Demonstrations to Improve the Coordination of Medicare and Medicaid for Dually Eligible Beneficiaries: What Prior Experience Did Health Plans and States Have with Capitated Arrangements?

Introduction
  1. Young K, Garfield R, Musumeci M, Clemans-Cope L, and Lawton E, “Medicaid’s Role for Dual-Eligible Beneficiaries.” Washington, DC: Henry J. Kaiser Family Foundation, August 2013. http://www.kff.org/medicaid/issue-brief/medicaids-role-for-dual-eligible-beneficiaries/; Jacobson G, Neuman P, and Damico A, Medicare’s Role for Dual Eligible Beneficiaries.” Washington, DC: Henry J. Kaiser Family Foundation, April 2012. http://www.kff.org/medicare/issue-brief/medicares-role-for-dual-eligible-beneficiaries/

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  2. Ibid., and also Neuman P, Lyons B, Rentas J, and Rowland D, “Dx for a Careful Approach to Moving Dual-Eligible Beneficiaries into Managed Care Plans.” Health Affairs, 31, no.6 (2012):1186—1194.

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  3. Before Medicare was expanded through Part D (Prescription Drugs) in 2006 as a result of the Medicare Modernization Act of 2003, Medicaid also provided primary coverage for most prescription drugs.

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  4. For more information on Medicare and Medicaid options for dually eligible beneficiaries, see Medicaid and CHIP Payment and Access Commission, “Chapter 3: The Role of Medicare and Medicaid for a Diverse Dual Eligible Population” in Report to Congress, Washington DC: March 2013. http://www.macpac.gov/reports

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  5. Gold M, Jacobson G, and Garfield R, “There Is Little Experience and Limited Data to Support Policy Making on Integrated Care for Dual Eligibles.” Health Affairs, 31, no.6 (2012):1176—1185.

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  6. For additional detail on MMC options historically, see Medicaid and CHIP Payment Advisory Commission, “Report to Congress: The Evolution of Managed Care in Medicaid.” Washington DC: June 2011. http://www.macpac.gov/reports

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  7. For more information on Medicare and Medicaid options for dually eligible beneficiaries, see Medicaid and CHIP Payment and Access Commission, “Chapter 3: The Role of Medicare and Medicaid for a Diverse Dual Eligible Population” in Report to Congress, Washington DC: March 2013. http://www.macpac.gov/reports

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  8. Historically, health plans participating in Medicare managed care programs had to have a strong commercial presence in the market (the so called “50/50 rule,” initially designed as a quality enhancement feature). Although this requirement has been absent for some time, participants still tend to include firms with substantial commercial enrollment, particularly in group accounts. Medicaid health plans, in contrast, are more likely to specialize in the Medicaid line of business. Typically they have had experience in working with states and negotiating contracts with providers familiar with the usually lower payment rates offered by Medicaid versus Medicare as well as the special challenges of caring for those enrolled in Medicaid. Safety net and other so called “essential providers” tend to be more prominent in Medicaid health plan networks. Even though such differences are eroding over time as more commercial health plans enter the Medicaid market, Medicaid health plans still remain a separate “line of business” in such companies; whereas there may be more cross-fertilization across the different lines of business,  historically this has been limited.

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  9. “About the Office of Medicare and Medicaid Coordination.” http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/index.html

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  10. For additional details on the rationale for this program, see https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/FinancialModelstoSupportStatesEffortsinCareCoordination.html

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  11. CMS, State Medicaid Director Letter #11-008. “Re: Financial Models to Support State Efforts to Integrate Care for Medicare-Medicaid Enrollees.” July 2011.  http://downloads.cms.gov/cmsgov/archived-downloads/SMDL/downloads/financial_models_supporting_integrated_care_smd.pdf

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  12. For example, see Kaiser Commission on Medicaid and the Uninsured, “Financial Alignment Models for Dual Eligibles: An Update.” November 2011. https://www.kff.org/health-reform/issue-brief/financial-alignment-models-for-dual-eligibles-an/; Kaiser Commission on Medicaid and the Uninsured. “An Update on CMS’s Capitated Financial Alignment Demonstration Model for Medicare-Medicaid Enrollees.” April 2012. https://www.kff.org/medicaid/issue-brief/an-update-on-cmss-capitated-financial-alignment/

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  13. National Association of States United on Aging and Disability (NASUAD), “State Medicaid Integration Tracker.” January 1, 2015. http://www.nasuad.org/initiatives/tracking-state-activity/state-medicaid-integration-tracker

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  14. Alternatively, the demonstration could have been based around Medicare Advantage requirements, perhaps building on existing programs for Special Needs Plans serving dually eligible beneficiaries. Both options require that Medicare and Medicaid requirements be aligned. However, the state-based focus gives more attention to state interests in long-term care, which accounts for most state spending for dually eligible beneficiaries.

