DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
Center for Medicaid, CHIP and Survey & Certification 
Medicare-Medicaid Coordination Office 
 
              SMDL#  11-008 
              ACA#  18 
July 8, 2011 
 
Re:  Financial Models to Support State 
Efforts to Integrate Care for Medicare-
Medicaid Enrollees 
 
Dear State Medicaid Director: 
 
This letter provides preliminary guidance on opportunities to align financing between 
Medicare and Medicaid to support improvements in the quality and cost of care for 
individuals enrolled in both programs (also referred to as Medicare-Medicaid enrollees 
or dual eligibles).  Specifically, the Centers for Medicare & Medicaid Services (CMS) 
is outlining two models for States pursuing integration of primary, acute, behavioral 
health and long term services and supports for their full benefit Medicare-Medicaid 
enrollees.    
  
Section 2602 of the Patient Protection and Affordable Care Act (Pub. L. 111-148), 
enacted on March 23, 2010, as revised by the Health Care and Education Reconciliation 
Act of 2010 (Pub. L. 111-152), together known as the Affordable Care Act, created the 
Federal Coordinated Health Care Office (Medicare-Medicaid Coordination Office).  
The Medicare-Medicaid Coordination Office is charged with making the two programs 
work together more effectively to improve care and lower costs.  Specifically, pursuant to 
section 2602(c) of the Affordable Care Act, the Office is focused on improving quality 
and access to care for Medicare-Medicaid enrollees; simplifying processes; and 
eliminating regulatory conflicts and cost-shifting that occurs between the Medicare and 
Medicaid programs, States, and the Federal government. 
 
In partnership with States, CMS is improving the quality of care Medicare-Medicaid 
enrollees receive by expanding access to seamless, integrated programs.  The first 
initiative in this area, the State Demonstrations to Integrate Care for Dual Eligible 
Individuals, was launched in April 20111 through the Center for Medicare and Medicaid 
Innovation (Innovation Center).  CMS is working with fifteen States, competitively 
selected based on their advanced readiness, to design person-centered approaches to 
better coordinate care for Medicare-Medicaid enrollees.  The overall goal of this initiative  
 
 
                                                           
1 CMS has subsequently launched two additional initiatives to support States efforts to improve the quality 
and costs of care for Medicare-Medicaid enrollees: the availability of Medicare Parts A, B, and D data to 
States for care coordination purposes and the Alignment Initiative.  For more information on all of these 
initiatives, please see http://www.cms.gov/medicare-medicaid-coordination. 
         Page 2 - State Medicaid Director 
is to develop, test and validate fully integrated delivery system and care coordination 
models that can be replicated in other States.  Early work with these States confirms that 
a key component of such initiatives will be testing new payment and financing models to 
promote better care and align the incentives for improving care and lowering costs 
between Medicare and Medicaid.   
This letter provides guidance on two financial alignment models that CMS seeks to test 
with States.  Through the Innovation Center, CMS is interested in testing these models 
across the country in programs that collectively serve up to 1-2 million Medicare-
Medicaid enrollees.  The models are open to the fifteen States participating in the above 
mentioned State Demonstrations to Integrate Care for Dual Eligible Individuals as well as 
any other State that demonstrates it can meet the established standards and conditions and 
would be ready to implement its proposed demonstration by the end of 2012.  Under 
these models, CMS will work with interested States to combine Medicare and Medicaid 
authorities to test a new payment and service delivery model to reduce program 
expenditures under Medicare and Medicaid while preserving or enhancing the quality of 
care furnished to Medicare-Medicaid enrollees in this capitated program.  
Demonstrations under this program would be limited to no more than three years.  All 
demonstrations will include a rigorous evaluation, the results of which will help inform 
the potential for future program changes.  
CMS is offering streamlined approaches for States interested in testing these two models 
and technical assistance to support necessary planning activities.   
The first model is a capitated approach to integration for Medicare-Medicaid enrollees; 
the second is a managed fee-for-service (FFS) approach to integration.  Under the 
capitated model, CMS, the State, and health plans2 would enter into a three-way contract; 
the participating plans would receive a prospective blended payment to provide 
comprehensive seamless, coverage.  This model will target aggregate savings through 
actuarially developed blended rates that will provide a new savings opportunity for both 
States and the Federal government.  Under the managed FFS model, CMS and a State 
will enter into agreement whereby the State would be eligible to benefit from savings 
resulting from initiatives that improve quality and reduce costs for both Medicaid and 
Medicare. These models provide States with two new pathways to support integration for 
Medicare-Medicaid enrollees and provide opportunities to achieve savings as a result of 
improvements in care delivery.  States meeting the necessary criteria will have an option 
to pursue either or both of these financial alignment models.   
This letter provides initial information on aspects of these two models.  It is intended to 
provide sufficient detail to allow States to determine their interest in testing these models 
and to begin necessary planning activities.  Interested States should submit a Letter of 
Intent, as described below, to initiate the process. 
                                                           
2 Eligible health plans include entities currently offering Medicare Advantage or Medicaid managed care 
and could include other eligible entities assuming they can meet all applicable standards, as agreed upon in 
writing by CMS and the State. 
 
         Page 3 - State Medicaid Director 
 
While this guidance focuses on the new financial alignment model demonstration 
opportunities, The Medicare-Medicaid Coordination Office is available to provide 
technical assistance and access to a Resource Center for all States in support of efforts to 
improve the quality and cost effectiveness of care for Medicare-Medicaid enrollees. 
 
General Information 
 
Throughout this guidance, there will be references to an integrated program, which 
refers to one that encompasses all the medical, behavioral health, and long-term services 
and supports needed by an individual eligible for both Medicare and Medicaid.  CMS is 
pursuing integrated programs because a comprehensive approach will ensure that the 
individual has a seamless care experience and that one entity is accountable for the full 
continuum of care for the Medicare-Medicaid enrollee.   
 
Implementation of these models will rely on effective partnerships with States and 
success will largely be contingent upon engagement with and the capacity of health care 
and service providers that support and care for Medicare-Medicaid enrollees in their 
communities.  Medicare-Medicaid enrollees, their families and consumer organizations 
working with them also have a central role to play in helping to design a person-centered 
system of care.  Therefore, CMS encourages and expects active and meaningful State 
engagement with stakeholders in both models. 
 
