California Signs Memorandum of Understanding with CMS - Becomes Fifth State to Adopt Medicare-Medicaid Dual Eligibles Initiative
April 12, 2013 04:11 PM
On March 27, 2013, the Centers for Medicare and Medicaid Services (CMS) and the California Department of Health Care Services (DHCS) signed a Memorandum of Understanding (MOU) establishing the Medicare-Medicaid Alignment Initiative (MMAI) in California (the Demonstration). California is now the fifth state to implement the MMAI, after Massachusetts, Washington, Ohio, and Illinois. Nineteen other states have active proposals submitted to CMS. The MMAI is a joint federal and state project that seeks to improve care and reduce costs associated with beneficiaries eligible for both Medicare and Medicaid – known as “dual eligibles.”
In California, the Demonstration is called Cal MediConnect, and is part of a larger initiative known as the Coordinated Care Initiative (CCI). The CCI functions to enroll dual eligibles into Medi-Cal (Medicaid in California) managed care plans, and provide all long-term care services and supports (LTSS). Starting in October 2013, the Demonstration will coordinate care to 456,000 dual eligibles in eight counties.
The MOU and its appendices “are not intended to create contractual or other legal rights between the parties,” so details will be provided in future three way contracts between CMS, DHCS, and the managed care plans.
Dual eligibles who will qualify for the Demonstration include those who meet all of the following conditions: 1) are 21 and older at the time of enrollment; 2) are entitled to Medicare Part A benefits, enrolled in Medicare Part B and D, and receive full Medicaid benefits; 3) are fully Medi-Cal eligible, including: a) those that are enrolled in the Multipurpose Senior Services Program (MSSP); b) individuals who meet certain share of cost provisions; c) are Medi-Cal eligible via the spousal impoverishment rule; 4) are a resident of one of the eight enumerated counties, and 5) those diagnosed with end-stage renal disease (ESRD) in either of two enumerated counties.
Those that will be excluded from the Demonstration include: 1) residents of Veterans’ Homes of California; 2) residents of enumerated rural zip codes; 3) individuals diagnosed with ESRD from any of six enumerated counties, unless an exception applies; 4) individuals with existing private or public insurance; and 5) individuals receiving care in state development centers, regional centers, or intermediate care facilities for the developmentally disabled.
Overview of the Demonstration
The Demonstration will begin no sooner than October 1, 2013, and continue until December 31, 2016. California has opted for a capitation model, where CMS, DHCS, and health plans (“Prime Contractor Plans”) enter into three-way contracts in which each plan receives a prospective blended Medicare/Medicaid payment to provide coordinated and comprehensive care. States will provide the Prime Contractor Plans the Medicaid component of the rate, while CMS will provide payments for Medicare Parts A, B, and D. Prime Contractor Plans may subcontract these services to Subcontracted Plans. Together, Prime Contractor Plans and Subcontracted Plans are referred to as “Participating Plans.”
Key objectives for the Demonstration include: improving beneficiary access of care and quality of care, promoting beneficiary independence and person-centered care planning, and reducing costs through improving care coordination. The Demonstration also creates a great opportunity for home care as it prioritizes re-balancing of care towards community-based systems and away from the institutional setting.
The Participating Plans will coordinate all medically necessary Medicare and Medicaid Covered Services, including acute, behavioral health, LTSS, prescription drug, and primary care services. In addition, Participating Plans will provide vision and dental care, and non-emergency medical transportation. Unlike the Illinois MMAI MOU, the California MOU defines LTSS. LTSS contains both services delivered in the home and community, as well as in the nursing facility. For the full definition, see p. 30, here.
The Demonstration will focus on shifting LTSS from the institutional setting to a community-based setting. Specifically, Participating Plans must give enrollees benefits “in a care setting appropriate to the beneficiary’s needs, with a preference for the home and community…in the least restrictive community setting, and in accordance with the enrollee’s wishes and Individual Care Plan.”
At least sixty days prior to the effective date of enrollment, those eligible for the Demonstration will be notified of their option to select a Participating Plan. These individuals will be able to opt out of the Demonstration “up until the last day of the month prior to the effective date of enrollment.” Passive enrollment into the Demonstration may occur when an eligible individual does not make an active choice whether or not to be in the Demonstration, but beneficiaries can voluntarily choose to enroll or disenroll at any time. Before the effective date of enrollment, beneficiaries that would otherwise be passively enrolled will have the opportunity to opt out with sufficient notice to do so. Disenrollments and transfers to other Participating Plans will be allowed on a month-to-month basis throughout the year, effective on the first day of the month following such request. Enrollments, opt-outs, and transfers will be effective on the first of the month both for Medicare and Medicaid. Medicaid coverage will continue for those losing eligibility through the end of that month.
