Status of the Capitated Financial Alignment Demonstrations

1. CMS logo Status of the Capitated Financial Alignment Demonstrations Vanessa Duran Marla Rothouse September 5, 2012 Image of 2 elderly couples playing cards

2. Medicare-Medicaid Coordination Office 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 2

3. Financial Alignment Demonstrations to Support State Efforts to Integrate Care 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 3

4. Financial Alignment Demonstrations to Support State Efforts to Integrate Care 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 4

5. Financial Alignment Initiative Vision 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 5 5

6. Examples of Beneficiary Enhancements • 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 6

7. State Demonstration Development Process • 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 7

8. Stakeholder Engagement • 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 8

9. Status of Demonstration Development • 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 9

10. Status of Demonstration Development (cont.) • 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 10

11. Payment Rates • 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 11

12. Payment Rates: Establishing Baseline Spending • 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 12

13. Payment Rates: Aggregate Savings Percentages • 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 13

14. Payment Rates: Risk Adjustment • 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 14

15. Payment Rates: Quality Withholds • 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 15

16. 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 measures 16

17. Enrollment Parameters • 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 17

18. Enrollment Parameters (cont.) • 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 18

19. Enrollment-Related Beneficiary Protections • 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 19

20. Phasing In Enrollment • 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 20

21. 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 21

22. 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 22

23. Part D Cost-Sharing • 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 23

24. Where Are We Now?Overview of the 2013 States 24

25. Where Are We Now?Overview of the 2013 States 25

26. 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 26

27. 2013 Plan Selection Process:California 27

28. 2013 Plan Selection ProcessOhio • 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

29. 2013 Plan Selection Process Massachusetts and Illinois Massachusetts - Late September 2012 Illinois - Late August 2012 29

30. Massachusetts • 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 30

31. Massachusetts • 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) 31

32. Minnesota • Original 15-design contract State • Build off existing integration with Dual Eligible Special Needs Plans • Administrative functions • Marketing review • Enrollment 32

33. Wisconsin • 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 33

34. Oversight 34

35. 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

36. 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 36

37. 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 37

38. Implementation Monitoring • 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 38

39. 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 Requirements 39

40. 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 40

41. Evaluation • 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 41

42. Evaluation • 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 42

43. Where Are We Going?2014 States • Proposals currently under review • Submitted proposals and public comments are available on CMS website 43

44. 2014 Timeline 44

45. 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 45

46. Questions? mmcocapsmodel@cms.hhs.gov 46