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

2. 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 2

3. 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 3

4. 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 4

5. 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 5

6. 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 6

7. 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 7

8. 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 8

9. 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 9

10. All proposals can be accessed on the CMS website: http://www.cms.gov/Medicare- Medicaid-Coordination/Medicare-and-Medicaid- Coordination/Medicare-Medicaid-Coordination- Office/FinancialModelstoSupportStatesEffortsinC areCoordination.htmlhttp://www.cms.gov/Medicare- Medicaid-Coordination/Medicare-and-Medicaid- Coordination/Medicare-Medicaid-Coordination- Office/FinancialModelstoSupportStatesEffortsinC areCoordination.html All public comments received on the proposals can be accessed at: http://www.financialalignmentproposalcomment s.org/default.aspx http://www.financialalignmentproposalcomment s.org/default.aspx Status of Demonstration Development (cont.) 10

11. 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 http://www.cms.gov/Medicare-Medicaid- Coordination/Medicare-and-Medicaid- Coordination/Medicare-Medicaid-Coordination- Office/Downloads/JointRateSettingProcess.pdf Payment Rates 11

12. 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 12

13. 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 13

14. 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 14

15. 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 15

16. 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. 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 17

18. 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.) 18

19. 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 19

20. 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 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. 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. 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 23

24. Where Are We Now? Overview of the 2013 States StateTarget Population Proposed Demo area State Requesting Passive Enrollment? Proposed Effective Date CAFB 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 ILFB duals 21+, excluding PACE and IDD population Greater Chicago and Central Illinois YesPhase in over 6 months beginning April 1, 2013 24

25. Where Are We Now? Overview of the 2013 States StateTarget Population Proposed Demo area State Requesting Passive Enrollment? Proposed Effective Date MAFB duals 21-64, excluding PACE and duals in HCBS waivers StatewideYes with some exclusions Opt-in beginning April 1, 2013. Two waves of passive later in 2013 OHFB duals 18+, excluding PACE and IDD population 7 geographic regions YesThree waves of passive (by region) beginning April 1, 2013 25

26. Applications – Completed July 30 th – 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 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. 27

28. 2013 Plan Selection Process Ohio Selected Regions NorthwestEast Central SouthwestNortheast Central West CentralNortheast 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 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. 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.pdfhttps://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.pdfhttps://www.cms.gov/Medicare-Medicaid- Coordination/Medicare-and-Medicaid- Coordination/Medicare-Medicaid-Coordination- Office/Downloads/MedicareMedicaidDemoFAQ.pdf Massachusetts 30

31. 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 31

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

33. 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 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. 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 38

39. 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. 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 41

42. 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 42

43. Where Are We Going? 2014 States ArizonaNew YorkTennessee HawaiiOregonTexas IdahoRhode IslandVirginia MichiganSouth CarolinaWashington Proposals currently under review Submitted proposals and public comments are available on CMS website 43

44. 2014 Timeline MilestoneDate 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 CMSDecember 6, 2012 Final Application posted by CMS and available in HPMS January 10, 2013 Application due to CMSFebruary 21, 2013 Formulary due to CMSApril 2013 Medication Therapy Management Program due to CMS May 2013 Plan Benefit Package due to CMSJune 3, 2013 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.htmlhttp://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 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 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 http://www.integratedcareresourcecenter.com/icmstateproposals.aspx 45

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