Background

Dual-eligible beneficiaries—individuals eligible for both Medicare and  Medicaid—generally fall into two categories: low-income seniors (those  aged 65 years old and over) and individuals with disabilities under the  age of 65 years. Requirements to protect the rights of beneficiaries under  both programs are of particular importance to dual-eligible beneficiaries  because of their generally greater health care needs. Several efforts have  been made in the past to better integrate care for dual-eligible  beneficiaries.

		Medicare

Medicare is a federally financed program that in 2011 provided health  insurance coverage to nearly 49 million beneficiaries—people age 65 and  older, certain individuals with disabilities, and those with end-stage renal  disease. In Medicare FFS, beneficiaries may choose their health care  providers among any enrolled in Medicare. However, CMS also contracts  with MA organizations, private entities that offer managed care plans to  Medicare beneficiaries. As of 2011, about 25 percent of Medicare  beneficiaries were enrolled in a MA plan.
As part of the agency’s oversight of MA plans, CMS responds to  complaints from beneficiaries and other parties, conducts surveillance,  and conducts compliance audits. CMS responds to complaints from  beneficiaries, health care providers, and other parties that come into the  agency through a 1-800-MEDICARE phone line. It is through this  mechanism that CMS generally resolves issues that are beneficiary- specific. CMS conducts surveillance by having routine discussions with  managed care organizations, monitoring plan-submitted data, and  tracking and monitoring complaint rates by MA plan and complaint  category. CMS uses compliance audits to assess whether a managed  care organization’s operations are consistent with federal laws,  regulations, and CMS policies and procedures. Audits typically involve a  combination of desk reviews of documents submitted by MA  organizations, and, at CMS’s discretion, site visits.

		Medicaid

Medicaid is a joint federal-state program that finances health care  coverage for certain low-income individuals.matching funds for services provided to Medicaid beneficiaries, each  state must submit a state Medicaid plan for approval by CMS. The state  Medicaid plan defines how the state will operate its Medicaid program,  including which populations and services are covered.
States must operate their Medicaid programs within broad federal  parameters. While complying with these federal requirements, however,  states have the flexibility to tailor their programs to the populations they  serve, including the imposition of additional protections for beneficiaries.  For example, states generally are required by federal Medicaid law to  cover certain benefits, while other benefits may be included at a state’s  option. Subject to CMS approval, states may choose to operate a portion  of or their entire Medicaid programs as FFS or managed care. With  respect to managed care, states vary widely in terms of the scope of  services they provide and the populations they enroll.
States have certain options when considering whether to enroll Medicaid  beneficiaries into managed care, including whether enrollment is  voluntary or mandatory. States may obtain the authority to mandatorily  enroll Medicaid beneficiaries into managed care plans with CMS approval  of a state plan amendment. However, under federal law, states cannot  require certain categories of beneficiaries, including dual-eligible  beneficiaries, to mandatorily enroll under this authority. states may obtain the authority to enroll Medicaid beneficiaries, including  dual-eligible beneficiaries, into managed care through the approval of two  types of Medicaid waivers:
Section 1115 of the Social Security Act provides the Secretary of  Health and Human Services with the authority to grant states waivers  of certain federal Medicaid requirements and allow costs that would  not otherwise be eligible for federal funds for the purpose of  demonstrating alternative approaches to service delivery.
Under a 1915(b) waiver, the Secretary may waive certain Medicaid  requirements, allowing states to operate a managed care program to  the extent it is cost-effective and consistent with the purposes of the  program.
See 42 U.S.C. § 1396u-2(a)(1)-(2). managed care plans. However, more recently states are beginning to  move dual-eligible beneficiaries into managed care plans as well. In 2010,  about 9.3 percent of dual-eligible beneficiaries were enrolled in Medicaid  managed care plans.
Another type of waiver, the 1915(c) waiver, is the primary means by  which states provide home- and community-based services (HCBS) to  Medicaid beneficiaries. Under a 1915(c) waiver, states can provide HCBS  that may not be available under the state’s Medicaid plan to beneficiaries  that would, if not for the services provided under the waiver, require  institutional care.may provide under a 1915(c) waiver or through the state’s Medicaid plan,  in addition to other services such as respite care, personal care, and case  management.
Home health care is one of the services that states  At the federal level, CMS oversight of state Medicaid programs includes  monitoring the programs and providing guidance to states. States must  provide assurances to CMS that they have mechanisms in place to  ensure that any managed care organization with which the state contracts  complies with federal regulations in order to obtain approval for enrolling  Medicaid beneficiaries into managed care. Though CMS is not a party to  the contract, states are required to obtain CMS approval of the contracts  between states and managed care organizations in order to qualify for  federal funding. States administer the day-to-day operations of their  Medicaid programs. At the state level, requirements for Medicaid  managed care plans are often included as part of the contract between  the state and the managed care plan and may derive from federal or state  law, regulations, or policies. States generally oversee managed care  plans through a combination of informal and formal monitoring that may  include regular meetings, reviews of plan-submitted reports, audits, and  financial reviews.

