State Medicaid Managed Long-Term Services and Supports Programs: Considerations for Contracting with Medicare Advantage Dual Eligible Special Needs Plans

Made possible through support from the Robert Wood Johnson Foundation.

TECHNICAL ASSISTANCE BRIEF | NOVEMBER 2016

State Medicaid Managed Long-Term Services and

Supports Programs: Considerations for Contracting with

Medicare Advantage Dual Eligible Special Needs Plans

By Stephanie Gibbs and Alexandra Kruse, Center for Health Care Strategies

IN BRIEF

Many states are transforming the delivery system for Medicaid long-term services and supports (LTSS) from fee-for-

service to managed care as a way to provide high-quality, person-centered, and cost-effective care to eligible beneficiaries

in the settings of their choice. A subset of states are also seeking to better integrate care for their beneficiaries who are

dually eligible for Medicare and Medicaid by contracting with Medicare Advantage Dual Eligible Special Needs Plans (D-

SNPs). This technical assistance brief, developed with support from the Robert Wood Johnson Foundation, highlights

opportunities for states to invest in Medicaid managed long-term services and supports (MLTSS) programs and align them

with D-SNPs. The brief, originally developed to guide New Jersey’s Medicaid program, explores considerations for

requiring D-SNPs to become Fully Integrated Dual Eligible Special Needs Plans (FIDE SNPs) and examines the potential

alignment that can be achieved through D-SNP contracting. It details key features of MLTSS, D-SNP, and FIDE-SNP

programs to offer insights for states contemplating integrated programs.

o support a growing number of aging adults and individuals with disabilities, many states are

transforming the delivery system for Medicaid long-term services and supports (LTSS) from fee-for-

service to managed care as a way to provide high-quality, person-centered, and cost-effective care

to eligible beneficiaries in the settings of their choice. As of October 2016, 21 states had a Medicaid

managed long-term services and supports (MLTSS) program or were planning to launch a program—up

from just eight states in 2008.

1,2

MLTSS programs, which are designed to serve individuals with both age

and disability-related long-term care needs, also serve a high-proportion of dually eligible individuals

whose primary and acute care services are provided through Medicare. States are exploring options to

better integrate and coordinate the care for their dually eligible populations, including contracting with

Dual Eligible Special Needs Plans (D-SNPs), a special type of Medicare Advantage Plan that enrolls only

dually eligible beneficiaries. As of October 2016, nearly 1.9 million individuals are enrolled in these plans in

38 states, the District of Columbia, and Puerto Rico.

This technical assistance brief, developed with support from the Robert Wood Johnson Foundation,

highlights opportunities for states with MLTSS programs to align the delivery of LTSS services to dually

eligible beneficiaries receiving their medical care through a D-SNP-based platform. The information in this

brief was originally gathered to guide New Jersey Medicaid officials in program decision making. Other

states can use this brief to help make the case for investing in D-SNP program development to reduce

fragmentation and align incentives across the Medicare and Medicaid programs.

The Case for Integrated Care

The goals of MLTSS programs include rebalancing the setting of care from institutions to community

settings and reducing fragmentation between Medicaid acute and primary care, behavioral health

services, and LTSS. States face additional barriers to achieving these goals for dually eligible beneficiaries

enrolled in MLTSS programs because those individuals must often continue to navigate the Medicare

system for primary, acute, and post-acute care services. More integrated care should reduce

fragmentation, and improve quality and access to care. Programs in which a single entity is responsible for

BRIEF | State Medicaid Managed Long-Term Services and Supports Programs: Considerations for Contracting with Medicare Advantage Dual

Eligible Special Needs Plans

Advancing innovations in health care delivery for low-income Americans | www.chcs.org 2

managing acute, post-acute, and long-term care services may also reduce cost shifting and align incentives

for Medicare and MLTSS providers to offer alternative home- and community-based services (HCBS)

options to institutional care.

Several integrated care models are available.

Twelve states are currently pursing integrated care for their

dually eligible beneficiaries through the federal Medicare-Medicaid Financial Alignment Initiative

demonstrations;

however, the initiative is now closed to new demonstrations. Thirty-two states have

provider-driven Program for All-Inclusive Care for the Elderly (PACE) organizations, which provide highly

integrated care for dually eligible beneficiaries, but PACE enrollment totals about 36,000

nationally. In

contrast, MLTSS programs aligned with D-SNPs provide a readily available option to align incentives and

improve care for more than a million enrollees.

