Fact sheet




On August 23, 2012, the Centers for Medicare & Medicaid Services (CMS) announced that the Commonwealth of Massachusetts will become the first State to partner with CMS in the Financial Alignment Demonstration (the Demonstration) to test a new model for providing Medicare-Medicaid enrollees with a more coordinated, person-centered care experience. 

Under the Demonstration, Massachusetts and CMS will contract with Integrated Care Organizations (ICOs) that will coordinate the delivery of and be accountable for all covered Medicare, Medicaid, and expanded services for participating Medicare-Medicaid enrollees in the Commonwealth. 

Medicare-Medicaid Enrollees

Improving the care experience for people who are Medicare-Medicaid enrollees – sometimes referred to as “dual eligibles” – is a critical priority for CMS.  Currently, Medicare-Medicaid enrollees navigate multiple sets of rules, benefits, cards and providers (Medicare A/B, Part D and Medicaid).  Total annual spending for their care exceeds $300 billion across both programs.

The Financial Alignment Initiative – Partnerships to Provide Better Care

The new Demonstration seeks to provide Medicare-Medicaid enrollees with a better care experience by testing a person-centered, integrated care program that provides a more easily navigable and seamless path to all covered Medicare and Medicaid services. 

Last July, CMS announced this opportunity for States and CMS to better coordinate care for Medicare-Medicaid enrollees.  Under the Demonstration, CMS will test the effectiveness of two models:

1)      Capitated Model in which a State and CMS contract with a health plan or other qualified entity that receives a prospective, blended payment to provide enrolled Medicare-Medicaid enrollees with coordinated care; and

2)      Managed Fee-for-Service Model in which 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.  

The Massachusetts Demonstration

Massachusetts is the first State to enter a Memorandum of Understanding (MOU) with CMS to participate in the Demonstration and test the capitated Financial Alignment model.  The Commonwealth and CMS will contract with Integrated Care Organizations (ICOs) that will oversee and be accountable for the delivery of covered Medicare, Medicaid, and expanded services for Medicare-Medicaid enrollees ages 21-64 in the Commonwealth.  As a result, 110,000 Medicare-Medicaid enrollees in Massachusetts will have an opportunity to choose better, more coordinated care.

Through the Demonstration, the Commonwealth will offer expanded and enhanced services, such as additional dental care, vision, and durable medical equipment benefits to Medicare-Medicaid enrollees participating in the Demonstration.  In addition, Medicare-Medicaid enrollees will also have access to new services aimed at promoting community supports as alternatives to long-term institutional services, as well as new behavioral health services for individuals with serious mental illness and substance abuse disorders.

The new Demonstration includes critical beneficiary protections that will ensure high-quality care is delivered. CMS and Massachusetts have established a number of quality measures relating to the beneficiary and caregiver overall experience of care, care coordination, and fostering and supporting community living, among many others.  In addition, all ICOs will include Medicare-Medicaid enrollee participation in their governance structure. 

CMS is funding and managing the evaluation of each state Demonstration. CMS has contracted with an external independent evaluator, RTI International, to measure, monitor, and evaluate the overall impact of the Demonstrations, including impacts on Medicare and Medicaid expenditures and service utilization.  There will be a unique, Massachusetts-specific evaluation plan using a comparison group to analyze the impact of the Demonstration. 

Putting the Beneficiary First

The Demonstration is designed to provide Medicare-Medicaid enrollees with a more comprehensive and coordinated care experience.  Following a person-centered model, Medicare-Medicaid enrollees will have the ability to shape and direct the care they receive, including through developing an individualized care plan.  Care will be delivered through teams that include a primary care provider, care coordinator, independent long-term services and supports (LTSS) coordinator, and other care providers at the discretion of each beneficiary.

Enrollment will occur in two phases.  Beneficiaries will be able to voluntarily enroll in the new programs beginning in April of 2013.  In July and October of 2013, eligible beneficiaries who have not enrolled will be enrolled in a Demonstration Plan and be provided with the choice to opt out of the Demonstration or select an alternate Demonstration plan.    

To ensure beneficiaries have access to information and counseling around this Demonstration, CMS also announced today a funding opportunity for State Health Insurance Counseling and Assistance Programs (SHIPs) and Aging and Disability Resource Centers (ADRCs) in approved Demonstration states.  This funding will support local SHIPs and ADRCs in helping beneficiaries make enrollment choices and assisting with beneficiary education and outreach.

A Transparent Process Supporting Public Input

The Massachusetts Demonstration is the culmination of an extensive planning and development process through which the public helped shape the Demonstration’s design.  Massachusetts hosted several forums to solicit public involvement.  Medicare-Medicaid enrollees, caregivers, advocates, plans and other partners participated and contributed to creation of the Massachusetts Demonstration announced today.   As part of this process, the Commonwealth posted its draft proposal for public comment and incorporated the feedback into its Demonstration proposal before officially submitting it to CMS; CMS also posted the proposal for public comment and incorporated that input into the Demonstration. 

Additional Information

The Demonstrations will be administered under the Center for Medicare & Medicaid Innovation authority. 

To learn more about the Massachusetts-CMS partnership, view the Massachusetts proposal and MOU,  and to see proposals submitted by other states, visit: