Aligning Incentives Between Medicare and Medicaid for

Dual Eligibles

February 2009Pamela Parker

Special Needs PurchasingMinnesota Department of

Human Services pam.parker@state.mn.us

Systems for the Future States have increasing proportions of people age 65 years and

older and people with disabilities with chronic conditions. How can States prepare for this fiscal and care delivery challenge?

95% of seniors and about 50% of adults with disabilities on Medicaid are dually eligible for Medicare. Current care for dual eligibles is clinically fragmented and confusing to beneficiaries.

States need to focus on building systems that can address chronic care management across both Medicaid and Medicare including primary, acute, drug coverage, home and community services and other LTC.

The Medicare Advantage Special Needs Plan (SNP) option provides a vehicle for integrating Medicare and Medicaid benefits to develop clinical systems that manage underlying chronic conditions across primary, pharmacy, acute and long term care.

But barriers still remain for many States in contracting with SNPs, and stronger fiscal incentives are needed for more States to move forward with integrated arrangements.

MA-SNP Snapshot 769 Medicare Advantage SNPs operating in 2008: 1.1 million

enrollees Dual Eligible Chronic and Disabling Institutional

439 DE SNPs: 844,000 enrollees Coordinated dual eligible programs exist in MN, MA, WI,

NY, FL, TX, WA, AZ, CA, KY, OR, UT. VA, PA, MI, NM among States working on new programs Other States contracting with SNPs or MA plans for cost

sharing wrap Moratorium still in place for expansion of current DE SNPs

and for new SNPs for 2010 unless a state contract is in place Current DE SNPs encouraged but not required to have a state

contract CMS support for SNP/State relationships, tools and

resources: http://www.cms.hhs.gov/IntegratedCareInt/

Congress and CMS are Making SNPs “More Special” MIPPA and new SNP rules (9-15-08)hold SNPs to additional standards:

Clinical model of care designed for needs of enrolled population Network appropriate for population served Use of care plans, interdisciplinary teams, comprehensive initial

and annual assessments Use of nationally recognized clinical protocols Ongoing measurement of quality and health status improvement

indicators Dual SNPs to have relationship to State, Medicaid contracts required for new SNPs, States not required to

contract Cost sharing and Medicare coverage information to prospective

dually eligible enrollees MIPPA extends SNP authority through 2010 MIPPA also provides stricter marketing requirements CMS has directed NCQA to develop additional Structure and Process

measures including new measures on Medicare and Medicaid Integration

Opportunities for Aligning Incentives

SNP/State contracting with comprehensive Medicare/Medicaid capitations can align fiscal incentives and reduce cost shifting between acute and long term care: Reduce fragmentation of delivery and coverage

and simplify access (all drugs and medical services provided under the same plan)

Align incentives for assessment, early intervention and management of chronic conditions which cause hospitalizations and lead to additional Medicaid LTC placements

Support clinical systems improvement of outcomes, prevention, and chronic care management

Increase accountability for controlling total costs and tracking outcomes of care across payers and providers

Opportunities for Aligning Incentives

Access to primary care management and Medical Home models for duals not otherwise possible in FFS Medicare

State contracts can be used to leverage additional Medicare benefits, Medicare encounter data, information sharing about Part D, appropriate formularies, care coordination, etc.

Simplified enrollment, integrated member materials, clarify total benefits for duals available across both Medicare and Medicaid

Manage capitated long term care benefits to assist state with “rebalancing” goals (align SNP and State interests in managing risk for placement of community members in NFs)

Barriers to Aligning Incentives

Lack of clear financial incentives for States, such as sharing in Medicare savings

Uncertainty about future of SNPs, evolving SNP policy at CMS, not clear what authority exists after 2010.

