New Guidance on State Option to Put Dual-Eligibles Into Managed Care

Last week, the Medicare-Medicaid Coordination Office and the Center for Medicare, parts of the Centers for Medicare & Medicaid Services (CMS), released more detailed guidance to private insurance plan sponsors about the capitated financial alignment demonstration. This demonstration attempts to integrate financing and care for dually eligible individuals, or people with both Medicare and Medicaid. Under this demonstration, which was initially announced in July 2011, interested private insurance plans will enter into three-way contracts with federal and state governments. Those dual-eligibles subject to the demonstration will receive both Medicare and Medicaid coverage from private plans, including for long-term care services and supports. The demonstration is required to produce reduced Medicare and Medicaid spending, without adversely affecting—and ideally improving—the quality of care that dual-eligibles receive.

The memo generally describes how CMS and states will determine prospective capitated payments, as well as the adequacy of plans’ provider networks.
In addition, the memo includes timelines for both the approval of state demonstrations and the selection of participating plans. CMS anticipates that for this demonstration, beneficiaries who are affected will have effective plan enrollment dates of January 1, 2013. As a result, many key deadlines will occur in 2012: states will have to submit their demonstration proposals, insurance plans will have to submit their letters of intent and plan models, and CMS will have to review and approve both. The memo also sets forth key programmatic area requirements, explaining existing federal requirements for plans under Medicare and Medicaid, as well as pre-established or preferred requirements for the new demonstration. Many of the requirements under the demonstration are hybrids of the existing Medicare and Medicaid requirements, though some will be negotiated through the CMS approval process.
According to the memo, 26 states are still exploring the capitated financial alignment demonstration.

Read CMS’ guidance to “Organizations Interested in Offering Capitated Financial Alignment Demonstration Plans.”