will be automatically assigned to the Regional Care Collaborative Organization in their geographic area to access care coordination services but may disenroll from the demonstration at any time.

Minnesota’s administrative alignment demonstration does not involve passive enrollment; instead enrollment in Senior Health Options plans remains voluntary, although the demonstration will test an integrated enrollment system.

Care Delivery Model

The ten states with capitated demonstrations are using managed care plans to coordinate services for beneficiaries through a person-centered planning process.  Person-centered planning focuses on the strengths, needs, and preferences of the individual beneficiary instead of being driven by the care delivery system.14

Some states require or allow their managed care plans to contract with other entities to provide services in their demonstrations (Table 3).  Massachusetts requires its plans to contract with community-based organizations to provide Long-Term Supports coordinators as independent members of the beneficiary’s care team, Michigan requires its plans to contact with existing Prepaid Inpatient Health Plans (PIHPs) to provide behavioral health services, and Ohio requires its plans to contract with Area Agencies on Aging to coordinate home and community-based waiver services for enrollees over age 60.  (Illinois, New York, South Carolina, Texas, Virginia, and Washington’s capitated MOUs do not include any similar requirements).  California requires its plans to establish MOUs with county behavioral health agencies to provide specialty mental health services and with county social services agencies to coordinate In Home Supportive Services (IHSS).  Demonstration managed care plans in Los Angeles County are subcontracting with other Medicare Advantage plans to offer a variety of benefits packages to enrollees in California’s demonstration.

Washington’s managed FFS demonstration is using Medicaid health home care coordination organizations to manage services among existing Medicare and Medicaid providers, and Colorado will use its existing Medicaid Accountable Care Collaborative program to coordinate Medicare and Medicaid services for beneficiaries in its demonstration.

Minnesota’s administrative alignment demonstration maintains the existing Senior Health Options program delivery system in which Medicaid managed care plans contract with the state and also are qualified as Medicare Advantage Special Needs Plans focused on dual eligible beneficiaries (D-SNPs) under contract with CMS.

Financing

Ten states (California, Illinois, Massachusetts, Michigan, New York, Ohio, South Carolina, Texas, Virginia, and Washington) are testing CMS’s capitated financial alignment model, in which managed care plans will receive capitated payments from CMS for Medicare services and the state for Medicaid services.

Anticipated program savings in the capitated financial alignment demonstrations are deducted up-front from CMS’s and the state’s respective baseline contributions to health plans by a savings percentage for each year (Table 1).  CMS will contribute the Medicare portion of the capitated rate.  The Medicaid portion of the capitated rate includes both the federal and state funding.15  None of the MOUs explicitly states the basis for the savings percentages, although Illinois’ MOU notes that it currently has one of the highest rates of potentially avoidable hospital admissions among dual eligible beneficiaries nationally and one of the highest proportions of spending on institutional services compared to HCBS.  While California’s MOU specifies minimum savings percentages of 1% in year one, 2% in year two, and 4% in year three, it also includes maximum savings percentages of 1.5% in year one, 3.5% in year two, and 5.5% in year three, making the maximum savings percentages in California among highest of the approved demonstrations to date.  Texas’s MOU specifies savings percentages of 1.25% in year 1.a (March to December 2015), 2.75% in year 1.b (2016), 3.75% in year 2, and 5.5% in year 3.

All 10 capitated financial alignment demonstrations include provisions to withhold a portion of the capitated rate that plans can earn back if specified quality measures are met.  California also requires its plans to provide incentive payments from the quality withhold funds to county behavioral health agencies based on achievement of service coordination measures, and Michigan requires its plans to reward the PIHPs that will provide behavioral health services when the plan earns the withheld payment.  South Carolina plans must provide financial incentives to providers that achieve NCQA patient-centered medical home certification.

Two states (Colorado and Washington) are testing CMS’s managed FFS model in which providers will continue to receive FFS reimbursement for both Medicare and Medicaid-covered services.  Any savings in these demonstrations will be determined retrospectively, with the state eligible to share in savings with CMS if savings targets and quality standards are met.

Minnesota’s administrative alignment demonstration will not test one of CMS’s financial alignment models.  Instead, Minnesota’s Senior Health Options program will maintain its existing capitated integrated payment and delivery system arrangements involving Medicaid MCOs that also qualify as Medicare Advantage D-SNPs.  Plans will be allowed to integrate Medicare and Medicaid primary care payments to promote care coordination through health care homes and improved coordination among primary, acute, and LTSS and among physical and behavioral health services.

