Key Themes in Capitated Medicaid Managed Long-Term Services and Supports Waivers

Delivery system reforms continue to play a significant role in shaping state Medicaid programs, including initiatives focused on beneficiaries who need long-term services and supports (LTSS).  From 2004 to 2012, the number of states with managed long-term services and supports (MLTSS) programs doubled from eight to 16, and the number of beneficiaries receiving MLTSS grew from 105,000 to 389,000.¹  The Centers for Medicare and Medicaid Services (CMS) notes “increasing interest from states in the form of concept papers, waiver applications and requests for technical assistance” in this area,² as a growing number of states enroll seniors and people with disabilities in Medicaid managed care and implement initiatives aimed at better coordinating and integrating Medicare and Medicaid services for dual eligible beneficiaries, often through capitated managed care arrangements.³  In addition, while most states continue to rely on § 1915(c) waivers to expand home and community-based services (HCBS), a significant number of states (13 in FY 2014 and 16 in FY 2015) report that incentives built into their MLTSS programs are expected to increase beneficiary access to HCBS in lieu of institutional care.⁴

In addition to the potential opportunity to expand beneficiary access to HCBS, Medicaid MLTSS programs seek to improve health outcomes and care quality through increased care coordination.  At the same time, because these programs by definition serve beneficiaries with relatively high medical and LTSS needs, there is the potential risk of disrupting existing care arrangements, especially for the HCBS on which beneficiaries rely to meet essential daily needs and live independently in the community.⁵  Also, because many states and health plans have relatively limited experience serving people with disabilities and administering LTSS through capitated managed care arrangements,⁶ Medicaid MLTSS programs may introduce new service delivery concepts, such as person-centered planning, self-direction, and independent living, which health plans may not have encountered while providing acute and primary care services to relatively healthy parents and children.⁷

Given the increased state interest in and implementation of Medicaid MLTSS programs, this issue brief examines key themes in 19 capitated Medicaid MLTSS waivers approved by CMS to date.  These include § 1115 demonstrations in 12 states (AZ, CA, DE, HI, KS, NJ, MN, NY, RI, TN, TX, VT) and § 1915(b)/(c) waivers in six states (FL, IL, MI (2 waivers), MN, OH, WI).  While states also may implement Medicaid managed care through § 1932 state plan authority or § 1915(a) waivers with voluntary enrollment, many states are using § 1115 demonstrations or § 1915(b)/(c) waivers to implement capitated MLTSS programs, often with mandatory enrollment.  MLTSS programs under § 1115 and § 1915(b) authority are the subject of CMS’s 2013 guidance to states.⁸  This brief analyzes capitated § 1115 and § 1915(b)/(c) MLTSS waivers with a focus on covered populations and services, provisions aimed at expanding beneficiary access to HCBS, beneficiary protections, and quality measurement and oversight in Medicaid MLTSS programs.