Michigan Signs Memorandum of Understanding with CMS
April 22, 2014 07:56 AM
On April 3, the Centers for Medicare and Medicaid Services (CMS) and the Michigan Medical Services Administration (the State of Michigan) signed a Memorandum of Understanding (MOU) establishing the Medicare-Medicaid Alignment Initiative (MMAI) in a capitated model for beneficiaries eligible for both Medicare and Medicaid, or “dual eligibles.”
The new demonstration (the Demonstration) will begin no earlier than January 1, 2015, and continue until December 31, 2017.
Michigan’s MOU marks the eleventh MMAI MOU, after Massachusetts, Washington State (fee-for service), Ohio, Illinois, California, Virginia, New York, South Carolina, Washington State (capitated), and Colorado. Thirteen other states have active proposals submitted to CMS.
The MMAI is a joint federal and state project which seeks to improve care and reduce costs associated with dual eligible beneficiaries.
Minnesota has signed a dual eligible demonstration independent of the MMAI.
In Michigan, the Demonstration functions to enroll dual eligibles into managed care plans called Integrated Care Organizations (ICOs), and provide long-term care services and supports (LTSS). Starting no earlier than January 1, 2015, the Demonstration will eventually coordinate care to approximately 100,000 dual eligibles in four regions of the state. For the map of the regions, see page 35 of the MOU, here.
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, the State of Michigan, and the ICOs.
Included population. Dual eligibles who will qualify for the Demonstration include those who meet all of the following conditions:
At least 21 years of age at the time of enrollment;
Eligible for full Medicare Part A benefits;
Enrolled under Medicare Parts B and D;
Receiving full Medicaid benefits; and
Reside in one of the Demonstration’s regions.
Excluded population. Those excluded from the Demonstration are those who are:
Rreviously disenrolled from Medicaid managed care due to Special Disenrollment;
Additional Low Income Medicare Beneficiaries/Qualified Individuals (ALMB/QI);
Medicaid recipients residing in State psychiatric hospitals;
Those with commercial insurance; and
Those with elected hospice services.
Optional population. Beneficiaries of the MI Choice waiver program, Money Follows the Person (MFP) and the Program for All-inclusive Care for the Elderly (PACE) may enroll in the Demonstration only after disenrolling first from MI Choice, MFP, or PACE.
Overview of the Demonstration
Capitated model. Michigan has opted for a capitation model – meaning that CMS, the State of Michigan, and the ICOs enter into three-way contracts in which each plan receives a prospective blended Medicare/Medicaid payment to provide coordinated and comprehensive care. The State of Michigan will provide the ICOs the Medicaid component of the rate, while CMS will provide payments for Medicare Parts A, B, and D. ICOs may subcontract services.
Objectives. Key objectives for the Demonstration include: increasing access to supports and services for Medicare-Medicaid enrollees; promoting a person-centered model of care; reducing duplications and improving coordination between Medicare and Medicaid; improve quality of services, and reduced costs to CMS and the State of Michigan.
Emphasis on rebalancing. The Demonstration emphasizes shifting LTSS from the institutional setting to a home and community-based setting, thus creating opportunities for home care. Additional objectives include to: “eliminate barriers to and encourage the use of home and community based services”and for enrollees to: “live independently in the community.”
The ICOs are also tasked to “ensure that medically necessary services are provided” in the most integrated community setting, and in accordance with the enrollee’s wishes.Further, the ICOs must “inform the enrollee[s] of [their] right to live in the most integrated setting”and of “the availability of services necessary to support [their choices], and record the home and community-based options and settings considered by the enrollee[s].”
CMS and the State of Michigan - along with the ICOs - will coordinate all medically necessary Medicare and Medicaid Covered Services, including acute, behavioral health, LTSS, prescription drug, and primary care services. ICOs will contract with providers, including home and community based service providers and personal care aides. Patients can then choose from any participating providers.
Like the Colorado MOU, the Michigan MOU defines LTSS, although Michigan’s definition favors more integrated settings. In the Michigan MOU, LTSS is “a range of supports and services designed to meet an individual’s needs in the most integrated setting and to enable a person to live as independently as possible. LTSS are provided over an extended period, predominantly in homes and communities, but also in facility-based settings.”
HCBS waiver services. The ICOs will provide HCBS approved in 1915(b) and 1915(c) waivers, including: adult day program, chore services, expanded community living supports, community transition services, home delivered meals, private duty nursing, and respite. The ICOs will also provide supplemental benefits including community transition services and respite. For a full list of the HCBS waiver services and supplemental benefits, see pages 79-80, here.
Behavioral health, intellectual/developmental disabilities, and substance abuse disorders services. ICOs shall contract with Prepaid Inpatient Health Plans (PIHPs) for the provision of care for enrollees with behavioral health needs, intellectual/developmental disabilities and substance use disorders (BH, I/DD and SUD).