Background 
 
There are over 9 million Medicare-Medicaid enrollees, more than two-thirds of whom 
receive full benefits from both programs.3  While Medicare-Medicaid enrollees comprise 
only 16 percent of Medicare and 15 percent of Medicaid enrollees, they account for 27 
percent and 39 percent of total Medicare and Medicaid spending respectively.4   The 
majority of these beneficiaries receive their care in uncoordinated systems, which may 
result in poor quality, or costly care.  A priority for CMS and the Department is to 
significantly increase the number of Medicare-Medicaid enrollees in seamless 
coordinated care systems that will improve beneficiary experiences and quality outcomes, 
while also achieving savings for both States and the Federal government. 
 
A longstanding barrier to integration for Medicare-Medicaid enrollees has been the 
financial misalignment between Medicare and Medicaid.  Reforms to improve quality 
and reduce costs require an investment in the delivery system and care management.  
Because delivery of services for Medicare-Medicaid enrollees is split between Medicare 
and Medicaid, States may lack incentives to invest in such initiatives.  As a result, these  
 
                                                           
3 Based on the Centers for Medicare &Medicaid Services (CMS) Enrollment Database, Provider 
Enrollment, Economic and Attributes Report, provided by CMS Office for Research, Development and 
Information, July 2010. 
 
4 The Medicare Payment Advisory Committee, A Data Book: Healthcare spending and the Medicare 
program, June 2010 and Kaiser Family Foundation, The Role of Medicare for the People Dually Eligible 
for Medicare and Medicaid.  January 2011. 
 
         Page 4 - State Medicaid Director 
 
beneficiaries, arguably those who could benefit the most from an investment in care 
coordination, are generally excluded from such State programs.   
 
To address this challenge, CMS is announcing two models that will provide opportunities 
to improve quality and the beneficiary experience while also reducing costs for both 
States and the Federal government.  They are part of a broader agenda for the Medicare-
Medicaid Coordination Office, CMS, and the Administration to improve the care, quality, 
cost, and, ultimately, health for this population. 
 
Capitated Model  
 
One approach to integration is to leverage the significant experience of States in utilizing 
capitated models to provide care for the Medicaid population.  Currently, the most 
integrated systems for Medicare-Medicaid enrollees are funded through capitated 
arrangements, which have supported efforts to create flexible, person-centered systems of 
care.  The Program of All Inclusive Care for the Elderly (PACE), Fully Integrated Dual 
Eligible Medicare Advantage Special Needs Plans, managed long-term care programs in 
Medicaid, and prior Medicare-Medicaid demonstrations provide important lessons.  The 
capitated model described in this guidance builds on those experiences and is designed to 
address some of the remaining programmatic and fiscal challenges in current contracting 
models, and to ensure incentives are aligned to encourage States and plans to participate.   
Under this model, CMS will test a new capitated payment model utilizing a three-way 
contract among a State, CMS and health plans to provide integrated benefits to Medicare-
Medicaid enrollees. 
 
Plans will receive a blended capitated rate for the full continuum of benefits provided to 
Medicare-Medicaid enrollees across both programs.  The capitated model will target 
aggregate savings through actuarially developed blended rates that will provide savings 
for both States and the Federal government.  Plans will be required to meet established 
quality thresholds. 
 
The three-way contract among CMS, the State, and health plans will also test 
administrative, benefit and enrollment flexibilities that will further the goal of providing a 
seamless experience for Medicare-Medicaid enrollees utilizing a simplified and unified 
set of rules.  Such flexibilities will vary by State and may include, but are not limited to: 
supplemental benefits; enrollment flexibilities; and a single set of appeals, auditing and 
marketing rules and procedures.  Any flexibility will be coupled with specific beneficiary 
protections that will be included in the contract among the parties.  
 
Plans will be selected through a competitive, joint procurement by States and CMS.  
CMS and the State will contract with selected high-performing health plans that 
demonstrate the capacity to provide to enrollees, directly or by subcontracting with other 
qualified entities, the continuum of Medicare and Medicaid covered services.  CMS and 
the State will ensure that beneficiaries have access to an adequate network of medical and 
supportive service providers.   
 
 
 
         Page 5 - State Medicaid Director 
 
Managed FFS Model  
 
Another approach to integration is to design programs built on the existing FFS delivery 
system.  Many States have invested significant resources to organize their delivery 
system to provide coordinated care for Medicaid beneficiaries through a FFS model.  In 
addition, new CMS programs focused on redesigning the primary care delivery system 
(e.g., Accountable Care Organizations, Medicaid health homes) offer opportunities for 
States to improve coordination of care within a managed FFS delivery model.  Under this 
model, CMS will test the impact of establishing a retrospective performance payment to 
States based on Medicare savings achieved for Medicare-Medicaid enrollees.  The State 
program will ensure seamless integration and access to all necessary services based on 
the individuals needs through coordination across the two programs.  States would make 
the upfront investment in care coordination and would be eligible for a retrospective 
performance payment should a target level of savings result to Medicare.  Savings 
determinations will be based on rigorous evaluation of Medicare and Medicaid spending 
in each State and must be certified by CMS Office of the Actuary (OACT). 
 
States will be eligible for retrospective performance payments based on Medicare savings 
net of increased Federal Medicaid costs.  Performance payments will only be made to 
States that meet or exceed established quality thresholds for the Medicare-Medicaid 
enrollees in the program. 
 
Streamlined Process 
 
States that are interested in pursuing these models are asked to submit a Letter of Intent to 
CMS to begin the planning process by October 1, 2011. 
 
After notifying CMS of its interest to participate, a State will have to demonstrate that it 
has met or exceeded certain CMS established standards and conditions to begin the 
formal process of entering into a Memorandum of Understanding (MOU) between the 
State and CMS. The standards and conditions, which will be provided through 
supplemental guidance for interested States, will ensure consistency across State 
initiatives, promote sound management, and ensure beneficiary protections.  They may 
differ slightly between the two models; however, each will include:  
 
  Public notice and meaningful consumer and other stakeholder engagement; 
  Enrollment targets and related outreach initiatives; 
  Integrated care management across primary, acute, behavioral health and long-
term services and supports; 
  OACT certifiable estimates of expected savings; 
  Integrated beneficiary level claims data to inform program management and 
evaluation; 
  Adequate access to networks of medical and supportive services providers; 
  Monitoring and oversight infrastructure; 
  Quality measurement infrastructure; and 
 
 
         Page 6 - State Medicaid Director 
 
  Target implementation date by end of 2012. 
 
CMS will work with interested States to determine whether they meet established 
standards and conditions. 
 
Upon meeting the standards and conditions, CMS and the State will enter into a 
Memorandum of Understanding (MOU) that will outline the parameters of the initiative.   
 