Benefits

The 10 capitated financial alignment demonstrations include nearly all Medicare and Medicaid services in the plans’ benefits package and capitated payment.  All states include nursing facility services in the plans’ capitated payment and benefits package.  Eight of the 10 states testing the capitated model (Illinois, Michigan, New York, Ohio, South Carolina, Texas, Virginia, and Washington) include beneficiaries who receive services through certain Medicaid HCBS waivers, while two states (California and Massachusetts) exclude all HCBS waiver enrollees from their demonstrations.  Plans are allowed to offer additional benefits, outside the traditional Medicare and Medicaid benefits packages, as appropriate to beneficiary needs.  All states require their health plans to offer beneficiaries the option to self-direct their LTSS (Table 3).

Five of the capitated states require plans to offer additional benefits as part of the demonstration.  Massachusetts plans must offer certain diversionary behavioral health and community support services that are not otherwise covered as well as expanded Medicaid state plan benefits.  Ohio’s MOU indicates that its anticipated § 1915(b)/(c) waiver application is expected to include expanded Medicaid state plan benefits and additional HCBS.  California’s demonstration includes dental, vision, and non-emergency medical transportation benefits, and its plans may offer additional HCBS.  South Carolina’s demonstration includes a palliative care benefit for enrollees with a serious, chronic or life-threatening illness who may not meet hospice criteria.  Michigan’s plans must offer adaptive medical equipment and supplies, community transition services, fiscal intermediary services (to support self-direction), personal emergency response systems, and respite services (Table 3).

Washington’s managed FFS demonstration adds Medicaid health home services but does not otherwise change the existing Medicare and Medicaid benefits packages.  Similarly, Colorado offers care coordination services but otherwise does not change the existing Medicare and Medicaid benefits packages.

Minnesota’s administrative alignment demonstration will continue to provide Medicare benefits at least equivalent to the basic benefit levels included in Medicare Parts A, B, and D and Medicaid benefits based on existing Medicaid MCO contracts.

Demonstration Ombudsman

CMS has announced a funding opportunity for states with approved MOUs to support the planning, development, and provision of independent ombudsman services in the demonstrations, with six states (California, Illinois, Massachusetts, Ohio, Virginia, and Washington) awarded funding to date.16  Four states (California, Ohio, Texas, and Washington’s capitated model) indicate that existing state ombuds offices will offer individual advocacy and independent systemic oversight in their demonstrations, and five states’ (Illinois, Michigan, New York, South Carolina, and Virginia) MOUs indicate that they intend to support an independent ombuds program for their demonstrations.  Massachusetts and California have selected their demonstration ombudsman.17

Washington’s managed FFS MOU does not mention an ombuds program, while Colorado has created an alliance of existing organizations to provide education and advocacy for demonstration enrollees.

Minnesota’s MOU provides that the state’s managed care ombudsman will provide input on plan and system-wide performance but does not provide further details.

Table 3: LTSS in the Capitated Financial Alignment Demonstrations
State Nursing facility services included Home and community-based waiver services included DD population/ services included Traditional Medicaid benefits package expanded Plans can offer supplemental benefits Self-direction option required Required contracting/service coordination
CA Yes No No Yes – plans must provide dental, vision and non-emergency medical transportation services Yes Yes Yes – plans must have MOUs with county mental health and substance use agency for behavioral health services and county social service agency for IHSS
IL Yes Yes (except DD) No Not mentioned in MOU Yes Yes Not mentioned in MOU
MA Yes No (may seek to include in future) No Yes – plans must provide diversionary behavioral health and community support services and (unspecified) expanded Medicaid state plan benefits Yes Yes Yes – plans must provide Long-Term Supports coordinator form independent community-based organization as a member of the care team
MI Yes Yes Yes Yes – plans must provide adaptive medical equipment and supplies, community transition services, fiscal intermediary for self-direction, personal emergency response system, respite Yes Yes Yes – plans must contract with PIHP for behavioral health services
NY Yes Yes (NF diversion and transition waiver only) No* Not mentioned in MOU Yes Yes Not mentioned in MOU
OH Yes Yes (except DD) No Yes – expects to require plans to provide (unspecified) expanded Medicaid state plan benefits and additional HCBS Yes Yes Yes – plans must contract with AAA to coordinate HCBS for beneficiaries over age 60
SC Yes Yes (elderly/disabled, HIV/AIDS, and mechanical ventilation waivers only) No Yes – plans must provide palliative care benefit Yes Yes Not mentioned in MOU
TX Yes Yes (seniors and people with physical disabilities who meet NF level of care only) No Not mentioned in MOU Yes Yes Not mentioned in MOU
VA Yes Yes (elderly/disabled with consumer direction waiver only) No Not mentioned in MOU Yes Yes Not mentioned in MOU
WA Yes Yes (except DD) No Not mentioned in MOU Yes Yes Not mentioned in MOU
NOTES:  *NY’s capitated proposal for beneficiaries who have DD and need LTSS is pending with CMS.
SOURCE:  KCMU analysis of states’ financial alignment demonstration memoranda of understanding with CMS, available at http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.html.

