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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?

The State Context of the Demonstrations

Within the 10 states implementing health plan-based demonstrations, there are diverse levels and types of previous experience with relevant managed care and care coordination efforts (such as D-SNPs, capitated MMC for various populations, Medicaid managed long-term services and supports [MLTSS], and other Medicare/Medicaid integration efforts). States’ prior work in these areas can help in assessing state capacity to implement and oversee the demonstration, providing insight into why and how the state is implementing its demonstration, and what experience the health plans, beneficiaries, and providers in the state have regarding relevant capitated programs.

Focus of State Demonstrations

Table 1 summarizes selected characteristics and the current state of health plan-based demonstrations in 10 states — the nine state demonstrations that had three-way contracts for capitated financial alignment demonstrations by December 2014, and one state with an administrative alignment demonstration.1 All of the state demonstrations are focused on adults dually eligible for Medicare and Medicaid (only a very small percentage of dually eligible beneficiaries are children), but some limit eligibility by age or other conditions. Regarding age, Massachusetts’s demonstration includes only dually eligible beneficiaries under age 65 (the state already had an integrated program for dually eligible adults ages 65 and older), whereas both Minnesota’s and South Carolina’s demonstrations include only the elderly (65+). New York and Texas restrict eligibility to a subset of enrollees with specific LTSS requirements or use patterns, which mirror eligibility requirements in their existing related state MLTSS programs (Managed Long Term Care for New York and STAR+PLUS for Texas). Minnesota’s demonstration is unique, in that it aligns specific administrative functions within its existing program for dually eligible beneficiaries ages 65 and older, without financial alignment.

State demonstrations vary in their scope, reflecting in part the differences in the size and diversity of states and existing managed care programs. Whereas only two demonstrations are fully statewide (South Carolina and Minnesota), some other states include large numbers of counties that they tend to group into regions to facilitate management (Illinois, Michigan, Ohio, Virginia). In contrast, California, New York, and Texas are very large and diverse states that have chosen to focus their demonstrations on particular regions (seven counties mainly in southern California, seven counties in and around New York City, and six largely urban counties in Texas). Due to the urban focus of various states, the demonstrations cover many large population centers (such as Los Angeles, Chicago, Boston, Detroit, New York City, Houston, Dallas, and San Antonio). Given that both Medicare Advantage and MMC have higher penetration rates in urban areas,2 it is not surprising that many demonstrations melding the two programs also focus on key urban areas, which also are the areas where beneficiaries, including those dually eligible for Medicare and Medicaid, are more likely to live.

Table 1: Overview of State Dual Eligible Capitated/Administrative Alignment Demonstrations Approved by CMS
Population and Area Time Line

Dually Eligible Beneficiaries
Target Populationa

Geographic Areaa

Memorandum of Understanding Dateb

Initial Enrollment Dateb

CA Adults 7 counties 3/2013 4/2014
IL Adults 21 counties grouped into 2 regions 2/2013 3/2014
MA Adults under 65 8 full and 1 partial counties 8/2012 10/2013
MI Adults 25 counties grouped into 4 regions 4/2014 3/2015
MNc Adults 65+ enrolled in the Minnesota Senior Health Options program Statewide 10/2013 9/2013
NY Adults who require particular types of LTSSd 8 counties 8/2013 1/2015
OH Adults 29 counties grouped into 7 regions 12/2012 5/2014
SC Adults 65+ who live in the community at the time of enrollment Statewide 10/2013 2/2015
TX Adults who qualify for Supplemental Security Income (SSI) or Medicaid waiver HCBS 6 counties 5/2014 3/2015
VA Adults 104 localities grouped into 5 regions 5/2013 4/2014
a Musumeci M, “Financial and Administrative Alignment Demonstrations for Dual Eligible Beneficiaries Compared: States with Memoranda of Understanding Approved by CMS,” Washington, DC: Henry J. Kaiser Family Foundation, July 2014. See Appendix of Musumeci, 2014 for subpopulations excluded from each state’s demonstration.
b Demonstration time lines from CMS financial alignment demonstration websites; Michigan updated time line from “Michigan Announces Implementation Timeline Change for MI Health Link.” November 2014.,4612,7-132-63157_64754-342151–,00.html; California updated geography from, “Alameda and Orange County Updates.” November 14, 2014.
NOTES: Washington state is excluded from the table because the state decided (in February 2015), not to pursue its previously planned capitated financial alignment demonstration due to health plan withdrawal. It has had a managed fee-for-service (MFFS) demonstration since 2013. Colorado also has a managed fee-for-service (MFFS) demonstration.
c Minnesota’s demonstration is administrative only, with no financial alignment. Existing plans’ contracts were amended to include the terms of the demonstration.
d New York is including adult dually eligible beneficiaries who receive facility-based LTSS, who are eligible for a Nursing Home Transition & Diversion home and community-based waiver services, or require more than 120 days of community-based LTSS.

