An Update on CMS’s Capitated Financial Alignment Demonstration Model For Medicare-Medicaid Enrollees

Beginning in January, 2013, the Centers for Medicare and Medicaid Services (CMS) will implement a three year multi-state demonstration to test new service delivery and payment models for people dually eligible for Medicare and Medicaid. These demonstrations will enroll full dual eligibles in managed fee-for-service or capitated managed care plans that seek to integrate benefits and align financial incentives between the two programs. On January 25, 2012, CMS issued a memorandum providing additional guidance for organizations interested in offering health plans in the capitated financial alignment demonstration. The guidance details the state demonstration approval and plan selection processes, compares existing Medicare and Medicaid managed care plan requirements, and sets out CMS’s preferred standards for the capitated financial alignment demonstration model.

This policy brief describes significant characteristics of CMS’s capitated financial alignment model, including information provided in the new guidance concerning financing, enrollment, provider network adequacy, medical necessity determinations, appeals, and quality and oversight. It also summarizes key dates in the state demonstration approval and plan selection processes, and an appendix describes CMS’s standards and conditions for the state demonstrations.

Policy Brief (.pdf)