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Status of the Capitated Financial Alignment Demonstrations
Status of the Capitated Financial Alignment Demonstrations
Vanessa DuranMarla Rothouse
September 5, 2012
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CMS logo
Section 2602 of the Affordable Care Act
• Purpose: Improve quality, reduce costs and improve the beneficiary experience– Ensure dually eligible individuals have full access
to the services to which they are entitled– Improve the coordination between the federal
government and states– Develop innovative care coordination and
integration models– Eliminate financial misalignments that lead to
poor quality and cost shifting
Medicare-Medicaid Coordination Office
Medicare-Medicaid Coordination Office
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Background: Last July, CMS announced new models to integrate the service delivery and financing of the Medicare and Medicaid programs through a Federal-State demonstration to better serve the population
Goal: Test models for increasing access to quality, seamless integrated programs for Medicare-Medicaid enrollees
Financial Alignment Demonstrations to Support State Efforts to Integrate CareFinancial Alignment Demonstrations to Support State Efforts to Integrate Care
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Demonstration Models:– Capitated Model: Three-way contract among
State, CMS and health plan to provide comprehensive, coordinated care in a more cost-effective way
– Managed FFS Model: Agreement between State and CMS under which States would be eligible to benefit from savings resulting from initiatives to improve quality and reduce costs in both Medicaid and Medicare
Financial Alignment Demonstrations to Support State Efforts to Integrate CareFinancial Alignment Demonstrations to Support State Efforts to Integrate Care
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The Financial Alignment Initiative will promote a more seamless experience for beneficiaries by:– Focusing on person-centered models that promote coordination
missing from today’s fragmented system– Developing a more easily navigable and simplified system of services
for beneficiaries– Ensuring beneficiary access to needed services and incorporating
beneficiary protections into each aspect of the new demonstrations– Establishing accountability for outcomes across Medicaid and
Medicare– Requiring robust network adequacy standards for both Medicaid and
Medicare– Evaluating data on access, outcomes and beneficiary experience to
ensure beneficiaries receive higher quality, more cost-effective care
Financial Alignment Initiative VisionFinancial Alignment Initiative Vision
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• Person-centered care planning• Choice of plans and providers• Continuity of care provisions• Care coordination and assistance with care
transitions • Enrollment assistance and options counseling• One identification card for all benefits and services• Single statement of all rights and responsibilities• Integrated grievances and appeals process• Clearer accountability for beneficiary outcomes and
experiences
Examples of Beneficiary Enhancements
Examples of Beneficiary Enhancements
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• States developed demonstration proposals based on ongoing, meaningful stakeholder input
• States posted demonstration proposals for 30-day public comment period
• States submitted demonstration proposals to CMS
• CMS posted for 30-day public comment on MMCO and Integrated Care Resource Center websites
• CMS evaluates demonstration proposals against standards and conditions
State Demonstration Development Process
State Demonstration Development Process
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• State must provide evidence of ongoing and meaningful engagement:– During planning phase– On an ongoing basis during the demonstration
• Stakeholders include beneficiaries and their families, consumer organizations, beneficiary advocates, providers and plans
Stakeholder EngagementStakeholder Engagement
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• Overall: 26 States are actively pursuing one or both of the models (18 States capitated, 6 States managed FFS and 2 States both)– Six capitated model States requesting 2013 effective date: CA, IL, MA,
MN, OH, WI
• Draft Proposals: 26 States posted a draft proposal to State sites for a 30 day public comment period
• Official Proposal Submissions: All 26 States have officially submitted proposals to CMS, and all proposals were posted for a 30 day public comment period– These States are: AZ, CA, CO, CT, HI, ID, IL, IA, MA, MI, MN, MO, NM,
NY, NC, OH, OK, OR, RI, SC,TN, TX, VT, VA,WA, and WI
Status of Demonstration DevelopmentStatus of Demonstration Development
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• All proposals can be accessed on the CMS website: http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.html
• All public comments received on the proposals can be accessed at: http://www.financialalignmentproposalcomments.org/default.aspx
Status of Demonstration Development (cont.)
