CMS invites states to test new dual-eligible care models

The CMS is inviting state Medicaid agencies to pursue new ways of integrating care for patients eligible for both Medicare and Medicaid—a population that has complex health needs and accounts for a big portion of spending in both public health programs.

In a letter dated Wednesday to state Medicaid directors, CMS Administrator Seema Verma described three new ways states can test approaches to integrating care for dual-eligible patients with the goal of improving the quality of their care and reducing costs for federal and state governments.

"Less than 10% of dually eligible individuals are enrolled in any form of care that integrates Medicare and Medicaid services, and instead have to navigate disconnected delivery and payment systems," Verma said. "This lack of coordination can lead to fragmented care for individuals, misaligned incentives for payers and providers, and administrative inefficiencies and programmatic burdens for all."

The invitation to state Medicaid agencies is part of the CMS' broader commitment to improve care for dual-eligibles, which was prompted in part by the Chronic Care Act that was passed as part of the budget act of 2018. The CMS is starting to implement the budget act's requirements, including addressing low integration in dual-eligible special needs plans, or D-SNPs, by holding them to stricter standards and streamlining the plans' grievance and appeals processes.

There were 12 million dual-eligible patients in the U.S. in 2017, up from 8.6 million in 2013, according to the CMS. Dual-eligibles made up 34% of Medicare spending in 2014 and 32% of Medicaid spending, according to the Medicare Payment Advisory Commission.

The CMS said in Wednesday's letter that it is open to allowing more states to participate in a demonstration testing a capitated model. Nine states are currently participating in the demonstration. The agency is also willing to grant long-term extensions to states already participating, or allow them to expand the demonstration to new geographies.

Under these demonstrations, the CMS, states and Medicare-Medicaid plans enter into three-way contracts to provide a full menu of services to dual-eligible patients. The program outcomes are still being evaluated, but the CMS said early feedback shows patients are satisfied. It expects states to reap savings of about 4% through the demonstrations.

The CMS also said it is open to working with states to test a managed fee-for-service model in states that have not turned to private managed-care plans to administer benefits for dual-eligibles. It is currently partnering with Washington and Colorado to test this model, and has seen early savings in Washington.

Finally, the CMS invited states to come up with new ways to integrate care for all dual-eligibles or specific subsets, like people living in rural areas. The agency said it is interested in concepts that reduce spending in the Medicaid and Medicare programs while increasing access to coordinated care, improving quality, promoting independence and preserving patients' access to all covered Medicare benefits, cost-sharing protections and choice of providers.

In December, the CMS sent another letter to Medicaid directors describing existing opportunities that states can take advantage of to better integrate care for dual-eligibles without needing federal authority.