Of the states with capitated financial alignment demonstrations, five had enrollment in 2014 (California, Illinois, Massachusetts, Ohio, and Virginia). However, enrollment has been slow to build relative to initial targets; only two states with capitated financial alignment demonstrations (Illinois and Ohio) had about 50 percent or more of their target population enrolled by March 2015 (see Table 2). In part, low enrollment reflects delays in the start of passive enrollment and, in some states (such as California), it reflects significant percentages of eligible beneficiaries opting out of enrollment.3 Four states with capitated financial alignment demonstrations (New York, Michigan, South Carolina, and Texas) began voluntary enrollment in early 2015.

The 10th state (Minnesota) is in a unique situation because it is building on its existing integration efforts through an administrative alignment demonstration. The demonstration integrates administration, oversight, and other features of its existing program involving separate Medicaid and D-SNP contracts for health plans (such as streamlining appeals and grievances, establishing state roles in oversight of the D-SNPs, and establishing processes for coordination of integrated member materials). Existing contracts in Minnesota’s integration program for dually eligible beneficiaries were modified to include the terms of the administrative alignment demonstration. Health plans continue to be paid separately by Medicare and Medicaid on a capitated basis, with no opportunity for the state and federal governments to share in savings (as there is in the capitated financial alignment demonstrations).4

Table 2: Number of Dually Eligible Beneficiaries and Capitated/Administrative Demonstration Enrollment, by State
State Total (2010)a, d Estimated Eligible for
Enrolled in Demonstration
(as of March 2015)c, e
Percentage of Estimated
Eligible Who Are Enrolled
(as of March 2015)
CA 1,253,000 456,000 133,407 29%
IL 346,000 135,825 63,575 47%
MA 249,000 90,240 17,751 20%
MI 287,000 100,000 0 0%
MN 138,000 36,000 36,487f 100%
NY 796,000 170,000 666 0%
OH 332,000 115,000 66,826 58%
SC 152,000 53,600 1,502 3%
TX 654,000 168,000 35 0%
VA 182,000 78,600 27,029 34%
a Table 7 of MedPAC [Medicare Payment Advisory Commission] and MACPAC [Medicaid and CHIP Payment Access Commission], “Data Book: Beneficiaries Dually Eligible for Medicare and Medicaid,” January 2015.
b Musumeci M, “Financial and Administrative Alignment Demonstrations for Dual Eligible Beneficiaries Compared: States with Memoranda of Understanding Approved by CMS,” Washington DC: Henry J. Kaiser Family Foundation, July 2014.
c CMS Medicare Advantage Monthly Enrollment data, March 2015 (Monthly Enrollment by Plan for financial alignment demonstration states and SNP Comprehensive Report for Minnesota).
d Dually eligible beneficiaries receiving full or partial Medicaid benefits.
e Monthly Medicare Advantage enrollment reports do not include data from plans that have fewer than 10 enrollees.
f Minnesota’s demonstration is administrative only, with no financial alignment. Existing plans’ contracts were amended
to include the terms of the demonstration; thus, all beneficiaries in the existing FIDE SNPs are in the demonstration.