Uncertainty about new administration plans for health reform, and impact on Medicare and Medicaid and roles for current DE SNPs

Uncertainty about future Medicare base rates, Medicare cuts and impact of changes in bid processes

Conflicts between mandatory Medicaid enrollment and voluntary Medicare enrollment

Difficult to align Medicaid and Medicare procurement and contracting processes and timing

Misaligned SNPs (may be different entities from established Medicaid managed care MCOs)

Conflicts or duplication between Medicare and Medicaid requirements may add complications

Very difficult to measure results, may take years to demonstrate change

Barriers to Aligning Incentives

Advocacy concerns about medical model and health plan lack of knowledge of community based services

Political opposition from institutional and residential providers

Loss of role for entities currently in charge of managing HCBS (AAAs or counties, etc)

Requires robust managed care infrastructure Takes planning, resources and many changes in

operations to take full advantage of the opportunities

Easy to recreate all of the misaligned incentives by following FFS patterns even in managed care

Future of Integrated Programs Better fiscal incentives needed to encourage more

States to coordinate with SNPs, Congress reluctant to allow share of Medicare savings

Potential Medicare marketplace instability due to cuts in Medicare payments for “rural floor”, increased requirements, reauthorization needed prior to 2010

MIPPA and SNP rules put pressure on SNPs to approach States for contracts, but States not required to contract

MIPPA requires CMS to provide support to States related to coordination of care for duals, but no money appropriated

Future of Integrated Programs CMS supportive of concepts but siloed

operations limit responsiveness New State Plan Preprint on coordination with

SNPs could be useful to States, SNPs and CMS in more formal recognition of integrated features

Models that integrate Medicare and Medicaid have made gains slowly but surely over the past 15 years

Bipartisan recognition of value of integrated SNP arrangements could be useful in any future health reform efforts

Demographics and fiscal crisis require change Has anyone got a better idea?

Minnesota’s Managed Minnesota’s Managed Care Programs Care Programs

How Minnesota’s Programs Align Incentives Between

Medicare and Medicaid

MN Managed Care Mandatory statewide Medicaid managed care program since 1985:

PMAP/Minnesota Care: DHS contracts with 9 local non profit HMOs/CBPs to provide services to about 447,000 families, non-disabled adults and children

Minnesota Senior Care Plus (MSC+): Most Medicaid seniors 65+ including dual eligible enrollees and NF residents required to enroll since 1985. Includes LTC services of PCA, home and community based and 180 days of nursing home services

Voluntary statewide integrated Medicare/Medicaid SNP programs, no special waivers required: Minnesota Senior Health Options (MSHO): Began 1997, 83

counties, includes LTC services, contracts with 9 dual SNPs Minnesota Disability Health Options (MnDHO): Began 2001,

includes LTC services, enrolls people with physical disabilities through contract with 1 SNP, operates in 7 county metro area only

SNBC: Began 2008, integrated Medicare/Medicaid for all people with disabilities, does NOT include PCA and most home and community based services, 83 counties, contracts with 7 SNPs

Seniors Managed Care Programs MSHO (83 counties)

36,500 members

MSC+ (87 counties, added 7 county metro 1/09 and phased out MSC )

11,400 members

Enrollment Voluntary (alternative to MSC/MSC+)

Mandatory

Medicare Services

All Medicare services including Part D drugs through Medicare Special Needs Plan (SNP)

Medicare A/B services through Medicare FFS.

Part D drugs through separate Medicare drug plan

Medicaid Basic Care Services

Medicaid basic care services (includes PCA) and remaining drugs through same SNP

Medicaid only plan provides basic care (includes PCA) and remaining drugs

Medicaid Long Term Care Services

Elderly Waiver (EW) through SNP plus 180 days of nursing home care

EW through same plan plus 180 days of nursing home care

MN Seniors Managed LTC Rate Setting Summary MSHO and MSC+

Rate CellServices

Institutional (SNF/NF) Community with HCBS

Community without HCBS

Medicare Risk Adjusted Risk Adjusted plus frailty factor (being phased out)

Risk Adjustment

Medicaid Primary/Acute

Plan specific rate based on blend of plan costs and external factors w age, sex, region, and Medicare status

Plan specific rate based on blend of plan costs and external factors, adjusted for age, sex, region and Medicare status

Long Term Care Health plan liable for 180 days SNF/NF care for all community enrollees FFS NF payment locked out until liability met Health plan liable for Medicare SNF stays for all members

NF Add-on (for Medicaid stays based on expected use- LOS, cost, admission rates as set by State) for community members

HCBS payment is based on average FFS cost, adjusted for age, sex and metro/non metro

NF for enrollees already in institution and for community member stays after liability is met is paid FFS by the State.

