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?

Health Plan Background and Experience

Whereas the states and CMS structure the policies, procedures, and monitoring of the Initiative, much of the day-to-day work ultimately depends on health plan actions and competency (for example, via provider network development and the manner in which they promote quality and coordinate care). Because the demonstration health plans are melding the detailed requirements of both Medicare and Medicaid, and addressing the complex needs of dually eligible beneficiaries, their past experience is important, both in considering their regulatory experience and their familiarity with serving dually eligible beneficiaries.

Our analysis of health plans focuses on those in the five states that had enrolled beneficiaries in capitated financial alignment demonstrations by December 2014 (California, Illinois, Massachusetts, Ohio, and Virginia). A total of 29 health plans from 24 firms are participating in the demonstrations in those states; details on their prior experience and the quality ratings of plans operated by the same organizations are discussed in this section. Although additional states are opening enrollment in 2015, their health plans are not included here in detail, as the set of participating health plans may evolve during the launch of the demonstration (as it has in some other states). Brief information on health plans in these states also is provided in this section. Health plans in Minnesota’s administrative alignment demonstration also are not reviewed here in detail, as this demonstration adds only some administrative alignment functions to existing integrated contractors (which all had existing FIDE SNP and Medicaid contracts).

Experience of Participating Health Plans in Demonstration States Operational in 2014

Table 5 summarizes the key characteristics of the 29 health plans participating in the demonstration, including the prior experience they or their affiliated companies (those under the same parent company) have had in serving Medicare, Medicaid, or dual eligible enrollees within the state, as well as Medicare or Medicaid enrollees out of state. A few of the organizations operating demonstration health plans (Centene, Humana, Molina, and Anthem) have plans in more than one of these five states. These four companies accounted for 9 of the 29 plans in the demonstration. Ten of the health plans were local and had no Medicare or Medicaid enrollment out of state. The landscape of health plans varies by state, with Massachusetts and California including many local plans – all of which also have familiarity with dually eligible beneficiaries in MMC – and Illinois, Ohio, and Virginia including mainly national, for-profit plans.

Of the two states with previous enrollment of dually eligible beneficiaries in capitated MMC:

• California is including 10 health plans in its demonstration, with a heavy base of local nonprofit plans, along with some for-profit plans with strong ties to the state. As discussed above, California allowed only its existing Medicaid plans in the demonstration counties to participate; thus, all plans have significant Medicaid enrollment. It is important to note that California previously did not generally include LTSS under its health plans (except in the COHS plans);¹ the Medicaid plans’ experience with dually eligible beneficiaries thus was mostly with the minimal other services covered by Medicaid for dually eligible beneficiaries. California is phasing in MLTSS under its Medicaid health plans concurrent with the demonstration. All health plans except for one (Santa Clara Family Health Plan) also have D-SNP enrollment; three also have general Medicare Advantage product lines.
• Massachusetts’s demonstration includes three local nonprofit plans that all participate in its integrated Senior Care Options (SCO) program. These plans have experience with Medicare/Medicaid integration, though the care needs of those in the demonstration (dually eligible beneficiaries who are under 65 and disabled) differ from the needs of those in SCO (elderly dually eligible beneficiaries). Though Massachusetts initially selected three additional health plans (which do not participate in SCO and are for-profit) for its demonstration, these plans withdrew, mainly citing concerns about the demonstration’s payment rates. This development left the three nonprofit health plans that have more specialized experience with dually eligible beneficiaries.² One participating firm also has a large Medicare Advantage line.

Of the three states with no previous enrollment of dually eligible beneficiaries in capitated MMC:

• Illinois’s demonstration includes eight health plans. Most plans in Illinois did not have in-state Medicaid enrollment when they first contracted for the demonstration. In general, the state had very low risk-based MMC penetration. Health plans related to two of the demonstration plans (Aetna and IlliniCare/Centene) were the contractors for the state Medicaid’s ICP, which began in 2011 for Medicaid-only beneficiaries who are elderly or disabled. However, as Illinois moved rapidly toward risk-based MMC and the recently expanded ICP, it contracted with all of its demonstration health plans for this expansion, which began slightly before the demonstration. These plans thus are developing in-state Medicaid experience at the same time as they begin the demonstration. Six of the health plans have at least some in-state Medicare experience, including two plans that are among the largest Medicare plans in the state.
• Ohio is including five health plans in its demonstration; four of these have a large Medicaid presence in the state as well as D-SNPs. An additional health plan related to one of the state’s largest Medicare plans (Aetna) also is participating, though it does not have any in-state Medicaid enrollment.
• Virginia’s demonstration includes three health plans, two of which are related to Medicaid plans that are among the largest in the state. One of the plans (Anthem) has a small number of Medicare enrollees in the state, while the other (Virginia Premier) is a local Medicaid plan with no Medicare experience. The third plan (Humana) operates one of Virginia’s largest in-state Medicare plans, though has no previous in-state Medicaid enrollment.