Enclosed for informational purposes with this letter are draft MOU templates that list, in 
broad categories, the terms and conditions of the demonstration, including: Statement of 
Initiative, Program Authority, Contracting Process, Readiness Review, Enrollment, 
Beneficiary Protections, Administration and Reporting, Quality Management, Financing 
and Payment, Evaluation, and Oversight Responsibilities.  The MOU templates are 
provided to illustrate roles and responsibilities that CMS and States will undertake as 
they plan for implementation of these models. CMS is continuing to review the 
templates, and modifications may be made prior to execution.  Additionally, final 
commitments will be established either: 1) in a three-way contract among CMS, the 
State, and a health plan under the capitated model; or 2) in a final agreement between 
CMS and the State under the managed FFS model.  The steps in the process for States are 
listed below.  Steps 4-6 apply only to the capitated model.   
 
1)      Letter of Intent; 
2)      Work with CMS to meet established standards and conditions; 
3)      Sign Memorandum of Understanding with CMS; 
4)      State procurement documents released; 
5)      CMS and the State select qualified plans; 
6)      CMS and the State conduct readiness reviews of each selected plan; 
7)      Three-way contracts signed (capitated model): Final agreement signed (FFS); 
          and 
8)      Implementation, monitoring, and evaluation. 
 
Quality Measurement and Evaluation 
 
All State programs will be evaluated as to their ability to improve quality and reduce 
costs.  To facilitate evaluation, CMS is requiring States to collect and report all necessary 
information for the overall evaluation.  Participating States will be required to collect and 
provide individual-level quality, cost, enrollment and utilization data for the purposes of 
comparing the effects of these models across sub-groups of Medicare-Medicaid enrollees, 
including those that participate in the integrated model being tested and those that do not.  
CMS will provide standardized methodologies for tracking key utilization, quality and 
cost measures.   
 
Additionally participating health plans in the capitated model will be required to provide 
encounter data in a common format that will facilitate evaluation and an improved 
understanding of the beneficiary experience in the plan.  Participating plans will also be  
 
 
 
         Page 7 - State Medicaid Director 
 
required to report on certain established quality indicators to allow an evaluation of the 
impact on quality of care for enrollees.  
 
States and relevant entities will be required to cooperate with CMS or its designated 
agent conducting the evaluation.  This evaluation, and the data gathered for it, will also 
provide States with information that can help inform continued improvement of a States 
integrated program.  CMS will provide subsequent guidance on the data requirements and 
evaluation design. 
 
Support for State Planning Activities  
 
The Medicare-Medicaid Coordination Office, working in collaboration with the 
Innovation Center, the Center for Medicaid, CHIP & Survey and Certification, and the 
Center for Medicare, is available to assist States interested in pursuing the two models 
outlined in this letter.  In addition, CMS is in the process of establishing a technical 
assistance (TA) Resource Center.  Interested States will be able to access the TA 
Resource Center to work through the process of developing a State initiative and meeting 
the necessary standards and conditions.  
 
Interested States should submit a Letter of Intent via email to Melanie Bella, Director, 
Medicare-Medicaid Coordination Office, at Melanie.Bella@cms.hhs.gov.   
 
The financial alignment models outlined in this letter are tools to be used as part of an 
array of integration initiatives to improve the access, quality and costs of care for 
Medicare-Medicaid enrollees.  As we move forward, we remain committed to ensuring 
that these individuals are able to receive the best care from both programs while 
maintaining our longstanding commitment to effectively manage Federal resources.   
 
We look forward to working with States, individually and collectively, as part of our 
ongoing partnership to develop and test initiatives that improve quality and reduce cost 
for high cost populations, particularly those eligible for both Medicare and Medicaid.  If 
you have questions about this demonstration initiative, please contact Tim Engelhardt, 
Director of the Models and Demonstrations Group in the Medicare-Medicaid 
Coordination Office at Tim.Engelhardt@cms.hhs.gov.  Questions or comments may also 
be submitted to the Medicare-Medicaid Coordination mailbox, at 
MedicareMedicaidCoordination@cms.hhs.gov. 
 
 
          Sincerely, 
           
          /s/ 
 
Cindy Mann  Melanie Bella 
Director, Center for Medicaid ,  Director, Medicare-Medicaid 
CHIP and Survey & Certification  Coordination Office 
 
Attachments 
         Page 8 - State Medicaid Director 
 
cc:  
CMS Regional Administrators 
 
CMS Associate Regional Administrators 
Division of Medicaid and Childrens Health 
 
Matt Salo 
President 
National Association of Medicaid Directors 
 
Alan R. Weil, J.D., M.P.P. 
Executive Director 
National Academy for State Health Policy 
 
Director of Health Legislation 
National Governors Association 
 
Christine Evans, M.P.H 
Director, Government Relations  
Association of State and Territorial Health Officials 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Debra Miller 
Director for Health Policy 
Council of State Governments 
 
Ron Smith 
Director 
Legislative Affairs 
American Public Human Services Association 
   
         ATTACHMENT: Draft Template MOU for Capitated Model 
 
 
 
 
Memorandum of Understanding (MOU) 
 
 
 
Between 
 
 
The Centers for Medicare & Medicaid Services (CMS) Innovation Center 
 
And 
 
[Name of State] 
 
 
Regarding A Federal-State Partnership to Test a Capitated Financial Alignment 
Model for Medicare-Medicaid Enrollees 
 
 
 
[Insert Name of Initiative] 
 
 
 
 
 
 
 
 
 
 
   
          
 
TABLE OF CONTENTS 
 
 
 
I.  Statement of Initiative             Page 1 
     
 
II.  Specific Purpose of This Memorandum of Understanding    Page 2 
     
 
III.  Program Design / Operational Plan          Page 2 
            
A.     Program Authority            Page 2 
B.     Contracting Process            Page X 
C.     Enrollment              Page X 
D.    Delivery Systems and Benefits        Page X       
E.     Beneficiary Protections, Participation and  
    Customer Service             Page X 
F.    Integrated Appeals           
G.       Administration and Reporting        Page X 
H.       Quality Management            Page X 
I.       Financing and Payment          Page X 
J.       Evaluation              Page X 
K.      Modification or Termination of Agreement      Page X 
L.      Signatures              Page X 
         
 
Appendices [To be provided through planning activities with the State] 
 
1.  Definitions                Page X 
2.   CMS Standards and Conditions Checklist and Supporting State 
Documentation              Page X 
3.  Details of State Initiative and Geographic Area      Page X 
4.  Medicaid Authorities and Variances          Page X 
5.  Medicare Authorities and Variances          Page X 
6.  Payments to Participating Plans          Page X 
7.  Operation Manual              Page X 
 
          
 
         I.   STATEMENT OF INITIATIVE 
 
To establish a Federal-State partnership between the Centers for Medicare & Medicaid 
Services (CMS) and the [Name of State] to implement the [Name of Initiative] to better 
serve individuals eligible for both Medicare and Medicaid (Medicare-Medicaid 
enrollees or dual eligibles). The Federal-State partnership will include a three-way 
contract with Participating Plans that will provide integrated benefits to Medicare-
Medicaid enrollees in the geographic area(s).  The initiative is intended to alleviate the 
fragmentation and improve coordination of services for Medicare-Medicaid enrollees, 
enhance quality of care and reduce costs for both the State and the Federal government.   
 