Services provided by PIHPs include: assertive community treatment, community living supports, home-based services, occupational therapy, personal care in licensed specialized residential setting, physical therapy, respite care services, speech, hearing and language, targeted care management, and telemedicine. For a full list of services provided through PIHPs, see pages 80-81, here. For a definition of PIHP, see page 26,here.
Flexible benefits. In addition, the ICOs can also offer Flexible Benefits, i.e. additional optional benefits outside of covered services, as defined in the enrollee’s Individual Integrated Care and Supports Plan.
Active enrollment. The Demonstration will contain two phases of opt-inenrollments, determined by region, when eligible individuals can voluntarily enroll in the Demonstration. These periods will last 30 days following notification.
Passive enrollment. Following active enrollment, the Demonstration will incorporate a passive enrollment model, whereby eligible individuals following the 30 day period described above do not make an active choice whether or not to be in the Demonstration. Passive enrollment will contain at least two phases, determined by region. However, beneficiaries receive advanced notice, and can opt out or disenroll up until the last day of the month prior to the effective date of passive enrollment. For the full details on enrollment, see pages 7 and 58-62, here.
Populations excluded from passive enrollment include those enrolled in MI Choice, MFP, or PACE, as well as those enrolled in employer-sponsored Medicare Advantage plans. For details, see page 7, here.
Uniform enrollment/disenrollment forms. The Demonstration will have uniform enrollment and disenromment forms and opt out letters, which both CMS and the State of Michigan will provide to stakeholders.
Prior to the signing of the Final Demonstration Agreement, each ICO will take part in a readiness review to make sure it is prepared to implement the Demonstration. For details, see page 27, here.
CMS and the State of Michigan will jointly set rates for payments to the ICOs, and have a reasonable expectation for ICOs to achieve savings. The rate settings will be based on four principles, including that:
Medicare and Medicaid will both contribute to the capitation payment based on baseline spending contributions;
ICOs are fully responsible for the covered services under the Demonstration;
The savings percentages will be applied equally to Medicare A/B and Medicaid; and
CMS and the State of Michigan will base their components of the blended rate from baseline spending rates, savings percentages, risk corridors, and other factors, as found in provisions of the MOU in pages 41-56, here.
Payment withholds. Both CMS and the State of Michigan will withhold a percentage of their payment components to the capitated rate, which will be awarded to the ICOs 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 ICO behavior.
Quality thresholds. Demonstration Year One quality thresholds incorporate standards relating to the same factors in the Washington State capitated MOU (encounter data, assessments, governance board, customer service, ability to get appointments and care quickly, and documentation of care goals), plus new measures including: care transition record transmitted to health care professional, and care for older adults’ medication review.
Unlike the Washington State capitated MOU, the Michigan MOU does not contain LTSS specific measures. Quality thresholds for Demonstration Years Two and Three incorporate more clinically-based quality measures, many of which are also in the Washington State capitated MOU, including: readmissions, annual flu vaccine, screenings, and follow-ups.
For the full lists of quality thresholds, see pages 49-53, here.
For the full list of quality metrics that the ICOs are required to report, see pages 96-113, here.
In-network rates. In-network payment rates to future providers are not detailed in the MOU. Those who wish to be network providers must prepare to negotiate payment rates.
Out-of network rates. Emergent or urgent services must be covered. For traditional Medicare services, the ICOs must pay out of network providers, “at least the lesser of the providers’ charges or the Medicare FFS payment amount.”
For traditional Medicaid services, the ICOs must pay out of network providers “at established Medicaid fees in effect on the date of service.”
For details on the out-of-network rates, see page 84, here.
ICOs are required to allow enrollees to keep their existing providers for varying times, depending on the patient population. Transition requirements for all providers, including home health, waiver services, and state plan personal care, can be found on pages 82-84, here.
Model of Care
ICOs must partner with contracted providers to implement an evidence-based model of care (MOC) that meets all CMS standards for Special Needs Plans (SNP). CMS will approve the MOC based on scoring of eleven clinical and non-clinical elements, and must achieve a score of at least 70% to be approved by CMS. The eleven clinical and non-clinical elements are the same as the eleven elements in the State of Washington’s capitated MOU:
Care management for the most vulnerable subpopulations;
Description of the plan-specific target population;
Health risk assessment;
Individualized care plan;
Integrated communication network;
Interdisciplinary care team;
MOC training for personnel and provider network;
Performance and health outcomes measurement;
Provider network having specialized expertise and use of clinical practice guidelines and protocols; and
Staff structure and care management goals.
Quality reviews of the ICOs for Medicaid services are provided by External Quality Review Organizations (EQROs). EQROs are independent entities contracting with the state to assess access, timeliness, and quality of care.
Network Adequacy and LTSS
In the Demonstration, LTSS will use Medicaid 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 standard more favorable to the enrollee.