Almost all of the organizations operating health plans across these states have at least some in-state Medicare Advantage enrollment, though not necessarily enrollment in D-SNPs. The few organizations with no in-state Medicare experience are either local, state Medicaid-focused plans (Santa Clara Family Health Plan in California and Virginia Premier in Virginia) or national health plans with Medicare experience in other states (IlliniCare/Centene and Molina in Illinois). About one-third of the organizations have in-state enrollment in both regular Medicare Advantage and D-SNPs. The type of Medicare plans of organizations operating health plans varies by state in some cases; almost all of California’s plans have D-SNPs, whereas plans in Illinois primarily had regular Medicare Advantage. (As shown in Table 3, Illinois has very limited D-SNP enrollment.) A handful of organizations also have some enrollees in other SNP types (for people with chronic conditions or requiring an institutional level of care).

Almost all organizations also have significant in-state Medicaid experience that predated the demonstrations. The main exception is in Illinois – most organizations operating health plans in Illinois did not have such experience when they first contracted with the state. Only two other organizations across the other states had no in-state Medicaid enrollment, though those plans have large in-state Medicare Advantage market shares (Humana has 63% in Virginia and Aetna has 20% in Ohio);³ instead, they are building on significant local experience in Medicare.

Experience of Participating Health Plans in Demonstration States Beginning in 2015

Table 6 displays high-level information on the previous in-state experience of organizations operating health plans expected to be in the demonstration states that begin enrollment in 2015. As discussed above, these health plans are not discussed here in detail, as the specific participating health plans may still change.

In general, these states are contracting with national for-profit plans with the exception of New York, which is including many local nonprofit, provider-based health plans already in its MLTC program. New York and Texas both are building on existing in-state health plans for their demonstrations, but these plans’ backgrounds vary widely. All Texas plans have previous in-state Medicare (including D-SNP) and Medicaid enrollment. However, New York’s plans all have Medicaid experience (some of them only in MLTSS), but about one-third have no prior Medicare experience. Though New York’s plans have specialized experience in MLTSS, and some have it in integrated care (via Medicaid Advantage Plus), the lack of Medicare experience indicates that some will have a steep learning curve in that area. As for other 2015 states, health plans in Michigan and South Carolina have a range of backgrounds, with some lacking previous in-state Medicare and/or Medicaid enrollment (especially in South Carolina).

Available Information on Quality Ratings of Participating Health Plans

Given the complex needs of the dual eligible population, it is important to understand what is known about the quality of care provided by health plans participating in the demonstration. Quality ratings of the existing related Medicare and Medicaid plans can give insight into the infrastructure and culture that health plans bring to the demonstrations.

Table 7 summarizes data on available quality ratings for the existing in-state Medicare and Medicaid health plans related to demonstration plans, including both the Medicare Advantage star rating for the plan (general Medicare and D-SNP, when available) and Medicaid plan rankings by the National Committee on Quality Assurance (NCQA). The quality scores range from 1 to 5, with 5 being the highest. Medicare Advantage plans with 4 stars or more qualify for additional bonus payments, and NCQA highlights scores of 4 or 5 as being better across three performance categories.⁴ Medicare Advantage star ratings are assessed at the contract level, not the health plan level. Thus, unless a company offers only SNPs under its contract, the quality scores will reflect the overall performance of all health plans under a contract, not necessarily the performance of the D-SNP. For this reason, and because the metrics may not account for enrollee characteristics in D-SNPs, many believe that star ratings may unfairly disadvantage D-SNPs.⁵ It is also important to note that while LTSS are a key part of the demonstrations, the quality measures that states use for LTSS vary greatly and there is no standardized set of measures that allows for comparison in this brief.⁶

The data show considerable diversity in scores, both across plans and states. Across the states, Massachusetts’ demonstration plans have consistently high quality scores, with two of the three plans scoring at the top of the ratings in Medicare and Medicaid, and the third, a specialized plan, scoring highly for its D-SNP offering. In contrast, and not surprising given its limited MMC experience, Illinois plans (with one exception) have no available Medicaid quality ratings. Only four of its contracted plans have Medicare quality ratings for in-state plans, including two with a rating for D-SNPs. (The ratings for these plans vary from 3.5 to 4.5.)

In Ohio and Virginia, all of the plans have ratings, but often just for one program (generally because they do not have a plan to be rated). Ohio’s five plans include three with MMC ratings, one of which also has a Medicare rating for D-SNPs, and two with only general Medicare Advantage ratings. Though there is variation by plan and element, these ratings tend to be about average (3 or 3.5), with plans worse on some dimensions (Centene’s Buckeye plan rated 2 on Medicaid prevention, CareSource’s 2.5 on D-SNP) and higher on others (CareSource with a 4 for consumer satisfaction and Molina with a 4 for treatment). In Virginia, two of the three plan ratings were average on two dimensions, but had a 4 for quality of treatment. The third, a Humana plan, did not have a Medicaid plan in the state and had average Medicare ratings (3.5).

Among these states, California stands out because of the relatively large number of plans with low MMC ratings from NCQA. Of the 10 participating plans, 8 had reported scores. Almost all have the lowest rating for consumer satisfaction (1); a few have below average ratings (1 or 2) for prevention or treatment. The D-SNP of the best performing Medicaid plan (CalOptima, a COHS health plan in Orange County) was sanctioned by CMS in January 2014 due to “widespread and systemic failures” that impacted its D-SNP enrollees’ access to care; for this reason, demonstration enrollment in that county has been delayed until at least July 2015.⁷ However, the D-SNP scores for California plans are better (mostly 3 and 3.5) than their Medicaid scores.