Previous Managed Care and Dual Eligible Experience in Demonstration States

Existing work highlights the generally limited experience nationally with managing care for dual eligible populations, and the limitations of statistics available to measure this background.5 In Table 3, we summarize available statistics on Medicare Advantage and MMC enrollment, both overall and for those dually eligible, by state.

Whereas most demonstration states have had considerable enrollment in Medicare Advantage and MMC in general, their experience varies, especially regarding dually eligible beneficiary enrollment in each program. Five of the demonstration states have had some dually eligible beneficiaries in capitated MMC that integrated Medicare and Medicaid services (California, Massachusetts, Minnesota, New York, and Texas), whereas five other states do not have this experience (Illinois, Michigan, Ohio, South Carolina, and Virginia). In Table 3, states are grouped according to whether they have previously enrolled dually eligible beneficiaries in capitated MMC. This particular grouping of states also is useful for examining other differences among these states and how they have implemented their demonstrations.

Among the five states with prior enrollment of dually eligible beneficiaries in capitated MMC, four had existing FIDE SNPs (California, Massachusetts, Minnesota, and New York).6 Two of these states (California and New York) have only limited FIDE SNP enrollment, though they also have other relevant in-state experience (to be discussed below). Additionally, Texas has a large managed care program with contractors that have both MMC and D-SNP plans, and coordinate between them. Importantly, this experience with dually eligible beneficiaries and integration impacts the landscape of health plans in a state. An earlier analysis found that, in 2010, these five states each had multiple companies within them that both offered D-SNP plans and had dually eligible beneficiaries in their MMC plans.7

The other five demonstration states have had no prior enrollment of dually eligible beneficiaries in capitated MMC (Illinois, Michigan, Ohio, South Carolina, and Virginia). As discussed below, other indicators also indicate that most of these states had less demonstration-relevant experience, such as low D-SNP enrollment. Further, in an analysis of health plan experience in 2010, no companies in these states offered both MMC and Medicare Advantage health plans.8 However, some companies (including some of those operating demonstration health plans) have more recently entered both the Medicare and Medicaid markets in these states.

Relevant prior experience within all of these states is discussed in further detail below.

Table 3: Prior Enrollment in Medicare Advantage and Comprehensive Risk-Based Medicaid Managed Care, by State
  Enrollment of Medicare Enrollees in Medicare Advantage Enrollment of Medicaid Enrollees in Comprehensive Risk-Based Medicaid Managed Care (2011)
  MA Penetration Rate (2004)a MA Penetration Rate (2014)a
Percentage of Dually Eligible Beneficiaries in
D-SNPs (2014)b
Percentage of all Medicaid Enrolleesc Percentage of Blind/Disabled Medicaid Enrolleesd Percentage of Dual Eligible Enrolleesc
National 12% 30% 16% 51% 41% 13%
States in which there is experience with dually eligible beneficiaries in Medicaid managed care
CA 31% 38% 19% 60% 52% 23%
MA 16% 20% 12% 33% 42% 6%
MN 13% 51% 30% 66% 15% 41%
NY 17% 35% 22% 76% 66% 1%
TX 6% 29% 19% 47% 40% 22%
States in which there is no prior experience with dually eligible beneficiaries in Medicaid managed care
IL 4% 16% 1% 8% 12% 0%
MI 1% 30% 8% 67% 81% 0%
OH 12% 38% 5% 75% 63% 0%
SC 0% 22% 13% 50% 52% 0%
VA 1% 15% 1% 58% 63% 0%
a Henry J. Kaiser Family Foundation, State Health Facts data. “Medicare Advantage Enrollees as a Percent of Total Medicare Population.”
b 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.
c CMS. “2011 Medicaid Managed Care Enrollment Report: Summary Statistics as of July 1, 2011.” Includes managed care organization (MCO) and health information organization (HIO) enrollment.
d Based on analysis by MACPAC of CMS Medicaid Statistical Information System (MSIS) data. Includes Medicaid enrollees who were blind or disabled, eligible for Medicaid only (not Medicare), and enrolled in an HMO for at least one month in 2011. These rates use a different methodology from the other columns in this table. Communication with MACPAC and analysis are on file with the authors.
NOTES: All states except Illinois and Minnesota also had small numbers of dually eligible beneficiaries enrolled in PACE, up to 1% of dually eligible beneficiaries.
Figures in bold reflect state penetration rates that are particularly low (5% or less for D-SNP or dual eligible enrollment and 10% or less for other penetration rates). Since the most recent 2011 data on MMC penetration, some states have had changes in their Medicaid programs that impact the data. For example, Illinois expanded its Integrated Care Program for aged, blind, and disabled Medicaid enrollees, and is transitioning other Medicaid enrollees to managed care. South Carolina transitioned more of its Medicaid program to MCOs (see South Carolina, “Managed Care Organizational Changes. Explanation of the Organizational Changes,” Additionally, Michigan began to enroll dually eligible beneficiaries in its capitated Medicaid managed care plans.
Medicare Advantage Experience