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  15. Crowley J, Musumeci M, and Reaves E, “Development of the Financial Alignment Demonstrations for Dual Eligible Beneficiaries: Perspectives from National and State Disability Stakeholders.” Washington DC: Henry J. Kaiser Family Foundation, July 2013. https://www.kff.org/medicaid/issue-brief/development-of-the-financial-alignment-demonstrations-for-dual-eligible-beneficiaries-perspectives-from-national-and-state-disability-stakeholders/

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  16. Gold M, Wang W, and Jacobson G, “Medicare Health Plans and Dually Eligible Beneficiaries: Industry Perspectives on the Current and Future Market.” Washington DC: Henry J. Kaiser Family Foundation, May 2013. https://www.kff.org/medicare/report/medicare-health-plans-and-dually-eligible-beneficiaries-industry-perspectives-on-the-current-and-future-market/

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  17. This applies to demonstration plans under the same parent company as those with sanctions or low past performance. See CMS “Additional Guidance on the Medicare Plan Selection Process for Organizations Interested in Offering Capitated Financial Alignment Demonstration Plans in 2013.” March 2012. http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/Downloads/MarchGuidanceDocumentforFinancialAlignmentDemo.pdf

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The State Context of the Demonstrations
  1. Washington, which has had a managed fee-for-service financial alignment demonstration in most of the state since 2013, also had an MOU with CMS for a capitated financial alignment demonstration in two of its counties. After facing withdrawals by some of its health plans, the state decided in February 2015 not to proceed with a capitated demonstration (See: Washington State Healthcare Authority. “HealthPath Washington Capitated Model Cancelled,” February 2, 2015. http://www.hca.wa.gov/medicaid/Documents/HealthPathWALetter.pdf ). Regarding earlier issues related to Washington’s health plans, see “Regence Faulted for HealthPath Launch Delay,” Business Examiner, September 18, 2014. http://www.businessexaminer.com/blog/September-2014/Regence-faulted-for-HealthPath-launch-delay/

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  2. For Medicare, see Gold M, Jacobson G, Damico A, and Neuman T, “Medicare Advantage 2014 Spotlight: Enrollment Market Update.” Washington DC: Henry J. Kaiser Family Foundation, May 2014. https://www.kff.org/medicare/issue-brief/medicare-advantage-2014-spotlight-enrollment-market-update/; for Medicaid, see Howell E, Palmer A, and Adams F, “Medicaid and CHIP Risk-Based Managed Care in 20 States: Experiences Over the Past Decade and Lessons for the Future,” The Urban Institute, July 2012. http://www.urban.org/UploadedPDF/412617-Medicaid-and-CHIP-Risk-Based-Managed-Care-in-20-States.pdf

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  3. Gorn D, “What's Behind High Opt-Out Rate Among Dual Eligibles in L.A. County?” California Healthline, December 4, 2014. http://www.californiahealthline.org/insight/2014/whats-behind-high-optout-rate-among-duals-in-los-angeles-county

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  4. Minnesota initially submitted a proposal for a capitated financial alignment demonstration. However, it decided not to pursue financial alignment, noting that the demonstration “would result in a significantly lower payment than Minnesota is now receiving for senior Medicare beneficiaries in current programs.” Minnesota Department of Human Services website, Update on Status of the Dual Demo, June 29, 2012. http://www.dhs.mn.gov/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&dID=141378

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  5. Gold M, Jacobson G, and Garfield R, “There Is Little Experience and Limited Data to Support Policy Making on Integrated Care for Dual Eligibles.” Health Affairs, 31, no.6 (2012):1176–1185.

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  6. The four demonstration states with operating FIDE SNPs represent four of the six states nationwide with such experience as of 2014. (The other two states are Arizona and Wisconsin.)

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  7. Gold M, et al. 2012.

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  8. Gold M, et al. 2012.

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  9. See Exhibit 11 of MedPAC and MACPAC, “Data Book: Beneficiaries Dually Eligible for Medicare and Medicaid.” January 2015.

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  10. Gold M and Casillas G, “What Do We Know about Health Care Access and Quality in Medicare Advantage Versus the Traditional Medicare Program?”  Washington DC: Kaiser Family Foundation, November 2014. http://files.kff.org/attachment/what-do-we-know-about-health-care-access-and-quality-in-medicare-advantage-versus-the-traditional-medicare-program-report

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  11. Denominator includes full and partial dually eligible beneficiaries. Gold M, Jacobson G, Damico A, and Neuman T, “Medicare Advantage 2014 Spotlight: Enrollment Market Update.” Washington DC: Henry J. Kaiser Family Foundation, May 2014. https://www.kff.org/medicare/issue-brief/medicare-advantage-2014-spotlight-enrollment-market-update/

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  12. CMS, “Guidance to States Using 1115 Demonstrations or 1915(b) Waivers for Managed Long Term Services and Supports Programs.” May 2013. http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Delivery-Systems/Downloads/1115-and-1915b-MLTSS-guidance.pdf

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  13. PACE is a fully integrated program that covers all Medicare services and a state’s Medicaid services. It is an option within Medicare in which state Medicaid programs can participate. To be eligible, a beneficiary must live in a PACE plan’s service area, be age 55 or older, require a nursing home level of care, and be able to live safely in the community.

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  14. Saucier P, Kasten J, Burwell B, and Gold L, “The Growth of Managed Long-Term Services and Supports (MLTSS) Programs: A 2012 Update.” Truven Health Analytics. Prepared for CMS, 2012. http://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/downloads/mltssp_white_paper_combined.pdf

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  15. Saucier P, et al. 2012.

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  16. For additional information on SCAN, see its application to participate in San Bernadino County under the demonstration. http://www.dhcs.ca.gov/provgovpart/Documents/Duals/RFS%20Applications/SCAN%20San%20bernardino.pdf .

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  17. California Department of Health Care Services, “Enrollment Strategy for Los Angeles County into Cal Medi-Connect Updated.” February 18, 2014. http://www.calduals.org/wp-content/uploads/2014/02/REVISED-LA-Enrollment-Strategy-2.19.14-2.0.pdf  Additionally, note that Blue Shield of California proposed in December 2014 to acquire Care1st Health Plan. See “Blue Shield of California To Enter Medi-Cal/Medicaid with Acquisition of Care1st.” December 8, 2014. https://www.blueshieldca.com/bsca/about-blue-shield/newsroom/care1st-acquisition-agreement-120814.sp

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Health Plan Background and Experience
  1. See pages 55—56 of California’s “Proposal to the Center for Medicare and Medicaid Innovation -- Coordinated Care Initiative: State Demonstration to Integrate Care for Dual Eligible Beneficiaries.” May 31, 2012. http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/Downloads/CAProposal.pdf

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  2. Gutman J, “Three of Six Selected Plans Drop Out of Mass. Duals Demo After Pay Rates Finalized.” Medicare Advantage News, July 15, 2013. http://aishealth.com/archive/nman072513-01

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  3. See appendices of Gold M, Jacobson G, Damico A, and Neuman T, “Medicare Advantage 2014 Spotlight: Enrollment Market Update.” Washington DC: Henry J. Kaiser Family Foundation, May 2014. https://www.kff.org/medicare/issue-brief/medicare-advantage-2014-spotlight-enrollment-market-update/

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  4. 4 and 5 correspond to being in the top one-third or top 10 percent of all health plans evaluated by NCQA. Methodology available at NCQA, “Health Insurance Plan Rankings 2014—2015 Methodology Overview.” July 2014. http://www.ncqa.org/Portals/0/Health%20Plan%20Rankings/2014/HPR2014_RankingsMethodologyOverview_Final_Update_7.30.14%20(1).pdf

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  5. CMS, “Request for Information – Data on Differences in Medicare Advantage (MA) and Part D Star Rating Quality Measurements for Dual-Eligible versus Non-Dual-Eligible Enrollees.” http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/Downloads/Request-for-Information-About-the-Impact-of-Dual-Eligibles-on-Plan-Performance.pdf; Weiss H, and Pescatello S, “Medicare Advantage: Stars System’s Disproportionate Impact on MA Plans Focusing on Low-Income Populations.” Health Affairs Blog, September 22, 2014. http://healthaffairs.org/blog/2014/09/22/medicare-advantage-stars-systems-disproportionate-impact-on-ma-plans-focusing-on-low-income-populations/

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  6. Saucier P, et al. 2012.

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  7. January 2014 sanction letter: CMS, “Notice of Immediate Imposition of Intermediate Sanctions (Suspension of Enrollment and Marketing) for Medicare Advantage-Prescription Drug Plan Contract Number: Orange County Health Authority (CalOptima) (H5433).” January 24, 2014. http://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/Downloads/CalOptima-Sanction-01-24-14.pdf; Update at calduals.org, “Alameda and Orange County Updates.” November 14, 2014. http://www.calduals.org/2014/11/14/alameda-orange-county-updates/

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Appendix
  1. These and other documents are available at the CMS Financial Alignment Initiative, Information and Guidance for Plans website, http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/InformationandGuidanceforPlans.html

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  2. See CMS, “Additional Guidance on the Medicare Plan Selection Process for Organizations Interested in Offering Capitated Financial Alignment Demonstration Plans in 2013.” March 2012. http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/Downloads/MarchGuidanceDocumentforFinancialAlignmentDemo.pdf

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  3. CMS, “Joint Rate-Setting Process for the Capitated Financial Alignment Model FAQs Updated August 9, 2013.” http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/JointRateSettingProcess.pdf

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  4. For additional details on state programs for appeals and beneficiary protection, see https://www.kff.org/medicaid/issue-brief/financial-alignment-demonstrations-for-dual-eligible-beneficiaries-compared/

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  5. Details on the readiness reviews is available at http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/ReadinessReviews.html

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  6. CMS, “Capitated Financial Alignment Demonstration Medicare-Medicaid Plan Annual Requirements and Timeline for CY 2015.” January 2014. http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/Downloads/2015_CurrentMMPAnnualRequirements.pdf

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  7. Various documents containing CMS guidance for health plans are compiled on the CMS Financial Alignment Initiative, Information and Guidance for Plans website. http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/InformationandGuidanceforPlans.html

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