CMS and DHCS will jointly set rates for payments to Prime Contractor Plans, and have a reasonable expectation for Prime Contractor Plans to achieve savings. The rate settings will be based on four principles, including that: 1) Medicare and Medicaid will both contribute to the capitation payment based on baseline spending contributions; 2) Prime Contractor Plans are fully responsible for the covered services under the Demonstration; 3) the savings percentages will be applied equally to Medicare A/B and Medicaid; and 4) CMS and DHCS will base their components of the blended rate from baseline spending rates, savings percentages, risk adjustments, and other factors, as found in provisions of the MOU in pages 43-52, see here.
Both CMS and DHCS will withhold a percentage of their payment components to the capitated rate, which will be awarded to the Prime Contractor Plans subject to meeting established quality and other thresholds. The withhold amount will be 1% in Demonstration Year 1, 2% in Demonstration Year 2, and 3% in Demonstration Year 3. It remains to be seen whether or not this withhold will influence Prime Contractor Plan behavior.
Demonstration Year One quality thresholds incorporate standards relating to the same factors in the Illinois MMAI MOU (encounter data, assessments, customer service, and ability to get an appointment quickly), plus additional standards regarding behavioral health policies and procedures and case manager contacts. Quality thresholds for Demonstration Years Two and Three incorporate more clinically-based quality measures, many of which are also in the Illinois MOU, including: readmissions, annual flue vaccine, screenings, and follow-ups. Interestingly, the California MOU does not contain the LTC specific measures found in the Illinois MOU, i.e. those relating to those moving from institutional care to waiver services, and prevalence of pressure ulcers in long term care residents. However, it does contain quality thresholds for Demonstration Years Two and Three not found in the Illinois MOU, such as standards relating to reduction in emergency department use for seriously mentally ill and substance use disorder enrollees, documentation of care goals, and case manager contacts. For the full lists of quality thresholds, see p. 52-54, here.
Payment rates to future providers are not out in the MOU with the exception of non-network providers (excluding In-Home Support Services (IHSS) providers) which will be paid at traditional Medicare or Medicaid FFS rates, as applicable. That means that those who wish to be network providers must prepare to negotiate payment rates.
Obligations of the Participating Plans
Within 90 days of an individual’s enrollment, Participation Plans must conduct an individual assessment. The assessment process will serve to identify current providers and develop a care plan detailing coordination and continuity of care. Participating Plans must permit beneficiaries to keep their current providers and service authorizations for a period of six months following enrollment for Medicare services, and twelve months following enrollment for Medi-Cal services, given certain requirements are met. The Medi-Cal provision does not apply to IHSS providers. IHSS are consumer-driven personal services for the aged, blind, or disabled. For a full definition of IHSS, see p. 29, here.
Model of Care
Participating Plans must partner with contracted providers to devise an evidence-based model of care (MOC) modeled after the Special Needs Plan (SNP) Model of Care. CMS will approve the Participating Plan based on scoring of eleven clinical and non-clinical elements of the MOC, and must achieve a score of at least 70% to be approved by CMS. CMS will approve those that achieve a score of 70%-74% for one year, those that score 75%-84% for two years, and those that score 85% or higher for three years. The eleven clinical and non-clinical elements are the same as those in the Illinois MOU, and are: 1) care management for the most vulnerable subpopulations; 2) care plan; 3) description of the plan-specific target population; 4) health risk assessment; 5) integrated communication network; 6) interdisciplinary care team; 7) measurable goals; 8) MOC training for personnel and provider network; 9) performance and health outcomes measurement; 10) provider network having specialized expertise and use of clinical practice guidelines and protocols; and 11) staff structure and care management goals.
Provision of IHSS
Participating Plans shall give access, provision, and payment for IHSS to eligible individuals, and Participating Plans will assume all financial liability for IHSS services.
Prime Contractor Plans will enter into a Memorandum of Understanding (MOU) with participating counties, whereby the counties will: 1) “assess, approve and authorize” initial and continuing IHSS services for each enrollee; 2) enroll IHSS providers; 3) conduct criminal background checks on all potential IHSS providers; 4) establish a registry of eligible IHSS providers for beneficiaries; and 5) pursue overpayments, as well as other functions.