Benefits of D-SNP-Based Integration Models

D-SNPs are required to have contracts with state Medicaid agencies that specify, at a minimum, how they

coordinate and arrange for the provision of Medicare and Medicaid benefits for enrollees.

Beyond this

threshold, states may pursue varying levels of Medicare and Medicaid integration, depending on their

goals. The value added by state D-SNP contracting depends on the level of Medicaid benefit integration

and care coordination requirements, the relationship between D-SNPs and Medicaid managed care plans,

and efforts to encourage aligned enrollment between state Medicaid agencies and D-SNPs. Following is an

overview of programs with increasing levels of Medicare-Medicaid alignment and integration:

Stand-Alone MLTSS Program

While MLTSS programs include incentives for rebalancing from institutional to community settings and

improving access to HCBS, they do not provide incentives to MLTSS plans to influence Medicare services

and cost drivers. Similarly, Medicare providers have no incentive to better manage chronic conditions to

avoid nursing facility placements. In addition, MLTSS plans usually do not have access to real-time

information on Medicare service utilization including hospitalizations and emergency department use that

could help them better coordinate care and ease transitions between settings.

MLTSS Program and State Contracts with D-SNPs

D-SNPs may provide the opportunity to more fully integrate care and support state efforts to align

incentives to provide the right care in the right setting for dually eligible enrollees, particularly when

Medicare and Medicaid services are managed by the same entity. States can use their contracting

authority with D-SNPs to establish a wide array of administrative, care coordination, and reporting and

notification requirements for D-SNPs. The exhibit on page 4 details key program features and contractual

considerations to achieve integration goals.

MLTSS Program and Contracts with Aligned D-SNPs

States can establish requirements to align their Medicaid acute care plans, Medicaid MLTSS plans, and D-

SNP contractors, and develop strategies that promote enrollment into aligned plans. This results in one

health plan having incentives for coordinating both Medicare and Medicaid service delivery. For example,

states can require that Medicaid acute care/MLTSS plans operate a companion D-SNP product to promote

enrollment in a D-SNP and Medicaid plan from the same insurer. States can make arrangements to

encourage individuals to enroll in the same health plan for both Medicaid and Medicare service delivery.

Fully Integrated Dual Eligible Special Needs Plans (FIDE SNPs)

FIDE SNPs are a type of D-SNP authorized by the Affordable Care Act in 2010. When compared to

traditional D-SNPs, FIDE SNPs provide states with additional authority and flexibility to achieve a higher

degree of integration of administrative alignment and integration of Medicare and Medicaid services.

FIDE-SNPs offer the highest level of benefit and administrative integration; they must be at risk for delivery

of Medicaid LTSS in addition to Medicare benefits, and they must have procedures in place to promote

BRIEF | State Medicaid Managed Long-Term Services and Supports Programs: Considerations for Contracting with Medicare Advantage Dual

Eligible Special Needs Plans

Advancing innovations in health care delivery for low-income Americans | www.chcs.org 3

administrative alignment. Additionally, the FIDE SNP designation can provide a modest payment

adjustment when enrollment matches the frailty level of PACE

enrollees. Lastly, FIDE-SNPs may also use

additional Medicare benefit flexibility to provide supplemental benefits not otherwise covered by

Medicare or Medicaid.

The table on page 4 includes additional details on the key operational features in MLTSS, D-SNP, and FIDE-

SNP programs and state considerations for implementing each model.

New Jersey’s Integration Efforts

New Jersey is an example of a state that leveraged its MLTSS program to develop a D-SNP-based

integration platform that better aligns and coordinates care for Medicare-Medicaid enrollees. The

state began contracting with D-SNPs in 2012 to provide a more coordinated system of care for dually

eligible beneficiaries who enroll in the same health plan for both Medicare and Medicaid service

delivery. In July 2014, New Jersey launched an MLTSS program that provided an expanded platform for

integrating care for the large proportion of the state’s more than 200,000 dually eligible beneficiaries in

need of Medicaid-covered LTSS. After assessing the comparative value of developing a fully integrated and aligned D-SNP

based program along with the state’s investment in MLTSS, New Jersey transitioned the responsibility for providing both

nursing facility and community-based LTSS services to its aligned Medicaid/D-SNP contractors for individuals that elect to

join a D-SNP. As of September 2016, three of New Jersey’s current Medicaid/D-SNP contractors have obtained FIDE-SNP

status and achieved a high degree of benefit integration and administrative alignment for the over 16,000

dually eligible

beneficiaries enrolled in the plans.