Appeals

All of the capitated demonstration states will provide beneficiaries with a single integrated notice of appeal rights, and the existing Part D appeals process will continue to apply in all demonstrations.  Minnesota’s administrative alignment demonstration is building on the integrated appeals system already established in its Senior Health Options program by adding a single integrated notice of appeal rights and standardizing the timeframes to request Medicare and Medicaid appeals.  By contrast, Colorado and Washington’s managed FFS demonstrations do not make any changes to the existing Medicare and Medicaid appeals systems.

One of the capitated financial alignment demonstrations (New York) includes a fully integrated four level appeals process for all services traditionally covered by Medicare Parts A and B and Medicaid.  New York requires its demonstration health plans to continue providing benefits while appeals are pending for both prior-approved Medicare and Medicaid services if the beneficiary so requests within 10 days of the date of the notice.  (Continued benefits pending appeal is currently available under federal law for Medicaid services but not for Medicare services.)

Five of the capitated demonstration states (Illinois, Massachusetts, South Carolina, Virginia, and Washington) require beneficiaries to first exhaust an internal health plan appeal before proceeding to external appeals, while four of the capitated demonstration states (California, Michigan, Ohio, and Texas) allow beneficiaries to choose whether to first file an internal health plan appeal or instead to proceed directly to a fair hearing for Medicaid-covered services.

Eight of the capitated demonstrations states (Illinois, Massachusetts, Michigan, Ohio, South Carolina, Texas, Virginia, and Washington, in addition to New York, described above) require health plans to continue Medicare and Medicaid benefits while internal health plan appeals are pending; beneficiaries may request that Medicaid benefits continue while fair hearings are pending, but Medicare benefits will not continue during external appeals.  California’s demonstration does not currently provide for continued Medicare benefits pending appeal.  California’s MOU provides that the existing Medicare and Medicaid appeals processes will continue at least through demonstration year one, and the state will work to create a more integrated appeals process in future years.

Looking Ahead

As the demonstrations are implemented, additional details about several features are emerging, including how beneficiaries are being notified, counseled, and enrolled; how the demonstrations are being monitored and overseen; how beneficiary ombuds programs are being implemented; and how the demonstrations are being evaluated.  CMS has contracted with RTI International to conduct an overall evaluation of the demonstrations as well as state-specific evaluations.  The MOUs provide that the evaluations will include site visits, analysis of program data, focus groups, key informant interviews, analysis of changes in quality, utilization, and cost measures, and calculation of savings attributable to the demonstrations.  The evaluation findings are to be reported quarterly, although there is likely to be a lag in data availability.

The approved MOUs provide additional information about how CMS and the states envision the demonstrations working and insight into the framework and policy decisions that CMS may apply when developing MOUs with other states that submitted proposals.  Additional details are specified in the three-way contracts between CMS, the state, and demonstration plans in the capitated model,18 in the states’ final demonstration agreement with CMS in the managed FFS model,19 and in policy guidance.  Key areas to consider as the demonstrations are implemented include:

  • how beneficiaries are making their enrollment choices;
  • what the actual sources of program savings will be;
  • how beneficiaries’ access to medically necessary services and supports is being ensured;
  • how the demonstrations are affecting beneficiary access to HCBS;
  • how beneficiaries are navigating the demonstrations’ grievance and appeals processes;
  • whether continuity of care and intelligent assignment provisions are sufficient to prevent care disruptions and the extent to which beneficiaries’ current providers are participating in demonstration health plan networks;
  • how plans and providers are accommodating the needs of beneficiaries with disabilities; and
  • what impact the demonstrations are having on care quality and health outcomes.

While the demonstrations offer the potential opportunity to improve care coordination, lower program costs, and achieve outcomes such as better health and the increased use of HCBS instead of institutional care, at the same time the high care needs of many dual eligible beneficiaries increases their vulnerability when care delivery systems are changed.

Appendix