Individuals who are eligible for Medicare and full Medicaid benefits will be eligible for 
enrollment in this initiative.  State specific eligibility for the initiative is provided in 
Appendix 3. 
 
Under this initiative, Participating Plans will be required to provide, either directly or 
through subcontracts, all medically necessary Medicare and Medicaid-covered services 
under a capitated model of financing.  CMS, the State, and the Participating Plans will 
ensure that beneficiaries have access to an adequate network of medical and supportive 
services.  
 
CMS and the State shall jointly select and monitor the Participating Plans.  
Implementation of this initiative will require that CMS approve Participating Plan 
contracts under demonstration authority for Medicare and demonstration or State Plan 
authority for Medicaid as described in section 3A and detailed in Appendices 4 and 5.  
 
Key objectives of the initiative are to improve beneficiary experience in accessing care, 
improve quality, eliminate cost shifting between the two programs and achieve cost 
savings for States and CMS.  The initiative will test the effect of an integrated payment 
and care model on serving both community and institutional populations.  In order to 
accomplish these objectives, comprehensive contract requirements will specify access, 
quality, financial solvency and network standards.  Contract management will focus on 
performance measurement and continuous quality improvement.  Participating Plans will 
be required to comply with all applicable existing Medicare and Medicaid rules and 
regulations as well as program specific and evaluation requirements, as will be further 
specified in a contract to be implemented among the Participating Plans, State and CMS.   
 
As part of this initiative, CMS and the State will test new Medicare and Medicaid 
payment methodologies designed to support Participating Plans in serving the full range 
of Medicare-Medicaid enrollees. Such financing approaches will minimize cost-shifting 
and align incentives between Medicare and Medicaid, and support the best possible 
health outcomes for enrollees.  
 
CMS and the State will allow for certain flexibilities that will further the goal of 
providing a seamless experience for Medicare-Medicaid enrollees, utilizing a simplified 
and unified set of rules.  Such flexibilities may include, but are not limited to,  
   
 
1 
         supplemental benefits, enrollment flexibilities, and a single set of appeals, auditing and 
marketing rules and procedures.  Flexibilities will be coupled with specific beneficiary 
safeguards and will be included in the contract among the parties.  
 
Preceding the signing of this MOU, the State has undergone necessary planning activities 
consistent with the CMS checklist of standards and conditions for participation as 
detailed through supporting documentation provided in Appendix 2.  Demonstrations 
under this initiative would be no longer than three years. 
 
II.   SPECIFIC PURPOSE OF THIS MEMORANDUM OF UNDERSTANDING 
 
This document details the agreement between CMS and the State regarding the principles 
under which the initiative will be implemented and operated. (See Appendix 1 for 
definitions of terms used in this Memorandum of Understanding [MOU].)  It also outlines 
the activities which CMS and the State agree to conduct in preparation for planned 
implementation of the initiative.   
 
Following the signing of this MOU, CMS and the State will finalize a Participating Plans 
Procurement Document and will develop an operating manual, which will specify the 
administrative activities CMS and the State will conduct in support of the initiative. As 
agreed upon, the operation manual will be appended to the signed MOUs and Plan 
contracts and are subject to periodic updating.  CMS and the State will undergo a joint 
procurement for Participating Plans and will ultimately enter into a three-way contract 
with selected plans, as specified below. 
 
III.   PROGRAM DESIGN / OPERATIONAL PLAN    
 
A.  PROGRAM AUTHORITY 
 
1.  Medicaid Authority: The Medicaid elements of the initiative shall operate according 
to existing Medicaid law and regulation except to the extent that variances from these 
requirements are provided for in Appendix 5.  As a term and condition of the 
initiative, Participating Plans will be required to comply with Medicaid managed care 
requirements under 42 C.F.R. 438 et. seq., except to the extent that variances from 
these requirements are provided for in Appendix 4. 
 
2.  Medicare Authority: The Medicare portions of the initiative shall operate according 
to existing Medicare law and regulation, except to the extent that variances from these 
requirements are provided for in Appendix 5.   As a term and condition of the 
initiative, Participating Plans will be required to comply with Medicare Advantage 
requirements in Part C and Part D of Title XVIII, and 42 C.F.R. Part 422 and 423, 
except to the extent that variances from these requirements are provided for in 
Appendix 4.  
 
B.  CONTRACTING PROCESS 
 
2 
         1.  Participating Plan Procurement Document: CMS and the State shall issue a 
Procurement Document that will include one set of comprehensive purchasing 
specifications that reflect the integration of Medicare and Medicaid and which 
incorporates the model application as summarized in the MOU and appendices.  All 
applicable Medicare Advantage requirements and Medicaid managed care requirements 
shall be incorporated into the Procurement Document.  
2.   Participating Plan Selection: CMS and the State shall contract with qualified 
Participating Plans on a selective basis.  CMS and the State will initiate a joint 
procurement and select eligible plans through a Participating Plan Selection Committee, 
comprised of designated representatives from CMS and the State.   
   
3.  Medicare Waiver Approval: Based on recommendations from the Participating Plan 
Selection Committee, CMS will prepare a memo seeking formal Administrator 
approval of Medicare waivers and variances. 
 
4.  Medicaid Waiver and/or Medicaid State Plan Approval: Based on 
recommendations from the Participating Plan Selection Committee, CMS will prepare 
a memo seeking formal Administrator approval of Medicaid waivers and variances.    
 
  If the State does not currently have Medicaid managed care authority for Medicaid-
Medicare enrollees available under a Medicaid waiver or through the Medicaid State 
plan, the State will be required to secure such authority or obtain 1915(a) contract 
authority for the Participating Plans. 
 
5.   Readiness Review: CMS and the State shall conduct a readiness review of each selected 
Participating Plan.  Prior to the Participating Plan Contract execution, both CMS and the 
State must agree that a Participating Plan has satisfied all readiness requirements.  CMS 
and the State will collaborate in the design and implementation of the readiness review 
process and requirements.  This readiness review shall include an evaluation of the 
capacity of each potential Participating Plan and its ability to meet all program 
requirements.  
 
6.  Participating Plan Contract: CMS and the State shall develop a single Participating 
Plan Contract and contract negotiation process that both parties agree is administratively 
effective and ensures coordinated and comprehensive enforcement and oversight of the 
Participating Plan Contracts consistent with the desired goal for of administrative 
efficiencies.  
 
C.  ENROLLMENT  
 
1.  Eligible Populations:  Persons in the State who are eligible for Medicare and full 
Medicaid benefits will be eligible for enrollment in this initiative.  Beneficiaries 
participating in Medicare Advantage, Medicaid managed care and Program of All-
inclusive Care for the Elderly (PACE) may participate in this initiative if they 
disenroll from their existing programs. CMS will work with the State to address 
participation in other programs or initiatives. State specific eligibility is provided in 
Appendix 3. 
 
3 
         2.   Enrollment and Disenrollment Processes:  CMS and the State agree that enrollment 
into a Participating Plan may be conducted using a single, seamless, passive enrollment 
process that provides the opportunity for beneficiaries to make a voluntary choice to 
enroll or disenroll from the Participating Plan at any time. Disenrollment from 
Participating Plans and transfers from one Participating Plan to another shall be allowed 
on a month-to-month basis any time in the year throughout the entire duration of the 
initiative.  As mutually agreed upon, CMS and the State may choose to allow for the 
facilitation of this enrollment utilizing an independent third party entity.  Participating 
Plan enrollments and disenrollments shall become effective on the same day for both 
Medicare and Medicaid. 
 
3.   Uniform Enrollment/Disenrollment Documents: CMS and the State shall develop and  
  require the use of single enrollment and disenrollment documentation.                           
 
4.   Monitoring, Outreach, and Education:  CMS and the State agree that all outreach and 
education materials and activities shall require approval by CMS and the State prior to 
dissemination, and shall be subject to a single set of rules.   
 
D.  DELIVERY SYSTEMS AND BENEFITS 
 
1.   Participating Plan Service Capacity: CMS and the State shall contract with 
Participating Plans that demonstrate the capacity to provide, directly or by 
subcontracting with other qualified entities, the full continuum of Medicare and 
Medicaid covered services to enrollees, in accordance with the Participating Plan 
contract.  Medicare covered benefits shall be in accordance with 42 C.F.R. 422.101.   
Medicaid covered benefits shall be in accordance with the requirements in the 
approved Medicaid State plan.  In accordance with the Participating Plan contract, 
CMS and the State may choose to allow for greater flexibility in offering 
supplemental benefits that exceed those currently covered by either Medicare or 
Medicaid to the extent that they are provided under the blended Medicare and 
Medicaid payment rate specified below.  CMS and the State shall establish a process 
for Participating Plans to notify CMS and the State of all changes to its Provider 
Network and to provide a contingency plan for assuring continued access to care for 
enrollees in the case of a Participating Plan provider contract termination and/or 
insolvency of provider within a Participating Plan Provider Network. CMS, the State 
and Participating Plans will ensure that beneficiaries have access to an adequate 
network of medical and supportive service providers that are appropriate and 
competent for the needs of this population.  
 
2.  Participating Plan Risk Arrangements: CMS and the State shall require each 
Participating Plan, as part of the application process, to provide a detailed description of 
its risk arrangements with all providers under subcontract with the Participating Plan. It 
will not be acceptable for any incentive arrangements to include any payment or other 
inducement to withhold, limit or reduce medically necessary services to enrollees.   
 
4.   Participating Plan Financial Solvency Arrangements: CMS and the State shall 
establish a standard for all Participating Plans to demonstrate financial solvency that  
 
4 
         could include one of the following: 1) the solvency requirements for Medicare 
Advantage plans at 42 CFR 422.400; or 2) the solvency requirements for Medicaid 
managed care organizations at 42 USC 1396b(m)(1); or 3) the solvency requirements 
for PACE providers at 42 CFR 460.80; or 4) or other solvency standard as agreed 
upon in writing by CMS and the State. 
 
E.  BENEFICIARY PROTECTIONS, PARTICIPATION, AND CUSTOMER 
SERVICE 
 
1.   Beneficiary Participation on Governing and Advisory Boards: CMS and the State 
shall require Participating Plans to establish meaningful beneficiary input processes 
that may include beneficiary participation on Participating Plan governing boards 
and/ or establishment of Participating Plan beneficiary advisory boards. 
 
2.  Enrollee Communications: CMS and the State agree that all Enrollee materials, in 
all forms, shall require approval by CMS and the State prior to use.  Such materials 
shall be integrated to the extent possible and include, but not be limited to: outreach 
and education materials; enrollment and disenrollment materials; benefit coverage 
information; and operational letters for enrollment, disenrollment, claims or service 
denials, complaints, internal appeals, external appeals, and provider terminations. 
Such uniform/ integrated materials will be required to be accessible and 
understandable to the beneficiaries that will be enrolled in the plan.  This includes 
individuals with disabilities and those with limited English proficiency, in accordance 
with current Federal guidelines for Medicare and Medicaid.  
 
3.  Participating Plan Customer Service Representatives: CMS and the State shall require 
Participating Plans to employ customer service representatives who shall answer Enrollee 
inquiries and respond to Enrollee complaints and concerns.  
 
4.  Privacy: CMS and the State shall require all Participating Plans to ensure privacy of 
enrollee health records, and provide for access by enrollees to such records as specified in 
the contract. 
 
5.   Appropriate Care: CMS, the State, and Participating Plans shall ensure that all care 
meets the beneficiarys needs, and is provided in a manner that is sensitive to the 
beneficiarys language and culture, allows for involvement of caregivers, and in an 
appropriate care setting, including in the home and the community.  CMS, the State, and 
Participating Plans shall ensure that care is person-centered and can accommodate and 
encourage consumer-direction.   
 
F.  INTEGRATED APPEALS 
 
1.  Participating Plan Complaints and Internal Appeals Processes: CMS and the State 
agree to develop a unified set of requirements for Participating Plan complaints and 
internal appeals processes that incorporate relevant Medicare Advantage, Medicare Part 
D and Medicaid managed care requirements, which will be specified in the Participating 
Plan Contract.  All Participating Plan Complaints and Internal Appeals processes shall be  
 
5 
           subject to the review and prior approval of CMS and the State. 
 
