Report on Early Implementation of Demonstrations Under the Financial Alignment Initiative

Walsh E
Publication Year: 2015
Patient Need Addressed: Care Coordination/Management
Population Focus: Dual eligible
Intervention Type: Service redesign
Study Design: Other Study Design
Type of Literature: Grey

This report provides a preliminary update on the status of selected evaluation and implementation activities for the seven demonstrations implemented as of May 1, 2014, as part of the Centers for Medicare & Medicaid Services (CMS) Financial Alignment Initiative to test integrated care and financing models for Medicare-Medicaid enrollees. Implementing these demonstrations is complex and challenging, requiring integration of multiple systems and sometimes conflicting Medicare and Medicaid policies, as well as major investments of time and resources by the States, Medicare-Medicaid Plans (MMPs), and CMS. This report describes the range of activities and early experiences in implementing these demonstrations during the first 6 months of operations in each demonstration State, and includes information about specific successes and challenges encountered in aligning Medicare and Medicaid systems and policies.

Insights Results


  • A challenge included integrating delivery of services arose in capitated model demonstrations because many providers, including nursing facilities, had little experience with managed care. In some States, these entities were reluctant to partner with Managed-Medicaid Plans (MMPs), citing prior authorization and billing procedures as stumbling blocks. Nursing facility representatives in particular reported wanting more direct engagement with State officials and MMPs regarding concerns with payment rates, reimbursement for Medicare bad debt payments, and the impact of MMPs’ prior authorization requirements on their authority to treat and bill for services provided to resident enrollees
  • Interviewees in capitated model demonstration States noted the importance of the role of the joint CMS-State Contract Management Team (CMT) in addressing ongoing issues related to the integration of Medicare and Medicaid policies and processes
  • According to State officials, addressing the nuts and bolts of aligning the Medicare and Medicaid program policies, procedures, and systems has been more time consuming than they expected. Some States reported that they did not anticipate the extensive financial investments they would be required to make prior to implementation to modify their management information systems to conform to those of CMS
  • Multiple strategies need to be employed by States and MMPs to locate beneficiaries
    for enrollment in the demonstrations. Finding eligible beneficiaries was a challenge voiced by key informants interviewed by the evaluation team. State systems often had incorrect or outdated contact information, making it difficult or impossible to get required passive enrollment notices to beneficiaries
  • State officials and stakeholders reported that the roles and responsibilities of the care coordinator were at times overlapping and confused with the roles and responsibilities of other case managers in the system; although in Washington, the health home coordinators were viewed as complementing the role of the case manager embedded in the specific delivery system, who was unable to comprehensively address the full range of an individual’s needs