Network Contracts and LTSS Standards
Unlike the Illinois MOU, the California MOU does not call for a specific number of network contracts. Instead, Participating Plans must contract with a “sufficient number of health facilities and providers” to “meet enrollees’ needs.” Each Participating Plan must maintain an “adequate number” of long-term care providers within each service area within its provider network. Further, Participating plans must either employ or contract out care management services for long-term services and supports. Care management is defined in the California MOU as “a set of services provided by a Clinical Care Manager that comprise intensive monitoring, follow-up, care coordination, and clinical management of high-risk enrollees.” Participating Plans also have discretion to contract with licensed and certified nursing facilities.
Under Medi-Cal, each Prime Contractor Plans must have an IHSS Memorandum of Understanding or contract with an applicable county social service agency regarding provision of IHSS. Also, Prime Contractor Plans must contract with the Department of Social Services, addressing, among other things, 1) pay wages to IHSS providers and 2) referral and care coordination processes to promote the integration of IHSS into managed care.
In the Demonstration, long term services and supports will use Medi-Cal network adequacy standards, whereas Medicare standards will be used for the services for which Medicare is primary, like pharmacy benefits. Home health, in addition to other services where Medicaid and Medicare overlap, shall use the more stringent of the applicable Medicare and Medi-Cal standards.
Discretionary Home and Community-Based Services
Participating Plans have discretion to offer Home and Community-Based Services (HCBS), where appropriate. The Plans can provide HCBS either to: 1) enhance an enrollee’s care, allowing him to avoid institutionalization by keeping him cared for in his own home, or 2) to provide additional personal care services for those already receiving IHSS. Participating Plans may provide additional HCBS, including: 1) care in licensed residential care facilities; 2) home maintenance and minor home or environmental adaption; 3) in home skilled nursing care and therapies services for chronic conditions; 4) medical equipment operating expenses and Personal Emergency Response System (PERS); 5) non-emergency medical transportation; 6) non-medical transportation; 7) nutritional supplements and home delivered meals; 8) respite care (in home or out-of-home); 9) supplemental chore; 10) supplemental personal care services; and 11) supplemental protective supervision.
Limited Cost Sharing
Participating Plans will only be allowed to assess limited cost sharing: they will not be allowed to assess cost sharing for Medicare Parts A and B services, and cannot charge Medicare Parts C or D premiums.
Integration and Self-Direction
Participating Plans must offer person-centered medical homes with interdisciplinary care teams. The California MOU does not explicitly refer to the medical homes providing referrals for LTSS, as it does in the Illinois MOU. However, the California MOU does not highlight who the care coordinator is, or what the qualifications of the interdisciplinary team are.
Beneficiaries will have the right to self-direct care, i.e., where appropriate, they will have input on 1) what types of LTSS they will receive; 2) what health care providers they will have within their Participating Plan networks; 3) control of care planning and coordination; and 4) the interdisciplinary care team’s composition. Beneficiaries will have the ability to hire, fire, and supervise personal care providers.
Prohibition Against Balance Billing
Providers will not be allowed to balance bill enrollees for covered services.
Universal LTSS Assessment Process in 2015
In 2015, California will develop and test a universal assessment process and tool for LTSS. This process will be tested on a selected group of beneficiaries and counties.
Hospice and the Participating Plans
An enrollee in the Participating Plan receiving Medicare hospice services will do so through Medicare Fee-For-Service (FFS), and the Participating Plan would not receive a Medicare Part C payment for that Enrollee. In addition to Medicare hospice services, Medicare FFS would also pay for hospice drugs and all other Original Medicare services. While the MOU does not go into detail on this matter, Participating Plans and hospice service providers would be responsible for coordinating the Enrollee’s care, including these services, Medicaid, Part D benefits, and other Participating Plan services. All non-hospice covered drugs would be reimbursed to the Participating Plan via the Medicare Part D payment. Medicaid services, as well as payments for hospice enrollees, must also abide by 1115(a) waiver requirements.
While the Demonstration will transform the way that dual eligibles receive care, many unknowns remain for providers, and home health providers specifically. The MOU does not cover how providers will be compensated, and any limitations on what they can charge outside of the balance billing prohibition. While Participating Plans must partner with contracted providers to establish MOCs, it is unclear to what extent these providers, and home health providers specifically, will play a role. The MOU also does not mention if there are any quality standards to which home health providers will be held as part of the Demonstration.
That said, home health providers can look to MMAI as an opportunity to increased clinical coordination among the dual eligible population. In addition, MMAI will give home health providers rebalancing opportunities, as a stronger emphasis is placed on community based systems over institutional settings. Home health providers are encouraged to keep abreast of MMAI developments on CMS’ website, and to contact NAHC with any questions or concerns.