Minimum LTSS standards. ICOs must have “at least two providers with sufficient capacity to accept enrollees, allowing enrollee choice of providers, including those providing supports coordination.”The state of Michigan can grant rural exceptions.
Personal care services. The ICOs must also provide Medicaid personal care services through “independent care providers of the enrollee’s choice.” Enrollees can choose to keep their existing provider of Medicaid personal care services so long as it meets Michigan’s qualifications.
For details on network adequacy, see pages 76-77, here.
Self-Determination and Care Management
Self-determination. ICOs must offer enrollees “self-determination”within LTSS, meaning that enrollees can choose their own LTSS providers given an individualized budget with the assistance of a fiscal intermediary. Beneficiaries can also choose how the LTSS are delivered, and have the right to hire and fire home care workers and personal attendants.
For the full definition of self-determination, see page 27, here.
Care bridge. The Demonstration will enable care coordination through the Care Bridge, where members of the enrollee’s care team can coordinate services and supports via an electronic Care Coordination platform. For the full definition of the Care Bridge, see page 21, here. Also, key to coordination of services and supports are the ICO Care Coordinator, the LTSS Supports Coordinator, and the PIHP Supports Coordinator.
For full explanation of their roles, see pages 27-28, and 68-72, here.
Assessment process. The assessment process will consist of an initial screening, a Level I Assessment, and a Level II Assessment. The Level I Assessment, among other things, will determine the enrollees’ BH, I/DD, SUD and LTSS needs, while the Level II Assessment will take a closer focus on these needs. The ICOs will conduct Level II Assessments in-person and within 15 days of the completion of the Level I Assessments. The ICOs will conduct annual reassessments thereafter for each enrollee. For details of the assessment process, see pages 63-66, here.
The State of Michigan will establish an Integrated Care Ombudsman Program that will serve independently of the ICOs. The Ombudsman will serve as an enrollee advocate. The Ombudsman will also serve to oversee the ICOs’ “compliance with principles of community integration, independent living, and person-centered supports and services in the home and community based care context.”
The Ombudsman needs permission from the enrollees to either access her records or to enter her care setting or home.
Minimum Medical Loss Ratio
The ICOs must spend at least 85% of their blended Medicare and Medicaid payments for patient care. If that ratio, called the Minimum Medical Loss Ratio (MMLR) falls below 85% for any given year, the ICO must remit the difference multiplied by the ICOs total revenue in the contract.
For details, see page 55, here.
Limited Cost Sharing
The ICOs will not be allowed to assess cost sharing for Medicare Parts A and B services, and cannot charge Medicare Parts C or D premiums. Co-pays are permitted for drugs and pharmacy products under Medicare Part D and Medicaid. No cost sharing besides that permitted above is allowed for Medicaid services.
For a full description of the Demonstration’s limited cost sharing provisions, see page 13, here.
No Balance Billing
Providers are not allowed to balance bill enrollees for services under the Demonstration.
For Enrollees who choose to receive Medicare hospice benefits, they will be disenrolled from the Demonstration, and put back on fee-for-service Medicare and Medicaid. For details, see page 82, here.
The Michigan MOU creates opportunities for home care providers, particularly:
Home care focused ombudsman. Unlike other MMAI MOUs, the Michigan ombudsman is more specifically tailored to protecting advocates in the home and community-based setting. Home care providers in Michigan should enhance their program integrity measures in light of this oversight mechanism.
Wide range of HCBS services. In addition to containing language favoring rebalancing to home and community-based services generally, the Michigan MOU provides a wide range of HCBS services, including HCBS waiver services. The MOU also provides for services often carved out of managed care, such as behavioral health and intellectual/developmental disabilities services, through subcontracts with Prepaid Inpatient Health Plans.
No specific LTSS quality thresholds. Unlike other MMAI MOUs like Washington State’s capitated MOU, the Michigan MOU lacks specific LTSS quality thresholds. The Council believes that specific LTSS quality thresholds could hopefully provide Demonstration health plans with more incentive to engage in LTSS, both in regards to utilization and quality. This in turn would create greater opportunities between plans and home care providers.
Unknowns. This MOU contains many of the unknowns previously uncovered by NAHC’s National Council on Medicaid Home Care in the other MOUs. The MOU does not give detailed information on provider compensation. While ICOs must partner with contracted providers to establish MOCs, it is unclear to what extent these providers, and home care providers specifically, will play a role. The MOU also does not mention if there are any quality standards to which home care providers will be held as part of the Demonstration.
Notwithstanding persistent stakeholder concerns (see here, here, and here) regarding MMAI, home care providers can look to MMAI as an opportunity to increased clinical coordination among the dual eligible population. In addition, MMAI will give home care providers rebalancing opportunities, as a stronger emphasis is placed on community based systems over institutional settings. Home care providers are encouraged to keep abreast of MMAI developments on CMS’ website, and to contact the Council with any questions or concerns.