Demonstration states vary widely regarding the extent to which Medicare beneficiaries had participated in Medicare Advantage (see Table 3). Medicare Advantage penetration rates in 2014 varied from a low of 15 percent (Virginia) and 16 percent (Illinois) to a high of 51 percent (Minnesota) and 38 percent (California). It is difficult to assess Medicare Advantage penetration among people dually eligible for Medicare and Medicaid, as CMS does not provide data on enrollment among such beneficiaries in Medicare Advantage, either by health plan or state (though national Medicare Advantage penetration rates are lower among dually eligible beneficiaries than among those eligible for Medicare only).9 However, CMS does provide data on enrollment in D-SNPs, a Medicare Advantage program that has specific requirements oriented toward the needs of the dually eligible population. Nationwide, about 16 percent of dually eligible beneficiaries are enrolled in D-SNPs. State D-SNP enrollment signals health plan interest in dual eligible-focused product lines, state past work in contracting with Medicare plans and prior interest in developing integrated programs, and provider and beneficiary experience with managed care, all of which are highly relevant to understanding the demonstration-related background.

The five demonstration states with no previous enrollment of dually eligible beneficiaries in MMC also generally had lower D-SNP enrollment — especially Illinois, Ohio, and Virginia, which had 5 percent or fewer dually eligible beneficiaries enrolled in D-SNPs. Additionally, four of these five states (Illinois, Michigan, South Carolina, and Virginia) had very limited Medicare Advantage enrollments in 2004. This is important, because research generally shows that health plans more mature in their experience with Medicare Advantage tend to score higher on some quality metrics than newer health plans.10 Among the demonstration states, Illinois and Virginia stand out as having had particularly limited Medicare Advantage and D-SNP penetration. Among the states with previous enrollment of people dually eligible for Medicare and Medicaid in capitated MMC, all except Massachusetts had penetration rates near or above the national average for both Medicare Advantage and D-SNPs. California, Minnesota, and New York each have particularly high levels of enrollment in both Medicare Advantage and D-SNPs.

Medicaid Managed Care Experience

Not surprisingly, because of the state-based nature of the demonstrations, most states pursuing capitated models rely heavily on capitated managed care in their Medicaid program (9 of the 10 had managed care penetration rates of about 50% or more). Table 3 summarizes enrollment in comprehensive risk-based MMC by state, for all Medicaid enrollees, those with disabilities, and dually eligible beneficiaries. While capitated Medicaid managed care penetration rates are generally lower for those with disabilities than for the overall Medicaid population, all demonstration states have enrolled some individuals with disabilities in MMC. Notably, Illinois had particularly limited comprehensive risk-based MMC experience before developing its demonstration — for both Medicaid beneficiaries in general (8%) and those with disabilities (12%). Illinois currently is moving forward rapidly with implementing comprehensive risk-based managed care in Medicaid.