2.  External Appeals Processes: CMS and the State agree to utilize a single Appeals 
process that will be developed utilizing both Medicare and Medicaid requirements.  
Protocols will be developed to assure coordinated access to the appeals mechanism.  
 
G. ADMINISTRATION AND REPORTING 
 
1.  Participating Plan Contract Management: CMS and the State agree to designate 
representatives to serve on a CMS-State Contract Management team which shall 
conduct periodic Participating Plan contract management activities related to ensuring 
access, quality, program integrity, and financial solvency. 
 
These activities shall include but not be limited to: 
 
  Reviewing  and  analyzing  Health  Plan  Employer  Data  and  Information  Set 
(HEDIS) data, Consumer Assessment of  Health Plan Satisfaction (CAHPS) data, 
Health Outcomes Survey data, enrollment and disenrollment reports, and reports 
of Enrollee Complaints, reviewing compliance with applicable CMS and/or State 
Medicaid Agency standards, and initiating programmatic changes and/or changes 
in clinical protocols, as appropriate.  
 
  Reviewing and analyzing reports on Participating Plans fiscal operations and 
financial solvency, conducting program integrity studies to monitor fraud, waste 
and abuse as may be agreed upon by CMS and the State, and ensuring that 
Participating Plans take corrective action, as appropriate. 
 
  Reviewing  and  analyzing  reports  on  Participating  Plans  network  adequacy, 
including the plans ongoing efforts to replenish its network. 
 
  Reviewing any other applicable ratings and measures. 
 
2.  Day-to-Day Participating Plan Monitoring: CMS and the State will establish 
procedures for Participating Plan monitoring that will include responsibilities for day-to-
day monitoring.  CMS or its contractors may directly communicate with Participating 
Plans as necessary. 
 
3.  Consolidated Reporting Requirements: CMS and the State shall define and specify 
in the Participating Plan Contract a Consolidated Reporting Process for Participating 
Plans that ensures the provision of the necessary data on diagnosis, HEDIS measures, 
Enrollee satisfaction and evidence-based measures and other information as may be 
beneficial in order to monitor each Participating Plans performance.  Participating 
Plans will be required to meet the encounter reporting requirements that are 
established for the Initiative.   
 
 
 
6 
         4.  Accept and Process Assessment Data: CMS, or its designated agent conducting the 
evaluation, and the State shall accept and process uniform person-level Enrollee Data, 
as may be necessary for the purposes of program eligibility, payment, or for 
evaluation purposes.   Sources may be based upon an initial and ongoing assessment 
process which includes ICD-9 (and ICD-10, as appropriate) diagnoses codes, Health 
Outcomes Survey for enrollees who are able to self-report, Functional Status elements 
of the Minimum Data Set (MDS), and/or any other data elements deemed necessary 
by CMS and the State.  
 
H.  QUALITY MANAGEMENT 
 
1.  Quality Management and Monitoring: As an Innovation Center demonstration, 
there will be a rigorous evaluation, which will include quality measures designed to 
ensure beneficiaries are receiving high quality care.  In addition, CMS and the State 
shall jointly conduct a single comprehensive quality management process in 
accordance with Medicare Advantage and Medicaid managed care requirements.  The 
reporting frequency and monitoring process will be specified in the Participating Plan 
Contract.  
 
2.   External Quality Reviews: CMS and the State shall coordinate the Participating 
Plan external quality reviews conducted by the Quality Improvement Organization 
(QIO) and External Quality Review Organization (EQRO).   
 
3.  Determination of Applicable Quality Standards: CMS and the State shall  
determine applicable quality standards and monitor the Participating Plans 
compliance with those standards. 
 
I.  FINANCING AND PAYMENT 
 
Blended Medicare and Medicaid Payment: Participating Plans will receive a capitated 
payment from CMS (for the Medicare portion of services) and the State (for the Medicaid 
portion of services) as detailed in Appendix 6, the combination of which will make up the 
full amount paid to the plan for the blended Medicare and Medicaid payment for 
Medicare-Medicaid enrollees in the geographic area.  As agreed upon, CMS and the State 
shall develop blended Medicare and Medicaid health plan rates that will allow both the 
State and the Federal government to achieve savings as compared against the lower of 
expected FFS or managed care spending for Medicare and Medicaid, respectively, for 
each service area.  
 
J.   EVALUATION 
 
1.  Evaluation Data to be Collected: CMS and the State shall develop processes and 
protocols for collecting or ensuring the Participating Plans contractors collect and 
report to CMS and the State the data needed for the evaluation. 
 
 
 
7 
         2.  Evaluation Contract: CMS or its designated agent will conduct an evaluation to 
measure the impact of Participating Plans and the effectiveness of the process to 
enroll beneficiaries into Participating Plans.  CMS and the State will collaborate on 
and coordinate during any evaluation activity. 
 
K.  MODIFICATION OR TERMINATION OF AGREEMENT 
 
Either CMS or the State may seek to modify or amend the MOU on a periodic basis per a 
written request.  CMS or the State may elect not to continue the demonstration at any 
time provided that a minimum of 90 days advance notice is provided to either CMS or the 
State, 90 day advance notice is given to Participating Plan contractors, and 60 days 
advance notice is given to enrollees and the general public. 
 
L.  SIGNATURES 
 
This MOU is effective on this day forward [insert date] through the end of the 
demonstration period [insert date].   
 
In Witness Whereof, CMS and [Name of State] have caused this Agreement to be 
executed by their respective authorized officers: 
 
 
United States Department of Health and Human Services, Centers for Medicare & 
Medicaid Services: 
 
       
(Authorized Signatory)    (Date) 
 
 
   
(Title) 
 
[Name of State], [Name of State Agency]: 
 
       
(Authorized Signatory)    (Date) 
 
 
   
(Title) 
 
 
 
 
 
 
 
 
8   
          
[PLACEHOLDER FOR APPENDICES to be provided through planning activities with 
the State.] 
 
