Fact Sheets

TESTING FINANCIAL MODELS TO SUPPORT STATE EFFORTS TO COORDINATE CARE FOR MEDICARE-MEDICAID ENROLLEES

The Centers for Medicare & Medicaid Services (CMS) provided guidance to States on opportunities to test two new financial models designed to help States improve quality and share in the lower costs that result from better coordinating care for individuals enrolled in Medicare and Medicaid Medicare-Medicaid enrollees).  

HHS is working to increase the number of Medicare-Medicaid enrollees in systems that coordinate care. Coordinated care may improve the quality of care these individuals receive and reduce costs for both States and the Federal government. 

A longstanding barrier to coordinating care for Medicare-Medicaid enrollees has been the financial misalignment between Medicare and Medicaid.  To address this, CMS seeks to 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 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.

The CMS Center for Medicare and Medicaid Innovation will test these models to determine whether they save money while preserving or enhancing the quality of care for Medicare-Medicaid enrollees.  Interested States can send a letter of intent and work with CMS to determine whether they meet established standards and conditions.  The Innovation Center will approve qualifying States that collectively serve up to 1 to 2 million dual eligibles. 

Qualifying States will have an option to pursue either or both of these financial alignment models.    As an initiative of the Innovation Center, 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.

CMS has released a State Medicaid Directors’ letter to provide more detailed information to States interesting in pursuing these two new options.

The State Medicaid Directors’ letter is available at https://www.cms.gov/SMDL/SMD/list.asp and additional information will be available soon at http://www.cms.gov/medicare-medicaid-coordination/.