Previous enrollment of dually eligible beneficiaries in capitated MMC has been more limited in some of the demonstration states, and absent in half of them. Among participating states, Minnesota, California, and Texas have the most extensive enrollment, with penetration rates of 41 percent, 23 percent, and 22 percent, respectively; Massachusetts also has some enrollment of dually eligible beneficiaries ages 65 and over in parts of the state (6% penetration);11 and New York has a small program (with 1% penetration). Other states had no dually eligible beneficiaries enrolled in capitated MMC (Illinois, Michigan, Ohio, South Carolina, and Virginia). MMC enrollment of dually eligible beneficiaries means different things in different states. In some states, dually eligible beneficiaries are enrolled in Medicaid health plans to receive Medicaid benefits only. However, in other states, some integration of Medicare and Medicaid benefits occurred even before the demonstrations, as discussed next.

Experience with Specific Relevant Integration Programs

Given the focus of the demonstrations, experience with programs that integrate Medicare and Medicaid benefits and programs that manage long-term services and supports for those in Medicaid are particularly relevant. LTSS are the main services covered by Medicaid for dually eligible beneficiaries and are covered (to varying extents) under all states’ demonstrations. Historically, states’ experience in managing Medicaid LTSS under capitated managed care has been limited. However, more states have been implementing capitated MLTSS in Medicaid recently, though such programs can be challenging to implement and monitor.12 In Table 4, we summarize demonstration states’ existing programs to integrate care for dually eligible beneficiaries and/or provide LTSS under MMC plans; like Table 3, this table groups states according to their previous experience with enrolling dually eligible beneficiaries in capitated MMC.

States that had previous enrollment of dually eligible beneficiaries in capitated MMC also had at least some integration of care for them. Additionally, almost all demonstration states (except Illinois and Minnesota) had some enrollment in Program of All-inclusive Care for the Elderly (PACE).13 However, PACE enrollment was low in each state (no more than 1% of dually eligible beneficiaries). Aside from PACE, five of the demonstration states had pre-demonstration programs that integrated Medicare and Medicaid benefits for those dually eligible for both programs – some of them with full integration and others with some coordination between MMC plans and D-SNPs.

