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

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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 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 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 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

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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

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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 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 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.)

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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 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

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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

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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 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 Withholds

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Quality

• 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 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.)

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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

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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 Enrollment

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Marketing

• 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.)

• 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-Sharing

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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

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

• 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

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

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

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

Massachusetts

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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)

Massachusetts

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• Original 15-design contract State

• Build off existing integration with Dual Eligible Special Needs Plans – Administrative functions– Marketing review– Enrollment

Minnesota

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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

Wisconsin

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Oversight

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Readiness 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 35

Readiness 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 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 Monitoring

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Ongoing 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

Oversight

• 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

Evaluation

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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

Evaluation

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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 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 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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Questions?

mmcocapsmodel@cms.hhs.gov

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