Financial Alignment Initiative

Overview

A longstanding barrier to coordinating care for Medicare-Medicaid enrollees has been the financial misalignment between Medicare and Medicaid. To begin to address this issue, CMS will test two models for States to better align the financing of these two programs and integrate primary, acute, behavioral health and long term services and supports for their Medicare-Medicaid enrollees. 

These two models include:

• Capitated Model: A State, CMS, and a health plan enter into a three-way contract, and the plan receives a prospective blended payment to provide comprehensive, coordinated care. 
• Managed Fee-for-Service Model: A State and CMS enter into an agreement by which the State would be eligible to benefit from savings resulting from initiatives designed to improve quality and reduce costs for both Medicare and Medicaid.

CMS is interested in testing these models across the country in programs that collectively serve up to 2 million Medicare-Medicaid enrollees.  All programs will be rigorously evaluated as to their ability to improve quality and reduce costs. Meaningful engagement with stakeholders and ensuring beneficiary protections will be a crucial part of developing and testing these models.

The 15 States that received design contracts under the State Demonstrations to Integrate Care for Dual Eligible Individuals may chose to pursue these models and use their planning contract and stakeholder processes to support the development of the demonstration proposal, described below.

State Financial Alignment Proposals

To participate in the Financial Alignment Demonstration, each State had to submit a proposal outlining its proposed approach for the Financial Alignment Demonstration.  A total of 26 States submitted proposals, and those with active proposals are listed below.  As indicated in the SMD letter, State demonstration proposals are evaluated against standards and conditions that CMS is requiring of all States seeking to participate in the demonstration. Additional information on the proposal process, including a list of standards and conditions, is available to download below.  Please note, submission of a State demonstration proposal is an important step – but not the final step – toward demonstration approval.

As part of the proposal review process, CMS hosted a public comment period for each State proposal.  These periods have closed, but interested parties can still review the State proposals above and read the public comments submitted to CMS.  Click here to read public comments submitted to CMS.

State Financial Alignment Demonstration Memoranda of Understanding (MOUs)

When a State meets the standards and conditions for the Financial Alignment Demonstration, CMS and a State will develop a Memorandum of Understanding (MOU) to establish the parameters of the initiative. Click here to view Medicare-Medicaid Demonstrations Frequently Asked Questions.

• Click here to download the California Memorandum of Understanding
• Click here to download the Illinois Memorandum of Understanding
• Click here to download the Ohio Memorandum of Understanding
• Click here to download the Washington MFFS Memorandum of Understanding
• Click here to download the Massachusetts Memorandum of Understanding

Background Information:

2014 Application Information for Medicare-Medicaid Plans 

For interested organizations seeking to participate in the capitated Financial Alignment demonstration beginning in 2014, the application deadline is 8:00 p.m. Eastern Time (Baltimore, MD) on February 21, 2013.  

Please click here for the 2014 Medicare Medicaid Application. The application is also available to download below. Additional information and guidance on the 2014 MMP application is also available here.

Please click here to access the slides for the 2014 MMP Application Training Webinar held on Thursday, January 17, 2013.

2014 Annual Requirements for Medicare-Medicaid Plans 

Please click here to access the attached memorandum entitled "Capitated Financial Alignment Demonstration Medicare-Medicaid Plan Annual Requirements and Timeline for CY 2014" from Danielle Moon, J.D., M.P.A., Director, Medicare Drug and Health Plan Contract Administration Group, and Cynthia G. Tudor, Ph.D., Director, Medicare Drug Benefit and C & D Data Group.  This memorandum provides information about Contract Year 2014 annual requirements for Medicare-Medicaid Plans in states implementing the Capitated Financial Alignment Demonstrations in 2013.
Please send questions or concerns regarding this change to the Medicare-Medicaid Coordination Office at MMCOcapsmodel@cms.hhs.gov.

Financial Alignment Capitated Readiness Review
As part of the Medicare-Medicaid Capitated Financial Alignment Demonstration, CMS and participating States want to ensure that every selected Medicare/Medicaid plan (MMP) is ready to accept enrollments, protect and provide the necessary continuity of care, ensure access to the spectrum of Medicare, Medicaid, and pharmacy providers, and fully meet the diverse needs of the Medicare-Medicaid population.  As such, every selected MMP must pass a comprehensive joint CMS/State readiness review.  

CMS and States work collaboratively to develop state-specific readiness review tools based on stakeholder feedback that States and CMS received through letters and public meetings, the content of the Memorandum of Understandings between CMS and the State, state-specific procurement documents, applicable Medicare and Medicaid regulations, and input received on previous tools.  

• Please click here to download the Massachusetts-specific readiness review tool.
• Please click here to download the California-specific readiness review tool.

Future state-specific readiness review tools will not be completed until CMS and the states have a signed MOU.   

Funding to Support Options Counseling for Medicare-Medicaid Enrollees

CMS has announced a funding opportunity to support outreach, education, and counseling for Medicare-Medicaid enrollees eligible for the Financial Alignment Demonstration through the State Health Insurance Programs (SHIPs) and the Aging and Disability Resource Centers (ADRCs). More information on this opportunity is available in the Fact Sheet  and the Funding Opportunity Announcement  for this opportunity.

Joint Rate-Setting Process Under the Capitated Financial Alignment Demonstration

The purpose of this document is to provide States and other interested parties with additional information on the mechanism for developing payment rates for plans responsible for coordinating the full array of primary, acute, behavioral health and long-term supports and services for Medicare-Medicaid enrollees under the demonstration. Please click here to download the PDF.