 
Appendix 1:  Definitions       
Appendix 2:   CMS Standards and Conditions Checklist and Supporting State 
Documentation               
Appendix 3:   Details of State Demonstration Area          
Appendix 4:   Medicare Authorities and Variances           
Appendix 5:   Medicaid Authorities and Variances           
Appendix 6:   Payments to Participating Plans           
    Appendix 7:   Operation Manual 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         ATTACHMENT : Draft MOU Template for Managed FFS Model 
 
 
 
 
Memorandum of Understanding (MOU) 
 
 
 
Between 
 
 
The Centers for Medicare & Medicaid Services (CMS) Innovation Center 
 
And 
 
[Name of State] 
 
 
Regarding A Federal-State Partnership to Test a Managed Fee-for-Service 
Financial Alignment Model for Medicare-Medicaid Enrollees 
 
 
 
[Insert Name of Initiative] 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         TABLE OF CONTENTS 
 
 
 
I.  Statement of Initiative             Page 1 
     
II.  Specific Purpose of This Memorandum of Understanding    Page 2 
     
III.  Program Design / Operational Plan          Page 2 
            
A.     Program Authority            Page 2 
B.     Eligibility              Page X 
C.    Delivery Systems and Benefits        Page X       
D.     Beneficiary Protections, Participation and  
    Customer Service             Page X 
E.       Administration and Reporting        Page X 
F.       Quality Management            Page X 
G.       Financing and Payment          Page X 
H.       Evaluation              Page X 
I.              Modification or Termination of Agreement      Page X 
J.      Signatures              Page X 
         
 
Appendices [To be provided through planning activities with the State] 
 
1.  Definitions                Page X 
2.   CMS Standards and Conditions Checklist and Supporting State 
Documentation              Page X 
3.  Details of State Initiative and Geographic Area      Page X 
4.  Medicaid Authorities and Variances          Page X 
5.  Medicare Authorities and Variances          Page X 
  6.  Performance Payments to the State          Page X 
  7.  Operation Manual              Page X 
 
          
 
          
 
I.   STATEMENT OF INITIATIVE 
 
To establish a Federal-State partnership between the Centers for Medicare & Medicaid Services 
(CMS) and the [Name of State] to implement the [Name of Initiative] to better serve individuals 
eligible for both Medicare and Medicaid (Medicare-Medicaid enrollees or dual eligibles). 
The partnership will provide the State with a new opportunity to establish care management 
programs for Medicare-Medicaid enrollees that will coordinate services across the two programs 
to better align benefits, delivery, care coordination, financing and administration.  The initiative 
is intended to alleviate fragmentation and improve coordination of services for Medicare-
Medicaid enrollees, enhance quality of care and reduce costs for the State and the Federal 
government.   
 
Individuals who are eligible for Medicare and full Medicaid benefits in the State will be eligible 
for enrollment in this initiative.  State specific eligibility for the initiative is provided in 
Appendix 3. 
 
Under this initiative, the State will take accountability for ensuring the effective coordination of 
all medically necessary Medicare and Medicaid-covered services.  In return, the State will be 
eligible for a retrospective performance payment based on Medicare savings net of increased 
Federal Medicaid costs.  CMS and the State will ensure that beneficiaries have access to 
interdisciplinary teams of providers to assure the provision of medical and supportive services in 
a coordinated and clinically effective manner.  
 
The initiative will test new care delivery, payment and financing models to promote better care 
and align the incentives for improving care and lowering costs between Medicare and Medicaid.  
Program oversight will focus on performance measurement and continuous quality improvement.  
States will be expected to comply with all applicable existing Medicaid rules and regulations as 
well as to assure access to all Medicare covered services.  States must also comply with all terms 
and conditions specific to this initiative and evaluation requirements.   
 
CMS will allow for certain benefit and eligibility flexibilities that will further the goal of 
providing a seamless experience for Medicare-Medicaid enrollees.  Such flexibilities may 
include, but are not limited to, benefit and coverage flexibilities to better align Medicare and 
Medicaid for such enrollees, care management across programs, and eligibility flexibilities to 
allow States to target Medicare-Medicaid enrollees in a specific geographic area. Flexibilities 
will be coupled with specific beneficiary safeguards and will be included in a final agreement.  
 
Demonstrations under this initiative would be no longer than three years. 
 
II.   SPECIFIC PURPOSE OF THIS MEMORANDUM OF UNDERSTANDING 
 
This document details the general principles under which CMS and the State will implement and 
operate [Insert Name of Initiative]. (See Appendix 1 for definitions of terms used in this 
Memorandum of Understanding [MOU].)  It also outlines the activities which CMS and the State 
agree to conduct in preparation for planned implementation of the initiative in DATE.   
 
 
1 
 
   
 
Before this agreement is signed, the State will ensure necessary planning activities consistent 
with the CMS checklist of standards and conditions for participation as detailed through 
supporting documentation provided in Appendix 2.   
 
Once the MOU is signed and agreed upon, CMS and the State will enter into a final agreement, 
which will include an operating manual that will specify the administrative activities CMS and 
the State will conduct in support of the initiative. As agreed upon, the operation manual will be 
appended to the signed MOUs and may be subject to periodic updating.  
 
III.   PROGRAM DESIGN / OPERATIONAL PLAN    
 
A.  PROGRAM AUTHORITY 
 
1.  Medicaid Authority: The Medicaid elements of the initiative shall operate according to 
existing Medicaid law and regulation except to the extent that variances from these 
requirements are provided for in Appendix 4.   States proposing to implement managed FFS 
delivery models, including but not limited to primary care case management or health homes, 
will submit contracts for these services to CMS for review prior to implementation.  
 
2.  Medicare Authority: The Medicare portions of the initiative shall operate according to 
existing Medicare law and regulation, except to the extent that variances from these 
requirements are provided for in Appendix 5.    
 
B.  ELIGIBILITY  
 
2.  Eligible Populations:  Individuals who are eligible for Medicare and full Medicaid benefits 
in the State will be eligible to participate in this initiative.  CMS will work with the State to 
address participation in other programs or initiatives. Beneficiaries participating in Medicare 
Advantage, Medicaid managed care and Program of All-inclusive Care for the Elderly 
(PACE) may participate in this initiative if they disenroll from their existing programs. State 
specific eligibility is provided in Appendix 3. 
 
2.   Participation Processes:  The State and CMS will agree upon the date in which an individual is 
determined to have become a participant in the initiative and provide specifications in the Final 
Agreement.  Generally, this will not exceed thirty days after becoming eligible for this initiative 
(by gaining dual eligible status, by moving into the service area, etc.).  
 
3.   Uniform Informational Documents: CMS and the State shall develop and require the use of an 
informational document which will inform the beneficiary of the goals of the initiative, any 
operational issues related to receiving care,  his/her selection for participation, and other 
information about his/her rights related to participation and receiving care.  
 
