The state of Washington will become the first state to partner with the Centers for Medicare and Medicaid Services (CMS) in the Financial Alignment Demonstration to test a managed-fee-for-service model for providing Medicare-Medicaid enrollees with a more coordinated, person-centered care experience.

Through the Demonstration, Washington will use a managed-fee-for-service care model that will build upon its planned Medicaid Health Homes targeting Medicare-Medicaid enrollees with chronic health conditions.  The program is planned to launch on April 1, 2013.

Medicare-Medicaid Enrollees

Improving the care experience for low-income seniors and people with disabilities who are Medicare-Medicaid enrollees – sometimes referred to as “dual eligible individuals” – is a priority for CMS.  Currently, Medicare-Medicaid enrollees navigate multiple sets of rules, benefits, cards, and providers (Medicare A/B, Part D, and Medicaid).

Many Medicare-Medicaid enrollees suffer from multiple or severe chronic conditions and could benefit from better care coordination and management of health and long-term services and supports.

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.

In August, Massachusetts became the first state to enter a Memorandum of Understanding (MOU) with CMS to participate in the Demonstration and test the capitated Financial Alignment model.  CMS is currently working with other states to develop their Demonstration models.  All Demonstrations will be evaluated to assess their impact on the beneficiary’s care experience, quality, coordination, and costs.

The Washington Demonstration

Washington is the first state to enter into a Memorandum of Understanding to participate in the new managed-fee-for-service Demonstration to integrate the service delivery across primary, acute, prescription drugs, behavioral health and long-term supports and services.  Washington will be eligible to receive a performance payment based on its performance on beneficiary experience, quality and savings criteria.

Through the Demonstration, Washington will build upon its planned Medicaid Health Homes targeting Medicare-Medicaid enrollees with chronic health conditions.  As a result over 20,000 Medicare-Medicaid enrollees in Washington will have an opportunity for better, more coordinated care. Beneficiaries will be free to choose whether to receive these new services, and will continue to have access to the same Medicare and Medicaid benefits.

Leveraging its innovative modeling system, Predictive Risk Intelligence SysteM (PRISM), to inform care interventions, Washington will be able to better identify Medicare-Medicaid enrollees’ health care needs.

Medicare-Medicaid enrollees participating in the new Demonstration will have the ability to shape and direct their care through a person-centered model built around their needs and preferences.  As part of this approach, Medicare-Medicaid enrollees in the Demonstration will have a care coordinator, working with a multidisciplinary care team, who is responsible for their overall care coordination and comprehensive care management.  Washington will expand coverage to additional services provided through the Health Home such as individual and family supports, transitional care services, and referral to community supports and services.

Putting the Beneficiary First

Under the Demonstration, each Medicare-Medicaid enrollee will have a care coordinator working with a collaborative care team responsible for their comprehensive care management.  Participants in the Demonstration and their families will have access to enhanced services to help support the family and caregivers as well as improve coordination of care and improve the beneficiary care experience.  In addition, the new care programs will promote access to community supports and services.

Comprehensive evaluation

CMS will sponsor an independent evaluation of the demonstration to assess its impact on person-centered outcomes, service utilization and program costs. CMS will measure quality including the beneficiary overall experience of care, care coordination, beneficiary care transitions, and support of community living in Washington. The evaluation will use a comparison group to identify any changes in quality and cost.

A Transparent Process Supporting Public Input

The Washington Demonstration is the culmination of an extensive planning and development process through which the public helped shape the Demonstration’s design:

• Washington hosted several forums to solicit public involvement, including beneficiary focus groups.
• The state also posted its draft proposal for public comment and incorporated the feedback into its Demonstration proposal before officially submitting it to CMS.
• CMS then posted the proposal for public comment and worked with both local and national partners to ensure a broad range of perspectives were captured in the overall Demonstration.

Additional Information

The Demonstrations will be administered under the Center for Medicare & Medicaid Innovation authority.  Additional information about the Washington Demonstration, including the MOU, is publicly available.

See the CMS Fact Sheet on this topic.