Status of Demonstration Development (cont.)
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• Participating plans receive a capitation rate reflecting the integrated delivery of Medicare and Medicaid benefits
• Rates for participating organizations developed by CMS in partnership with States based on:– Baseline spending in both programs– Anticipated savings resulting from integration & improved care
• For more information: http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/JointRateSettingProcess.pdf
Payment RatesPayment Rates
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• Medicaid – Takes into account historic costs, including any
Medicaid managed care plan level payment and FFS costs
• Medicare– Weighted average of FFS and managed care
populations’ spending assumptions– Part D projected baseline for the Part D direct subsidy
will be the Part D national average monthly bid amount for the payment year. For CY 2013, this amount is $79.64
Payment Rates: Establishing Baseline Spending
Payment Rates: Establishing Baseline Spending
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• Improved care management and administrative efficiencies should lead to savings
• State-specific aggregate savings percentages will be established
• Applied to Medicare A/B and Medicaid components of the rate
• Both payers proportionally share in the savings achieved regardless of underlying utilization patterns
Payment Rates: Aggregate Savings Percentages
Payment Rates: Aggregate Savings Percentages
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• Medicaid component of the rate:– Basis will be a methodology proposed by the State
and agreed to by CMS• Medicare component of the rate:
– Risk adjustment based on each enrollee’s risk profile
– Existing CMS-HCC and RxHCC risk adjustment models used
Payment Rates: Risk AdjustmentPayment Rates: Risk Adjustment
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• Percentage of the capitation withheld and repaid if plans meet established quality thresholds
• Quality withhold measures:– Core quality measures across all demonstrations– State-specified measures
• Year 1: Encounter and process measures• Years 2 and 3: Subset of overall quality
reporting measures
Payment Rates: Quality WithholdsPayment Rates: Quality Withholds
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QualityQuality
• CMS and States jointly conduct a consolidated, comprehensive quality management reporting process
• Core set of CMS measures for all plans in all States– Focus on national, consensus-based measurement sets – Relevant to broader Medicare-Medicaid enrollee
populations
• State-specific measures– Targeted to State-specific demonstration population– Focus on long-term supports and services measures that
are underrepresented in national measures16
• States can request passive enrollment of eligible beneficiaries in their proposals
• Approval of passive enrollment is subject to robust beneficiary protections
• Passive enrollment systems designed to maximize continuity of existing relationships and account for benefits and formularies
• CMS/State may allow for facilitation of enrollment using independent third party
Enrollment ParametersEnrollment Parameters
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• Individuals not eligible for passive enrollment:– PACE Organization enrollees– Enrollees in employer sponsored insurance or whose
employer/union is paid the Part D Retiree Drug Subsidy
– Enrollees who have opted out of a demonstration plan
– Others as memorialized in the CMS-State Memorandum of Understanding
– For 2013, individuals who were reassigned to a below-benchmark PDP effective January 1, 2013
Enrollment Parameters (cont.)Enrollment Parameters (cont.)
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• Notification in advance of the enrollment• Ability to opt out at any time• Understandable beneficiary notification• Resources to support beneficiaries
– Choice counselors and enrollment brokers– State Health Insurance Programs– Aging and Disability Resource Centers
Enrollment-Related Beneficiary Protections
Enrollment-Related Beneficiary Protections
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• CMS expects States to phase in enrollment over a period of time at program start-up– Examples: By geography or population groups
• CMS/State may limit enrollment for a variety of reasons (e.g., quality, capacity)
• No phase-in to new counties or populations in Years 2 and 3 of the demonstration
Phasing In EnrollmentPhasing In Enrollment
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MarketingMarketing
• Marketing requirements will be determined jointly by CMS and State– Standards to be at least as stringent as those
applicable to Part D and Medicare Advantage plans under the Medicare Marketing Guidelines
• Marketing materials submitted in HPMS marketing module and reviewed jointly by CMS and States, leveraging existing processes and review timeframes
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Marketing (cont.)Marketing (cont.)