Conclusion

As states weigh options to serve vulnerable and high-need dually eligible populations, MLTSS programs

offer a starting place for the integration of Medicare and Medicaid services. By leveraging MLTSS

programs, states such as New Jersey are using D- -based models as vehicles for aligning Medicare services

and further coordinating benefits for dually eligible individuals. Through D-SNPs, states may be better

positioned to align incentives for providers and streamline program features for beneficiaries. States have

several options to use D-SNP models to increase integration, and may choose among several features to

determine the configuration that will best meet their integration goals. If current trends continue, many

more of the nation’s dually eligible beneficiaries will be enrolled in integrated programs involving state

MLTSS programs and their contracting D-SNPs.

BRIEF | State Medicaid Managed Long-Term Services and Supports Programs: Considerations for Contracting with Medicare Advantage Dual

Eligible Special Needs Plans

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Exhibit: Key Features of MLTSS, D-SNP, and FIDE-SNP Programs

Feature MLTSS D-SNP FIDE-SNP

Level of

Medicare and

Medicaid

Benefit

Integration



Medicaid LTSS only

 Limited ability for stand-alone

MLTSS plans to coordinate and

influence provision of Medicare

benefits



Must integrate Medicare primary and

acute care services

 May include Medicaid benefits such as

LTSS and behavioral health services at

the state’s discretion

 May offer supplemental benefits



Must integrate Medicare primary and acute

care services

 Must include Medicaid benefits with LTSS

 May include Medicaid behavioral health

 May include supplemental benefits, with more

flexibility than D-SNP

Enrollment



Mandatory or voluntary Medicaid

enrollment design

 Two enrollment forms to sign

 Misaligned enrollments between

Medicare and Medicaid plans

 State cannot influence Medicare

enrollment



May use one integrated enrollment form

when the same health plan offers a

D-SNP and an MLTSS product

 May leverage Medicaid mandatory

enrollment process to assign to

companion D-SNPs



Must use one integrated enrollment form and

process

 May provide way for same accretion and

deletion dates for all services

 May provide opportunity to leverage Medicaid

enrollment process to assign to companion

FIDE-SNPs

Care

Coordination

 Require that all members receive

some level of care coordination

 Limited ability to coordinate across

Medicare and Medicaid services

 No MLTSS plan access to real-time

Medicare health plan data

 Must establish a Model of Care (MOC) to

address unique needs of dually eligible

enrollees

 Must use multi-disciplinary approach

 State may add Medicaid care

management requirements

 Must establish an integrated MOC focused on

provision of both Medicare and Medicaid

benefits

 Must use multi-disciplinary approach

 State must add Medicaid care management

requirements

Assessments

 States require in-person,

comprehensive assessment focused

on Medicaid LTSS needs including

social supports

 May (generally has) separate assessment

process for Medicare and Medicaid

 Must complete health risk assessment

(HRA) for all D-SNP enrollees

 Must have coordinated Medicare and

Medicaid assessment processes

 May use integrated assessment process

 Must complete HRA for all FIDE-SNP enrollees

Quality

Improvement

 Quality requirements only focused

on Medicaid LTSS benefits delivery

 Required Performance

Improvement Projects (PIPs)

 May or may not include public

reporting of LTSS process or

outcomes measures

 May integrate comprehensive Medicare

quality improvement and public

reporting requirements with Medicaid

requirements

 May integrate separate Medicaid PIPs

and Medicare Quality Improvement

Projects (QIPs)

