CMS & Virginia Announce Dual Demonstration MOU

On May 21st, the Centers for Medicare & Medicaid Services (CMS) and the Virginia Department of Medical Assistance Services (DMAS) announced that they will establish a Federal-State partnership to implement the Commonwealth Coordinated Care program (also referred to as the Dual Demonstration) to better serve individuals eligible for both Medicare and Medicaid (dual eligibles).  The Federal-State partnership will include a three-way contract with managed care organizations (MCOs) that will provide integrated benefits to Medicare-Medicaid Enrollees in the targeted geographic area(s).  The Demonstration will begin on February 1, 2014 and will continue until December 31, 2017, unless terminated earlier in accordance with provisions of the executed Memorandum of Understanding (MOU).  The demonstration is intended to test a payment and service delivery model to lessen the fragmentation and improve coordination of services for Medicare-Medicaid Enrollees, enhance quality of care, and reduce costs for both the Commonwealth and the federal government.

As previously communicated with VHCA/VCAL membership, the Demonstration will operate in five specific geographic regions within the Commonwealth – Northern Virginia, Central Virginia (including Richmond), Tidewater, Western/Charlottesville and Roanoke.  In those regions, the population that will be eligible to participate in the Demonstration will be limited to individuals ages 21 years and older at the time of enrollment who are entitled to benefits under Medicare Part A, enrolled under Medicare Parts B and D, receive full Medicaid benefits including individuals enrolled in the Elderly or Disabled with Consumer Direction (EDCD) Waiver and those residing in nursing facilities.

Under this initiative, participating health plans will be required to provide for, either directly or through subcontracts, Medicare and Medicaid-covered services, as well as additional items and services, under a capitated model of financing.  CMS, DMAS, and the MCO will ensure that beneficiaries have access to an adequate network of medical and supportive services. CMS and DMAS will jointly select and monitor the MCOs.  

The Demonstration will evaluate the effect of an integrated care and payment model on serving both community and institutional populations.  In order to accomplish these objectives, comprehensive contract requirements will specify access, quality, network, financial solvency, and oversight standards. Contract management will focus on performance measurement and continuous quality improvement. Except for specific exclusions identified in the MOU, participating MCOs will be required to comply with all applicable existing Medicare and Medicaid laws, rules, and regulations as well as program specific and evaluation requirements, as will be further specified in a three-way contract to be executed among the health plans, DMAS and CMS.

The MOU outlines the activities CMS and DMAS plan to conduct in preparation for implementation of the Demonstration, before the parties execute a three-way contract with participating MCOs setting forth the terms and conditions of the Demonstration and initiate the Demonstration.  Additional details about MCO responsibilities will be included in and appended to the three-way contract.

Last week, health plans that are interested in participating in the Demonstration submitted their proposals to DMAS.  Later this month, DMAS intends to release “data books” to MCOs that will provide demographic and claims experience data related to the Medicaid services provided to targeted dual beneficiaries for recent periods.  According to materials provided by DMAS, the Department intends to announce in June the MCOs that will participate in the Demonstration.  In July, DMAS and CMS intend to begin MCO readiness reviews and draft the three-way (CMS/DMAS/MCO) contract.  During August and September, DMAS and CMS plan to finalize Medicaid capitated rates to MCOs and finalize and execute the three-way contracts.

While practical operating and payment details about the Dual Demonstration remain scarce, key planning considerations for nursing facilities located within one of the five Demonstration regions include the following:

  • Any willing nursing facility provider may participate in the Demonstration as long as they are willing to accept the payment rates offered by the MCO.
  • MCOs must pay nursing facilities for Medicaid-related services no less than equivalent fee-for-service rates in effect.
  • The MOU officially removes the requirement for a qualifying three-day acute hospital stay in order for a beneficiary to qualify for skilled services coverage in a nursing facility.

VHCA’s Managed Care Committee will continue to closely monitor developments as DMAS and CMS work toward implementation of the Demonstration.  As we review the MOU in detail, we will continue to pass along information to our members.  Members with questions are encouraged to contact the Association.