Recent Program Developments Original MSC (PMAP) program for seniors phased out effective

1/2009 MSC+ now operates statewide, all 97 counties Most Medicaid seniors now required to enrolled in managed long

term care through MSC+ or may choose MSHO as voluntary alternative

RFP issued February to re-procure for MSHO and expand MSHO to remaining four uncovered counties in north (Hubbard, Beltrami, Clearwater and Lake of the Woods).

All plans must respond to RFP to remain in MSHO in existing counties

RFP also issued for SNBC for 7 county metro area to allow for additional SNPs to participate in metro area and to expand to the four additional northern counties.

Responses due in late April

MN Integrated Program Features Coordinated access to ALL Medicare A,B, D and Medicaid drug

benefits under one source Integrated Medicare and Medicaid enrollment forms and process

and member materials, State model materials for all plans Initial and annual risk screening and follow up assessments for all

members Facilitation of physician relationship and annual primary care visits Care Coordination: Each enrollee assigned a care coordinator or

health service coordinator who assists with coordination of primary, acute and LTC services, or for SNBC, care navigation assistance

Coordinated authorization and approval for both benefit sets, providers bill one place for all services

PIP Collaboratives: SNPs collaborate on design of QI interventions to focus efforts on the same clinical topics

State led workgroups with all SNPs at the table on care coordination, audit requirements, best practices

State acts as TPA under contract with SNPs to process and submit Medicare enrollment, this enables enrollments to remain integrated

Typical Dual Eligible Drug Coverage

Dual Goes to Pharmacy for Drugs: Must Present 3 Different Cards

Medicare Part D Drugs Medicare Part B Drugs Medicaid Drugs

Medicaid Card

Medicare Card and Medicaid CardPart D Plan Card

Medicaid pays 20% cost sharing, pharmacy or provider bills DHS separately

Integrated Drug Coverage

MSHO, MnDHO, SNBC Enrollee Takes 1 Card to Pharmacy

Medicare Part D drugs

Medicare Part B drugs

Medicaid drugs

20% Medicare Cost Sharing covered

Care Management Strategies Initial risk screening and assessment of members for early identification Includes collection of ADLs/assessment info and direct entry to State

system Assigned follow up schedules for calls and home visits for members All community members screened for community services with quick

implementation Care coordinators facilitation of annual primary care preventive visits

State provides performance incentive payments for certain types of visits

Care coordinator attendance at key physician visits Nurse Practitioner models most effective for NF members

Requires cooperation of nursing facilities, monthly meetings with providers

Provider training and care coordinator back up Immediate starting of IVs for infections State sponsored workgroup on improved care management models

for NF members with focus on issues for rural areas Tiered subacute rates for certain SNF stays Waiver of 3 day hospital stay requirement Payment of in lieu of days or ISU in SNFs Additional provider training on falls prevention, urinary incontinence

management Fast track intervention strategies/protocols on key chronic conditions

Case Study Example MCO authorizes additional Intensive Service Day payment to

nursing home for 70 year old resident who needs highly intensive rehabilitative care, wheel chair bound, ventilator dependent, and post polio with tracheotomy and wound care. This reduces need for additional hospitalizations.

MCO provides regular check in by Care Manager with nursing facility to monitor care.

At first resident is expected to remain in nursing home long term because of dependence on vent so after 100 day Medicare stay is over, MCO pays for nursing home care under Medicaid managed care custodial care benefit.

Resident becomes more motivated to wean from vent and return home.