Table 4: State Experience with Integrating Medicare/Medicaid, Medicaid Managed Long-Term Services and Supports (MLTSS), and Demonstration Contracting, by State
Other Pre-Demonstration Program
  PACEa Program Name Integration of Medicare and Medicaidb MLTSS Enrollment (2012)c Demonstration limited to health plans in existing state program?
States in which there is experience with dually eligible beneficiaries in Medicaid managed care
CAd Yes SCAN Connections at Home Full integration Yes 2,304 Yes. Limited to Medicaid plans with contract in county (with exception of L.A. County).
CalOptima and Health Plan of San Mateoe Medicaid contractors have D-SNPs and coordinate Yes 21,702
MA Yes Senior Care Options (SCO) Full integration Yes 21,785 No requirement. However, all current participating plans are also in SCO.
MN No MN Senior Care Plus (MSC+) Medicare not included, but Medicaid contractors expected to coordinate; all MSC+ plans participate in MSHO Yes 11,995 Yes. Amended MSHO contracts to include terms of administrative demonstration.
MN Senior Health Options (MSHO) Full integration Yes 36,128
NY Yes Medicaid Advantage (MA) and Medicaid Advantage Plus (MAP) Full integration In MAP only
9,203 (MA)
2,956 (MAP)
Plans were required to be approved as MLTC plans by 2013. Some plans did not have operational MLTC plans when they applied for demonstration.
Managed Long Term Care (MLTC) Medicare not included, but Medicaid contractors expected to coordinate Yes 45,417
TX Yes STAR+PLUS Medicaid contractors must have D-SNPs and coordinate Yes 400,790f Yes. Limited to STAR+PLUS plans.
States in which there is no experience with dually eligible beneficiaries in Medicaid managed care
IL No Integrated Care Program (ICP) No dually eligible beneficiaries Yes 36,079 No requirement. However, both existing ICP plans are also in the demonstration, and all demonstration plans became part of ICP expansion.
MI Yes Managed Specialty Support & Services Program (MSS&S) Dually eligible beneficiaries included, but no integration Yes 41,272
OH Yes (None)
SC Yes (None)
VA Yes (None)
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.
National Association of States United on Aging and Disability (NASUAD), “State Medicaid Integration Tracker.” January 1, 2015.
States’ MOUs with CMS and state procurement documents.
a All states with PACE had only small numbers of dually eligible beneficiaries enrolled, up to 1 percent.
b Full integration means that contractors receive both Medicaid and Medicare capitation rates, and beneficiaries enroll in the same plan to receive both Medicare and Medicaid benefits (Saucier et al. 2012). The four state programs that fully integrate Medicare/Medicaid all now operate as FIDE SNPs (see “CMS SNP Comprehensive Report”). Other types of integration are as noted in Saucier et al. 2012.
c From P. Saucier et al., California CalOptima and HPSM data from “CMS SNP Comprehensive Report,” March 2012. Illinois data as of February 2013, from Integrated Care Program website.; New York MA and MAP data from New York’s “Medicaid Managed Care Enrollment Reports,” December 2012.
d California also is rolling out MLTSS within its Medicaid plans, concurrent with the financial alignment demonstration. See “DHCS Updates the CCI’s Timeline.” March 2014.
e The six County Organized Health System (COHS) plans in California manage custodial care in nursing facilities (described on page 56 of California’s demonstration proposal). Two of them, CalOptima and Health Plan of San Mateo, also have long-term experience with both MMC plans and D-SNPs; in 2006, they both had passive enrollment of dually eligible beneficiaries into their D-SNP product lines from their MMC plans. Enrollment numbers in the table reflect total D-SNP enrollment for these two plans in March 2014.
f About 214,000 of STAR+PLUS enrollees were fully dually eligible, and about 43,000 of them also were enrolled in a SNP. Of the 43,000, about 17,000 were enrolled in the same health plan for both Medicaid and SNP (Texas Application for the Dual Eligibles Integrated Care Demonstration Project, 2012.
States with Full Integration Programs

Four demonstration states had programs that included full integration and MLTSS before launching their demonstrations (California, Massachusetts, Minnesota, and New York). Full integration contractors receive both Medicaid and Medicare capitation rates, and beneficiaries enroll in the same plan to receive both Medicare and Medicaid benefits.14 These four states represent four of the five states nationwide that had programs with both MLTSS and full integration as of 2012.15 While these four states have more experience in care integration than most other states nationwide, the scope of their programs and size of enrollment differs, with Massachusetts and Minnesota having substantially larger integrated programs than California and New York.

  • Massachusetts’s longstanding program, Senior Care Options, enrolls Medicaid beneficiaries ages 65 and older, including dually eligible beneficiaries. (The state’s demonstration focuses on adults under age 65, who may have different service needs, such as greater needs for behavioral health care).
  • Minnesota’s fully integrated program (Minnesota Senior Health Options) has essentially been converted into the state’s administrative alignment demonstration.
  • New York had small programs for integrating care for dually eligible beneficiaries (Medicaid Advantage and Medicaid Advantage Plus) and a larger program for Medicaid MLTSS (Managed Long Term Care), which it has been expanding.
  • California has SCAN Connections at Home, which originated as a social HMO but later became a FIDE SNP that operates through a single health plan (SCAN) in a limited geographic area.16 California is not employing the Medicare Advantage model used by SCAN in the demonstration or including SCAN as a demonstration health plan. Instead, it is building on its large MMC program by contracting with its existing Medicaid health plans, which served dually eligible beneficiaries before the demonstration. Concurrent with its demonstration roll-out, California also is placing MLTSS services under its Medicaid health plans.
States with Other Integration Programs

