On November 28, 2012, CMS released a memorandum directed at health plans selected as Medicare-Medicaid plans (MMPs) in state dual-eligible demonstration programs adopting a capitated financial model.  Twenty-six states have submitted proposals to CMS to operate dual-eligible demonstration programs under the Financial Alignment Demonstration.  The capitated model is one of two possible program models under the Financial Alignment Demonstration; the other model type is a managed fee for service model.  Thus far, CMS has entered into a Memorandum of Understanding with Massachusetts and with Washington following approval of their proposals.  Massachusetts has the only approved capitated financial model thus far.

Under the capitated financial model, CMS and the state will contract with MMPs to manage and provide care to dual-eligibles enrolled in the demonstration program for a capitated per member per month fee.  CMS’s memorandum describes generally the “multi-pronged oversight strategy for MMPs.”  CMS explains that it will require plans to meet the core Medicare, Medicaid, state procurement and insurance requirements.  CMS and the state will conduct readiness reviews of selected MMPs prior to the start of each capitated financial model demonstration in order to assess the MMP’s “operational capacity and ability to offer high-quality, coordinated care while adhering to all federal and State requirements.”  All readiness reviews will include a network validation review and a desk review, but some MMPs will be selected for an additional site visit.  CMS also plans to conduct implementation monitoring prior to the first enrollment and during the implementation process as well as ongoing monitoring throughout the demonstration program.

According to CMS, each state-specific readiness review tool will be completed once the state and CMS have signed a Memorandum of Understanding.  CMS enclosed Massachusetts’ Readiness Review Plan (“the Massachusetts Plan”) with the November 28 memorandum.  According to CMS, the Massachusetts Plan is tailored to the state-approved demonstration’s requirements on MMPs and target population.  Nonetheless, the Massachusetts Plan addresses all of the key areas that CMS maintains will be included all state readiness review tools.  Therefore, health plans seeking to participate in capitated demonstration programs in other states can use the Massachusetts Plan to understand CMS’s expectations.  Review focuses on key areas impacting beneficiary access to services, including assessment processes, care coordination, provider network, staffing, enrollee protections and systems (such as claims, enrollment, payment, etc.).

Click here to view a copy of CMS’s memorandum and the Massachusetts Readiness Review Plan.