• Demonstration-specific models to be developed for at least the following required documents:– Evidence of Coverage/Member Handbook– Summary of Benefits– Comprehensive formulary– Provider and pharmacy directory– Single ID card – Enrollment forms
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• Demonstration plans may elect to reduce Part D cost sharing amounts below statutory low income subsidy (LIS) copayment amounts– Goal: To test whether reduced cost sharing improves
medication adherence and leads to improved health outcomes and reduced overall health care expenditures
– Plans may fund the difference between the LIS cost-sharing amount and the reduced cost sharing amount out of the administrative portion of their payment
– No impact on LIS cost sharing subsidy– Further guidance will be released
Part D Cost-SharingPart D Cost-Sharing
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Where Are We Now?Overview of the 2013 States
Where Are We Now?Overview of the 2013 States
State Target Population
Proposed Demo area
State Requesting
Passive Enrollment?
Proposed Effective
Date
CA FB duals 18+, excluding PACE
Alameda, LA, Orange, Riverside, San Bernardino, San Diego, San Mateo , and Santa Clara counties
Yes with some exclusions
Monthly passive beginning June 1, 2013
IL FB duals 21+, excluding PACE and IDD population
Greater Chicago and Central Illinois
Yes Phase in over 6 months beginning April 1, 2013
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Where Are We Now?Overview of the 2013 States
Where Are We Now?Overview of the 2013 States
State Target Population
Proposed Demo area
State Requesting
Passive Enrollment?
Proposed Effective
Date
MA FB duals 21-64, excluding PACE and duals in HCBS waivers
Statewide Yes with some exclusions
Opt-in beginning April 1, 2013. Two waves of passive later in 2013
OH FB duals 18+, excluding PACE and IDD population
7 geographic regions
Yes Three waves of passive (by region) beginning April 1, 2013
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Status of the Medicare Components of the Plan Selection Process
Status of the Medicare Components of the Plan Selection Process
• Applications – Completed July 30th – Remaining issues addressed during readiness review
• Formularies – Fall 2012– Base formulary reviews are completed– Supplemental formulary file reviews to be completed in
Fall 2012
• Plan Benefit Packages – Fall 2012• Medication Therapy Management Programs
– Completed July 2012• Models of Care – Early September 2012
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2013 Plan Selection Process:California
2013 Plan Selection Process:California
Selected Counties and Health Plans
Alameda •Alameda Alliance Joint Powers Authority•Blue Cross of California Partnership Plan, Inc.
San Diego•Care1st Health Plan•Health Net Community Solutions, Inc.•Community Health Group•Molina Healthcare of California
Los Angeles•L.A. Care Health Plan•Health Net Community Solutions, Inc.
San Bernardino•IEHP Health Access•Molina Healthcare of California
Orange•Orange County Health Authority
San Mateo•Health Plan of San Mateo
Riverside•IEHP Health Access•Molina Healthcare of California
Santa Clara•Santa Clara County Health Authority•Blue Cross of California Partnership Plan, Inc.
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2013 Plan Selection ProcessOhio
2013 Plan Selection ProcessOhio
Selected Regions
Northwest East Central
Southwest Northeast Central
West Central Northeast
Central
• Final plan selection in late-August • Three plans in the Northeast Region
• Two plans in the remaining regions
• No plan can be in more than 3 regions
• Scoring results available at: http://jfs.ohio.gov/rfp/R1213078038ICDS.stm 28
2013 Plan Selection Process Massachusetts and Illinois
2013 Plan Selection Process Massachusetts and Illinois
Massachusetts -Late September 2012
Illinois -Late August 2012
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• Memorandum of Understanding (MOU) signed August 22, 2012– MOU:
https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/MassMOU.pdf
– FAQ: https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/MedicareMedicaidDemoFAQ.pdf
MassachusettsMassachusetts
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• Approximately 111,000 eligible beneficiaries• Beneficiaries age 21-64• Medicare Parts A/B and D; Medicaid (Mass
Health)• Expanded services (dental care and vision)• New services (long-term community support
services and new behavioral health diversionary services)
MassachusettsMassachusetts
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• Original 15-design contract State
• Build off existing integration with Dual Eligible Special Needs Plans – Administrative functions– Marketing review– Enrollment
MinnesotaMinnesota
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• Original 15-design contract State• Target population -- persons residing in
institutional settings• Goals:
– Fully integrate two major public payer systems– Eliminate artificial barriers and treatment
patterns resulting from differing regulatory and financial arrangements; and
– Improve physical and mental health and long-term outcomes
WisconsinWisconsin
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OversightOversight
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Readiness ReviewsReadiness Reviews
• Two step process depending on selected plans’ Medicaid and/or Medicare experience
• Desk Review• On-Site Review
• Covers a wide range of topics, including but not limited to:
• Care Coordination• Systems Capacity• Transitions• Hiring Plans/Staffing• Contracting• Network Validation
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Readiness ReviewsReadiness Reviews
• General Readiness Review Plan will be customized for each State– Allows State and CMS to ensure criteria are
focused on elements unique to the targeted population (e.g., long-term care, self-direction, disability competence, behavioral health, etc.)