4.   Outreach and Education:  CMS and the State agree that all outreach and education materials 
and activities shall require approval by CMS prior to dissemination.  Such materials shall be 
integrated to the extent possible and include, but not be limited to: outreach and education 
materials; benefit coverage information; and operational letters. Such uniform/ integrated  
 
2 
          
 
  materials will be required to be accessible and understandable to the beneficiaries.  This includes  
  individuals with disabilities and those with limited English proficiency, in accordance with 
current Federal guidelines for Medicare and Medicaid. 
 
C.  DELIVERY SYSTEMS AND BENEFITS 
 
1.  Delivery Systems:  The State is accountable for providing or arranging for fully integrated 
care and must ensure that all benefits are coordinated across Medicare and Medicaid for 
Medicare-Medicaid enrollees.  
 
2.   Medicare and Medicaid Benefits.  The State shall demonstrate its ability to assure 
continued access, directly or by subcontracting with other qualified entities, to the full 
continuum of Medicare and Medicaid covered services. Medicare covered benefits shall be 
provided in accordance with existing Medicare FFS rules. Medicaid covered benefits shall be 
in accordance with the requirements in the approved Medicaid State plan and any applicable 
waivers.   
 
D.  BENEFICIARY PROTECTIONS, PARTICIPATION AND CUSTOMER SERVICE 
 
1.   Beneficiary Participation: The State shall demonstrate meaningful beneficiary participation 
on development and oversight of the initiative. 
 
2.  Enrollee Service Representatives: The State shall assure that its enrollee services 
representatives can answer inquiries and respond to complaints and concerns.  
 
3.   Appropriate Care: CMS and the State shall ensure that all necessary care to meet the 
beneficiarys needs is included in the overall coordination of benefits across Medicare and 
Medicaid, and is provided in a manner that is sensitive to the beneficiarys language and culture, 
allows for involvement of caregivers, and in an appropriate care setting, including in the home 
and the community.  CMS and the State shall ensure that care is person-centered and can 
accommodate and encourage consumer-direction.   
 
4.  Grievance and Appeals: The State must assure that individuals have access to all grievance 
and appeal rights under Medicare or Medicaid, or both, and assist the participant in choosing 
which to pursue if both are applicable. 
 
5. Privacy: CMS and the State shall ensure privacy of enrollee health records, and provide for 
access by enrollees to such records. 
 
E.  ADMINISTRATION AND REPORTING 
 
1.  Day-to-Day Monitoring: CMS and the State shall agree that the State will be responsible for the 
day-to-day monitoring of the program with periodic reporting to CMS in an agreed upon manner 
and timeline, which will be specified in the Final Agreement.   
 
2.  Consolidated Reporting Requirements: CMS and the State shall define a Consolidated 
Reporting Process to ensure the provision of necessary data, quality measures, beneficiary  
 
3 
          
 
  satisfaction and evidence-based measures and other information as may be beneficial in order 
to monitor the initiative.  This process will be specified in the Final Agreement.   
 
3.  Accept and Process Assessment Data: CMS, or its designated agent conducting the 
evaluation, and the State shall accept and process uniform person-level beneficiary data, as 
may be necessary for the purposes of program eligibility, payment, or evaluation purposes. 
Sources may be based upon an initial and ongoing assessment process which includes ICD-9 
(and ICD-10, as appropriate) diagnoses codes, Health Outcomes Survey for enrollees who 
are able to self-report, Functional Status elements of the Minimum Data Set (MDS), and/or 
any other data elements deemed necessary by CMS and the State.  
 
F.  QUALITY MANAGEMENT 
 
1.  Determination of Applicable Quality Standards: As an Innovation Center demonstration, 
there will be a rigorous evaluation, which will include quality measures designed to ensure 
beneficiaries are receiving high quality care.  In addition, CMS and the State shall determine 
applicable quality measures, standards, and reporting requirements, which shall be specified 
in the Final Agreement, and monitor the programs performance related to those standards.  
Any performance payment will be contingent upon meeting the established quality standards 
to assure the demonstrations are not only producing savings but also improving quality of 
care. 
 
2.   Quality Management and Monitoring: CMS and the State shall jointly conduct a single 
comprehensive quality management process in accordance with related Medicare and 
Medicaid quality requirements.  
 
G.  FINANCING AND PAYMENT 
 
1.  Medicare and Medicaid Payment: Participating providers will continue to receive FFS 
payment from CMS (for the Medicare portion of services) and the State (for the Medicaid 
portion of services) as detailed in Appendix 6. 
 
2.  Savings Determination:  Aggregate savings and related savings targets shall reflect 
Medicare savings net of increased Federal Medicaid costs across the two programs and 
support quality and performance goals.  CMS and the State agree that CMS will be 
responsible for making the final savings determinations using a methodology and CMS-
specified parameters that will be detailed in the Final Agreement. 
   
H.   EVALUATION 
 
1.  Evaluation Data to be Collected: CMS and the State shall develop processes and protocols 
for collecting and reporting to CMS the data needed for evaluation, which will be specified in 
the Final Agreement. 
 
2.  Evaluation Contract: CMS or its designated agent will conduct an evaluation to measure 
the impact of this initiative.  CMS and the State will collaborate on and coordinate during 
any evaluation activity. 
 
4 
          
 
 
I.   MODIFICATION OR TERMINATION OF AGREEMENT 
 
Either CMS or the State may seek to modify or amend the MOU on a periodic basis per a written 
request.  CMS or the State may elect not to continue the demonstration at any time provided that 
a minimum of 90 days advance notice is provided to either CMS or the State Medicaid agency 
and 60 days advance notice is given to enrollees and the general public. 
 
J.  SIGNATURES 
 
This MOU is effective on this day forward [insert date] through the end of the demonstration 
period [insert date].   
 
In Witness Whereof, CMS and [Name of State] have caused this Agreement to be executed by 
their respective authorized officers: 
 
 
United States Department of Health and Human Services, Centers for Medicare & 
Medicaid Services: 
 
       
(Authorized Signatory)    (Date) 
 
 
   
(Title) 
 
[Name of State], [Name of State Agency]: 
 
       
(Authorized Signatory)    (Date) 
 
 
   
(Title) 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
          
 
PLACEHOLDER FOR APPENDICES [To be provided through planning activities with the 
State] 
 
Appendix 1:  Definitions                 
Appendix 2:   CMS Standards and Conditions Checklist and Supporting State 
Documentation               
Appendix 3:  Details of State Initiative and Geographic Area 
Appendix 4:  Medicare Authorities and Variances           
Appendix 5:  Medicaid Authorities and Variances           
  Appendix 6:  Performance Payments to the State 
  Appendix 7:  Operation Manual