Additional respiratory therapy provided reduces need for ventilator. Care Coordinator develops Community Support Plan for return

home. Community based services are arranged (ramp, home health aide

and RN visits, Lifeline). About six months after entering nursing home, resident returns

home with more control over managing health and independence. This case study is courtesy of Blue PlusOther health plans also have similar case studies

Participating MSHO SNPs and MSC+ Health Plans for Seniors

Blue Plus First Plan Health Partners Itasca Medical Care Medica Metropolitan Health Plan Prime West South Country Health Alliance UCare Minnesota

46.8%

24.0%29.2%

51.2%

31.3%17.4%

34.9%39.6%25.5%

29.1%

35.7%

35.1%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Senior Enrollment by Program and Setting of Care March 2008

NF 1,882 1,116 1,143 12,461

NHC 1,549 2,007 1,774 12,677

CO 3,023 3,281 1,563 10,338

FFS MSC MSC + MSHO

86.0%

3.9%

10.1%

71.2%

28.8%

62.3%

33.0%

4.7%

74.5%

25.5%

68.3%

24.7%

7.1%

53.4%

42.9%

3.7%

88.6%

11.4%

70.1%

29.9%

85.0%

9.3%

5.6%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Managed Care Senior Enrollment by Health Plan March 2008

MSC + 1,178 389 192 158 875 55 262 826 545

MSC 453 - 1,357 - 3,051 638 - - 905

MSHO 10,029 960 2,563 462 8,444 795 2,042 1,935 8,246

Blue PlusFirst Plan

BlueHealthPartn

ers

Itasca Medical

CareMedica Metro HP

Primew est Health System

South Country Health

UCare Minnesota

Minnesota Medicaid Elderly Waiver Recipients March 2008

Fee-for-Service, 1,549, 9% MSC, 2,007,

11%

MSC +, 1,774, 10%

MSHO, 12,677, 70%

Total Recipients: 18,007

MnDHO (1,033 Enrollees)

Special Needs Basic Care (2672 Enrollees)

Enrollment Voluntary, people with primary physical disabilities in 7 county metro and with DD in 3 counties, limit of 120 DD

Voluntary, open to all Medicaid dually eligible and non dually eligible with disabilities in 83 counties)

Medicare Services

All Medicare services including Part D drugs through Medicare Advantage SNP

All Medicare services including Part D drugs through Medicare Advantage SNP

Medicaid Basic Care Services

Most Medicaid services provided through same SNP plan including remaining drugs and PCA services

Most Medicaid services provided through same SNP plan including remaining drugs except PCA and PDN which remain Fee for Service

Medicaid Long Term Care Services

Medicaid CADI/TBI waiver though same SNP plan plus 180 days of Medicaid nursing home care

Medicaid HCBS waivers and long term care services remain Fee for Service except for the first 100 days of nursing home care

Disability Managed Care Programs

Summary of Key SNBC Contract Requirements

Risk screening within 30 days of enrollment Medical home/Primary Care Clinic Facilitation of annual physician visits Broad availability and access to specialists, transportation and

specialty DME suppliers Additional case management or navigation assistance included.

Some plans have contracted with counties to provide this assistance. 24/7 RN call lines Coordination of Medicare and Medicaid drug coverage Simplified/integrated Medicare and Medicaid enrollments, materials

and appeals processes Disability training for member services Survey and provide information to enrollees about clinic accessibility Clinical measures appropriate to people with disabilities Accessibility surveys of primary care clinics Communication protocols for working with counties and providers

who are highly involved (eg residential, home health) Health plans will cover Medicaid co-pays for both duals and non

duals. Health plans required to provide provider training

Minnesota Disability Health Options (MnDHO)

Enrollment voluntary, 1100 enrollees Operating since 2001in 7 county metro only Includes Medicare and Medicaid services including all

drugs under one SNP Includes most long term care services (SNF/NF, PCA,

PDN and home and community based waivers including CADI andTBI services)

MnDHO-PD primarily enrolls people with physical disabilities but enrollees may have mental health needs as well

MnDHO payments for acute care through same CDPS risk adjustment system as for SNBC, LTC risk adjustment is through separately developed MN specific system.

Minnesota Disability Health Options (MnDHO)

One SNP, UCare, “UCare Complete”: Physical Disabilities Program: Axis HealthCare

provides care management for people with physical disabilities

DD Pilot: Partners Choice Network for DD pilot (MORA, Fraser, LSS) limited to maximum of 120 enrollees, includes DD waiver services

Very intensive care management and comprehensive services provided to high needs group, strong focus on chronic care issues and prevention.

