Early Insights from Commonwealth Coordinated Care: Virginia’s Demonstration to Integrate Care and Align Financing for Dual Eligible Beneficiaries

Virginia is among the early states to launch a 3-year capitated financial alignment demonstration to integrate Medicare and Medicaid payments and care for beneficiaries who are dually eligible for Medicare and Medicaid. This report describes the early implementation of Virginia’s capitated demonstration, Commonwealth Coordinated Care (CCC). Findings are based on interviews conducted with a diverse group of state leaders, including representatives from state agencies; medical, behavioral health, and social services providers; consumer advocates; and health plans, involved in the design and early implementation of the CCC program. The report also includes data on enrollment in CCC to provide context for the qualitative findings.

CCC launched in April 2014, and as of January 10, 2015, had enrolled 27,333 beneficiaries, about 42 percent of the population estimated to be eligible for the program, most of whom (84 percent) were automatically assigned to a health plan and enrolled in the program, and the remainder (16 percent) voluntarily enrolled on their own. About 40 percent of all eligible beneficiaries across the state have opted out of the program, with the remaining 18 percent not yet enrolled.

The Virginia demonstration includes the following features:

• focuses on a comprehensive population of adult dually eligible beneficiaries, including seniors, people with physical disabilities, and people with behavioral health needs;
• includes beneficiaries residing within five regions of the state;
• allows beneficiaries to opt out of the demonstration for both their Medicare and Medicaid benefits;
• covers both community-based and institutional long-term services and supports (LTSS), including Medicaid home and community-based waiver services for seniors and people with physical disabilities;
• requires a minimum medical loss ratio for health plans and offers financial incentives for health plans to provide home and community-based services; and
• sets aside funds for an early state-specific evaluation.

Beneficiaries, the state, plans, and providers faced several challenges during the early implementation stage of the demonstration, such as:

• with an ambitious timeline for implementation, particularly because Virginia did not receive an earlier design contract and was among the first states to implement its demonstration, program development was occurring even as enrollment started: provider contracts were still being negotiated, systems for data exchange were being refined, and features such as integrated care teams or behavioral health homes were under development;
• confusion among beneficiaries and providers about the program and its benefits and policies;
• limited capacity to match beneficiaries to their Medicare providers during initial health plan auto-assignment, which has the potential to result in disrupted care arrangements;
• lack of extensive experience in working with LTSS managed care plans prior to program implementation, relative to other states;
• unanticipated difficulties with maintaining continuity of care for enrollees who switched plans or left the program; and
• lower initial enrollment than anticipated due to beneficiaries opting out of CCC.

Strengths of the implementation process included:

• frequent communication and promotion of “a culture of cooperation” between the state and other stakeholders;
• limits on the number of health plans, which helped to simplify plan choice for consumers and plan and provider contract negotiations, administration, and monitoring;
• contract requirements for provider inclusion and prompt payment, which helped encourage provider participation; and
• early collection, analysis, and public reporting of data, including data on the reasons that beneficiaries did not enroll or disenrolled from the CCC program, kept stakeholder informed and helped identify problems and improve program operations quickly.

As one of the first capitated dual eligible financial alignment demonstrations to be implemented in the country, Virginia’s early experience may help other states prepare and implement their programs. Stakeholders noted that the longer-term viability of the CCC program will depend on attracting and keeping beneficiaries enrolled; some stakeholders recommended restricting beneficiaries from opting-out or switching plans, while others expressed concern about limited choices for beneficiaries. They noted that plans’ decisions about the breadth of their networks as well as providers’ decisions about whether to join networks and beneficiaries’ desires to continue using their current providers will all play a role in ensuring program viability. Additionally, stakeholders noted that examinations of the frequency with which the appeals process is used and the outcomes of appeals will be instructive. Stakeholders generally were eager to move beyond CCC program start-up issues. As many noted, the post-transition period will be an important time to understand how the new program is affecting beneficiaries and what the longer-term impacts might be.

It is important to note that this case study provides a very early look at the program. More data collection and analysis will help answer questions about the long-term financial viability of the demonstration, whether and how savings are achieved, the extent to which service coordination, health outcomes, and quality improve, and the program’s impact on beneficiaries’ health and wellbeing. Consequently, it will be important to assess Virginia’s and other states’ demonstrations over time as more information becomes available.