– Allows State and CMS to modify criteria, as necessary, for each selected demonstration plan
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Readiness ReviewsReadiness Reviews
• Timing• Will vary depending on demonstration start date• Selected plans will have at least 2 weeks to
prepare for desk review • Selected plans will have at least 2 weeks to
prepare for on-site review• Selected plans will receive a readiness review
report and have an opportunity to address any outstanding issues prior to a final determination of plan readiness
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• Milestones based on criteria from the readiness reviews
• Allows CMS and State to monitor demonstration plan as enrollments begin
• System Capacity• Health Risk Assessments• Staffing• Transitions
• May delay future enrollment
Implementation MonitoringImplementation Monitoring
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Ongoing MonitoringOngoing Monitoring
• Ongoing Monitoring• Elements based on Readiness Review
– Care Coordination– Health Risk Assessments– Provider and Facility Network Capacity
• Part C and Part D data driven monitoring– Call Centers– Part D Appeals and Grievances– Web Sites
• Part C and Part D Reporting Requirements39
OversightOversight
• Contract Management Review Team• Coordinated team of State and CMS• Responsible for day-to-day management• Leverage existing protocols such as the
Complaints Tracking Module
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• CMS contracted with independent evaluator (RTI)
• State-specific evaluation plans • Mixed method approach (qualitative and
quantitative)– Site visits– Analysis of focus group data– Analysis of program data– Calculate savings attributable to the demonstration
EvaluationEvaluation
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• Key issues, include but are not limited to:– Beneficiary health status and outcomes– Quality of care provided across settings and care
delivery models– Beneficiary access to and utilization of care across
settings– Beneficiary satisfaction and experience– Administrative and systems changes and
efficiencies– Overall costs or savings for Medicare and Medicaid
EvaluationEvaluation
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Where Are We Going?2014 States
Where Are We Going?2014 States
Arizona New York Tennessee
Hawaii Oregon Texas
Idaho Rhode Island Virginia
Michigan South Carolina Washington
• Proposals currently under review
• Submitted proposals and public comments are available on CMS website
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2014 Timeline2014 Timeline
Milestone Date
Notice of Intent to Apply Web Tool released
Early October 2012
Recommended date to submit Notice of Intent to Apply to ensure HPMS Access
Early November 2012
CMS User ID form due to CMS December 6, 2012
Final Application posted by CMS and available in HPMS
January 10, 2013
Application due to CMS February 21, 2013
Formulary due to CMS April 2013
Medication Therapy Management Program due to CMS
May 2013
Plan Benefit Package due to CMS June 3, 2013
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Resources for More InformationResources for More Information
Financial Alignment Initiative: – General Information:
http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.html
– January 25, 2012 Financial Alignment Guidance: http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/FINALCMSCapitatedFinancialAlignmentModelplanguidance.pdf
– March 29, 2012 Financial Alignment Guidance: http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/MarchGuidanceDocumentforFinancialAlignmentDemo.pdf
– State Demonstration Proposals: http://www.integratedcareresourcecenter.com/icmstateproposals.aspx
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