 May integrate Medicare and Medicaid quality

improvement activities, with a strong incentive

to do so

 States may align PIP and QIP topics and/or

accept Medicare QIPs

 Some states are considering Medicare quality

information in state reporting

Utilization

Data for

Program

Analysis/ Care

Coordination



MLTSS plans have access to data on

Medicaid LTSS service use and

needs only

 States can obtain periodic Medicare

FFS data for duals to share with

plans, but data is not real-time



D-SNPs must report Medicare encounter

data to CMS that states may receive and

use for program analysis and rate setting

 May use Medicare service utilization data

for real-time care coordination in aligned

D-SNP/Medicaid plans



Same features as D-SNP with greater incentives

to use Medicare data for real-time care

coordination

Financial

Model and

Incentives



Stand-alone MLTSS plan receives

payment for Medicaid benefits

only; does not receive integrated

Medicaid and Medicare payments

 Rate setting methodology includes

incentives for rebalancing from

institutional to community settings

 No focus on managing Medicare

service use or impact to Medicaid

costs and services



May integrate separate Medicare and

Medicaid payments by plan

 Incentives may exist for D-SNP/Medicaid

plan to use least costly services in least

restrictive settings

 Savings from reduced Medicare service

use accrue to plan and Medicare; no

mechanism for states to share in savings

 Subject to Star ratings; potential bonus

payments



Must integrate separate Medicare and

Medicaid payments by plan

 Incentives may exist via MLTSS program design

to use least costly services in least restrictive

settings

 Plans may be eligible for frailty adjustment

 Savings from reduced Medicare service use

accrue to plan and Medicare; no mechanism

for states to share in savings

 Subject to Star ratings; potential bonus

payments

Administrative

Processes



Separate Medicaid and Medicare

administrative processes



May have integrated administrative

processes when D-SNP/Medicaid plans

are aligned



Must have integrated administrative processes

BRIEF | State Medicaid Managed Long-Term Services and Supports Programs: Considerations for Contracting with Medicare Advantage Dual

Eligible Special Needs Plans

Advancing innovations in health care delivery for low-income Americans | www.chcs.org 5

ABOUT THE CENTER FOR HEALTH CARE STRATEGIES

The Center for Health Care Strategies (CHCS) is a nonprofit policy center dedicated to improving the health of

low-income Americans. It works with state and federal agencies, health plans, providers, and consumer groups to develop

innovative programs that better serve people with complex and high-cost health care needs. For more information,

visit www.chcs.org.

States operating or developing comprehensive MLTSS programs: AZ, CA, DE, FL, HI, IL, KS, MA, MI, MN, NJ, NM, NY, OH, PA, RI, SC, TN, TX, VA, WI.

P. Saucier, J. Kasten, B. Burwell, and L. Gold. “The Growth of Managed Long-Term Services and Supports (MLTSS) Programs: A 2012 Update.” Truven Health

Analytics, July 2012. Available at: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-

systems/downloads/mltssp_white_paper_combined.pdf.

J. Verdier, A. Kruse, R. Lester, A. Philip, and D. Chelminsky. “State Contracting with Medicare Advantage Dual Eligible Special Needs Plans: Issues and Options.”

Integrated Care Resource Center. (forthcoming).

N. Archibald and A. Kruse. “Snapshot of Integrated Care Models to Serve Dually Eligible Beneficiaries.” Center for Health Care Strategies, December 2015.

Available at: http://www.chcs.org/media/INSIDE-Snapshot-of-Integrated-Care-12-14-15-FINAL.pdf.

States taking part in the Financial Alignment Initiative: CA, CO, IL, MA, MI, MN, NY, OH, RI, SC, TX, VA and WA. For more information see:

https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-

Office/FinancialAlignmentInitiative/FinancialModelstoSupportStatesEffortsinCareCoordination.html.

Integrated Care Resource Center. “Programs of All Inclusive Care for the Elderly (PACE) Enrollment by State and Organization.” October 2016. Available at:

http://www.integratedcareresourcecenter.com/PDFs/PACE_Enroll_by_State_Oct_2016.pdf.

Verdier et al., op. cit.

Centers for Medicare & Medicaid Services. “Medicare Managed Care Manual.” Chapter 16b (Rev.123, Issued 8-19-16). Available at:

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c16b.pdf.

Section 1853(a)(1)(B)(iv) of the Affordable Care Act (ACA) provides the authority to apply a frailty adjustment payment under the rules for Program of All-

Inclusive Care for the Elderly (PACE) payment, for certain FIDE SNPs, to reflect the costs of treating high concentrations of frail individuals. Frailty scores are

calculated using the limitation on activities of daily living (ADL) reported by a plan’s enrollees, based on the Medicare Health Outcomes Survey (HOS) from the

year previous to the payment year. For a SNP to be eligible to receive frailty payments pursuant to section 1853 of the Act, the SNP must: (1) satisfy the FIDE SNP

definition under 42 CFR 422.2(3); (2) participate in the HOS; and (3) have similar average levels of frailty as PACE organizations as described in the Advance Notice

for the given year. Centers for Medicare & Medicaid Services. “Medicare Managed Care Manual.” Chapter 16b (Rev.123, Issued 8-19-16). Available at:

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c16b.pdf.

Centers for Medicare & Medicaid Services. SNP Comprehensive Report. September 2016. Available at: https://www.cms.gov/Research-Statistics-Data-and-

Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data-Items/SNP-Comprehensive-Report-2016-09.html.

For Medicare, dually eligible beneficiaries may choose to enroll in D-SNPs, other Medicare Advantage plans, or Medicare fee-

for-service (FFS), and states cannot limit month to month changes between Medicare Advantage plans or Medicare FFS.

ENDNOTES