Good evaluation results, however costs difficult to manage.

Expansion on hold per legislation until after July 2009 However, DHS does not plan any expansions for after

2009 at this time

Stakeholder Involvement DHS developed SNBC with the assistance of a broad

group of stakeholders, including disability advocates, consumers, counties, providers and health plan representatives.

This Statewide group will continue to meet to provide input to DHS in monitoring and oversight of SNBC. The group meets quarterly and meetings are open to the public. Contact Cindy Czech 651-431-2514 to be added to

the mailing list. Each health plan participating in SNBC is required

to have a similar local stakeholder’s group. This is a great opportunity for consumers and

health plans to work together to improve SNBC on an ongoing basis.

How Does SNBC Work? There are no premiums or additional costs for enrolling in SNBC. Members must volunteer to enroll by signing an enrollment form or

having their guardians or authorized representatives sign it and sending it to the health plan.

Members can drop out in any month by sending a written request to the State or the health plan (effective the 1st of the next month)

Health plans and DHS are responsible for outreach and marketing to potential enrollees.

Health plans must follow all CMS and DHS marketing requirements. All member materials must be reviewed and approved by CMS and DHS. County staff are not responsible for enrollment and marketing but may be

consulted by potential enrollees and may assist them if requested. SNBC plans will waive Medical Assistance co-pays for all members (CMS

will not allow plans to waive Part D co-pays) People with medical spenddowns can enroll but must pay their

spenddowns to a designated provider or to the State or be disenrolled SNBC plans may offer additional Medicare benefits such as fitness

programs, or home safety equipment, podiatry care, or extra dental care The Disability Linkage Line is available for consultation for people

seeking help with SNBC, MnDHO and other Part D choices. 1-866-333-2466

All current appeal rights are included as well as some additional protections including DHS Ombudsman for Managed Care services

1-800-657-3729

SNBC Payments Medicaid payments to the health plans are “risk

adjusted” based on the diagnoses and costs of each individual enrollee through the Chronic Disability Payment System

Payments have been specially adjusted to include additional provisions for mental health services and needs

This system will provide higher payments to health plans who enroll high cost enrollees, and lower payments for those who enroll more low cost enrollees

Payments are designed to be budget neutral to current fee for service costs for enrollees

Medicare also provides a separate risk adjusted payment for dual eligible enrollees

2008 SNBC Health Plans

Blue Plus CareBlue Special Needs Basic Care

First Plan First Plan Blue Basic

Medica AccessAbility Solution

Metropolitan Health Plan Cornerstone Solutions

Prime West Prime West Special Needs BasicCare

South Country Health Alliance Ability Care

UCare UCare Connect

Results of Integrated Programs

Several evaluations prior to MSHO expansion show some positive utilization results, no harm being done

MSHO showed increased access to HCBS, increased caregiver support, and reductions in expected use of nursing home

MSHO satisfaction higher than MSC, low disenrollment

Care coordination studies of MSHO show value to members in a variety of care coordination models

MSHO costs have been under control

Results of Integrated Programs

Too soon after large 2006 expansion to have new evaluation of MSHO

Recent evaluation of care coordination models in MSHO is on DHS website

MnDHO evaluation shows dramatic changes in consumer access to preventive and primary care, but also higher costs

SNBC evaluation planned Other States following MN in developing

similar programs

Contact InformationState Website:

http://dhsinfo.dhsintra.net/main/groups/public/documents/pub/infolink_dhs_today.hcsp

Pam Parker, ManagerSpecial Needs Purchasing DHSPam.parker@state.mn.us651-431-2512

Sue Kvendru, Program CoordinatorSue.kvendru@state.mn.us651-431-2517

Deb Maruska, Program CoordinatorDeb.maruska@state.mn.us651-431-2516

Cara Bailey, Policy CoordinatorCara.bailey@state.mn.us651-431-2515

Special Needs PurchasingSpecial Needs PurchasingMinnesota Department of Human Minnesota Department of Human

Services Services

Pamela Parker Pamela Parker pam.parker@state.mn.us pam.parker@state.mn.us

651-431-2512 651-431-2512