Dual Eligible Financial Alignment Demonstration: DMAS Issues RFP to MCOs

The Department of Medical Assistance Services (DMAS or the Department) formally issued a Request for Proposals (RFP) on April 10th from managed care plans (plans or MCOs) to enter into risk-based contracts for the capitated model under the Medicare-Medicaid Financial Alignment Demonstration (the Demonstration).

The Demonstration requires compliance with Title XIX of the Social Security Act and Medicaid regulations, Medicare Advantage regulations, and Part D of Title XVIII and Medicare Part D regulations except to the extent that waivers and variances are approved.  Under the Demonstration, States, CMS, and participating plans will enter into three-way contracts through which the plans will receive a blended capitated rate for the full continuum of Medicare and Medicaid benefits provided to dual eligible individuals.  The Demonstration is slated to the last three years, unless terminated earlier as provided for in provisions within of the Social Security Act, the Memorandum of Understanding, and the three-way contract.  

Subject to a number of pending approvals, including the much anticipated Memorandum of Understanding, participating plans shall deliver all covered services through a person-centered, integrated delivery system to individuals age 21 and over who are enrolled in Medicare Parts A, B, and D, and full-benefit Medicaid, including dual eligible individuals enrolled in the Elderly or Disabled with Consumer Direction (EDCD) Waiver and those residing in nursing facilities.  The participating plans shall cover at a minimum, all services currently covered by Medicare, Medicaid wrap-around services, nursing facility services, home and community-based long term services and supports provided under the Medicaid EDCD Waiver, and Medicaid-covered behavioral health services.

In addition to submitting a proposal though this RFP process, plans must also respond to and meet CMS requirements for participation in the Demonstration. CMS’ Demonstration requirements and qualifications are outlined in CMS guidance documents posted on the CMS website.  To participate as a Demonstration MCO in Virginia, plans must meet all CMS Demonstration requirements and be selected through the DMAS RFP process. 

Pending CMS approval, DMAS and CMS will implement the Medicare-Medicaid Financial Alignment Demonstration in Central Virginia, Northern Virginia, Roanoke, Tidewater and Western/Charlottesville regions.  Implementation will be phased-in beginning in early 2014. Prospective plans may submit proposals for one or more Demonstration region(s). Prospective plans must cover all eligible individuals in all localities within the region(s) in which they intend to participate.  Plans will be selected through both the DMAS and CMS plan selection processes. The Department anticipates that it will enter into three-way contracts with CMS and a minimum of two plans in each region. Selected plans are not required to participate with the Virginia Medicaid Medallion II or FAMIS programs in order to be eligible to contract under the Demonstration. Proposals are due to the Department no later than 10:00 a.m. on May 15, 2013.

DMAS will provide a data book containing fee-for-service expenditures for the eligible population, including data from calendar years 2009 and 2010.  This data book will include Medicaid data and may include Medicare data.  The data book is on track for distribution to interested plans in mid-April.  Plans must check the DMAS website for any addenda, notices, or data.  DMAS will hold sessions on June 10 and 11 for proposal presentations on the care scenario vignettes included in the RFP.

With respect to nursing facility operations and payment specifically, the RFP contains a series of questions that MCOs are required to respond to within their proposals.  DMAS shall require contractual agreements between nursing facilities and plans.  Payment for services shall be made to facilities directly by participating plans.  Participating plans shall contract with any facility that is eligible to participate in Medicare and Medicaid and is willing to accept the plan’s payment rates and contract requirements. The questions are located in section 3.7.5 of the RFP:

  1. Please describe the credentialing process that the Plan will use with nursing facilities.
  2. Under the Demonstration, skilled nursing level care may be provided in a long term care facility without a preceding acute care inpatient stay for individuals enrolled in the Demonstration, when the provision of this level of care can avert the need for an inpatient stay. Attest that the plan will meet this requirement during the Demonstration.
  3. What specific criteria and metrics, if any, will be used by the plan to evaluate nursing facility quality? How will these quality outcomes impact payment, patient placement, referral, and case management?
  4. When it is determined that a nursing facility is not able to safely meet the needs of an enrollee (e.g., due to dangerous behaviors) or because the enrollee no longer meets the nursing facility level of care requirement, will payment to the facility continue until a safe, alternate placement is secured? What specific resources and assistance for alternate placement will be provided by the plan?
  5. Plans will be required to pay no less than the Medicaid rate for Medicaid covered days. DMAS will publish Medicaid rates by nursing home based on current effective rates or the most recent effective rates inflated to the contract period. During the demonstration, DMAS expects to modify the nursing facility reimbursement methodology so that facility rates will be adjusted by acuity using Resource Utilization Groups (RUGs). Plans must be able to accommodate the new payment methodology, unless an alternate reimbursement methodology is agreed upon by contracted nursing facilities. Attest that the plan will meet these requirements during the Demonstration.
  6. Will claims be processed within the same payment timelines as current Medicaid and Medicare payments (e.g., DMAS currently sends remittances within 14 days).
  7. What will constitute a clean claim for nursing facility payment?