A few additional demonstration states had programs that partially integrated care for dually eligible beneficiaries by having the same contractors for both Medicaid and D-SNP, and coordination between the two. In the Texas STAR+PLUS program, health plans are required to have both MMC and D-SNP contracts in the most populous counties in their service areas, and to coordinate between the two. In California Medicaid’s County Organized Health Systems (COHS), MMC contractors cover nursing facility services, and two of the COHS plans have D-SNP experience dating back to 2006. These two plans (CalOptima and Health Plan of San Mateo) have coordinated MMC and D-SNP services for many enrollees, especially since their MMC enrollees were passively enrolled into their D-SNPs in 2006 (and therefore they had many of the same beneficiaries enrolled in both their Medicaid and D-SNP plans). CalOptima and Health Plan of San Mateo are both participating in California’s demonstration, although CalOptima’s demonstration plan enrollment has been delayed until later in 2015.

Other Demonstration States

All five of the states with no previous enrollment of dually eligible beneficiaries in capitated MMC were less advanced in their efforts to integrate care and/or manage LTSS – both key components of the demonstrations. The Illinois Integrated Care Program for Medicaid-only enrollees who are elderly, blind, or disabled began including MLTSS in 2013. Michigan Medicaid has a program with MLTSS for those with developmental and intellectual disabilities and serious mental illnesses, but it does not integrate care for enrollees who are also eligible for Medicare. The remaining three states had no prior integrated programs for dually eligible beneficiaries and no MLTSS (Ohio, South Carolina, and Virginia). However, some states (such as Illinois and South Carolina) are also implementing other, broader shifts toward capitated MMC, and the demonstration is providing a vehicle to do so for dually eligible individuals.

Health Plan Selection for Demonstrations

Some states allowed only organizations that already operated particular in-state health plans to participate in the demonstrations, whereas others opened demonstration participation to a much broader set of health plans (see Table 4). Not surprisingly, this distinction largely follows the level of related experience within states and among their health plans.

Most states with existing integration programs and dually eligible beneficiaries in MMC decided to limit demonstrations to health plans with at least some experience in related in-state programs. Four of the demonstration states directly linked their demonstration health plan selection to plans participating in other relevant state Medicaid programs (California, Minnesota, New York, and Texas). Whereas Texas and Minnesota are building from plans already participating in integrated programs (STAR+PLUS and Minnesota Senior Health Options, respectively), California and New York are drawing from health plans under contract with MMC generally. In California, Medicaid generally, and the demonstration specifically, have models that vary by county. One of these models – the two-plan model involving a public and private plan – required adaptation in Los Angeles after one of the two plans (L.A. Care) had low Medicare quality scores, making it ineligible to accept passively enrolled individuals. Thus, three additional plans were added in Los Angeles County: Anthem’s CareMore (a specialized unit with an active D-SNP in the county), Molina (with extensive Medicaid enrollment elsewhere in California and the nation), and Care1st (a provider-led organization with Medicare Advantage plans and a D-SNP in the county, a contract with L.A. Care, and a Medicaid plan in neighboring San Diego county).17 In New York, the demonstration was limited to plans that were certified for the state’s Managed Long Term Care program, though some demonstration health plans did not yet have operational MLTC plans when they applied for the demonstration in 2013.

In contrast, other states had procurements that allowed health plans with varying backgrounds to apply for the demonstrations. These states generally asked those health plans applying about their relevant experience (such as with Medicare, Medicaid, and dually eligible beneficiaries), and in some cases set some broad thresholds (for example, Ohio required that plans have an existing Medicare Advantage contract somewhere in the country). However, the states with broader procurements did not limit demonstration participation to particular existing in-state Medicaid health plans. In some cases, these states nonetheless are working with health plans that have previous in-state enrollment in Medicare, Medicaid, or MLTSS programs—even though a state had not set such enrollment as a threshold. The similar past experience of these health plans may have made states view them more favorably or the plans themselves may have been more interested than other plans in participating in the demonstration.

Introduction Health Plan Background and Experience

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