		Selected Consumer Protection Requirements

Medicare and Medicaid have a number of requirements intended to  protect the rights of beneficiaries, some of which are of particular  importance to dual-eligible beneficiaries.
Medicare and Medicaid have requirements that specify the circumstances  under which a beneficiary may be compelled to enroll in a managed care  plan instead of obtaining services through the FFS program. How  beneficiaries are enrolled in managed care, for example whether the  enrollment is mandatory or voluntary, could have implications for dual- eligible beneficiaries who may have more serious health care needs and  who, because of cognitive impairments, may require assistance in  understanding their options or the implications of their choices.
In general, federal law and regulations do not specifically require MA  plans or Medicaid managed care plans to cover services provided by a  beneficiary’s previous providers if that provider is not in the plan’s network  when a beneficiary first enrolls in a plan or switches plans. There are  limited circumstances when managed care plans are required to cover  such services during a transition period. Medicare and Medicaid also  have certain federal requirements for managed care plans to ensure  coordination of at least some services for beneficiaries. Dual-eligible  beneficiaries often have complex health care needs and, therefore, may  see several different providers. Accordingly, continuing relationships with  providers, as well as ensuring coordination of care, is of particular  importance to this population.
Medicare and Medicaid have requirements for managed care plans to  maintain provider networks that ensure beneficiaries can access a range  of health care providers and obtain services in a timely manner. Within  Medicaid managed care, provider participation problems have been  specifically noted for specialty and dental care.
Medicare and Medicaid have requirements about the type and format of  materials provided to beneficiaries to promote enrollment into a managed  care plan or communicate information about coverage and costs.  Inappropriate marketing practices have in the past led some Medicare  beneficiaries to enroll in MA plans in which they had not intended to enroll  or that did not meet their health care needs. Inappropriate marketing may  include activities such as providing inaccurate information about covered  benefits and conducting prohibited marketing practices, such as door-to- door marketing without appointments and providing potential beneficiaries  with meals or gifts of more than nominal value to induce enrollment.
Medicare and Medicaid have requirements about how beneficiaries can  qualify for certain services and the scope of coverage provided.  According to CMS, two services where coverage differences between  Medicare and Medicaid are particularly problematic for dual-eligible  beneficiaries are nursing facility services and home health care. While  both programs cover these benefits, they differ in terms of how a dual- eligible beneficiary can qualify for the benefit and the scope of the  coverage provided. As a result, there can be cost-shifting between the  programs.
Nursing Facility Services. Medicare and Medicaid both set requirements  for the conditions a beneficiary must meet to become eligible for coverage  of nursing facility services. Medicare’s coverage of nursing facility care is  limited to 100 days of posthospital skilled nursing facility (SNF) services.
SNF services may only be provided in an inpatient setting and include  skilled nursing (such as intravenous injections, administration of  prescription medications, and administration and replacement of  catheters); room and board; and physical, occupational, and speech  language therapies. In contrast, Medicaid’s coverage of nursing facility  services includes skilled nursing, rehabilitation needed due to injury,  disability or illness, and long-term care. Under federal law, state  Medicaid programs must cover nursing facility services for qualified  individuals age 21 or over. All states have chosen to also offer the  optional benefit of nursing facility services for individuals under 21 years  of age.
Medicare beneficiaries may continue to need nursing facility care after  their Medicare benefit is exhausted. In such instances beneficiaries may  pay privately or use any long-term care insurance they may have. In  certain circumstances, the beneficiaries may also be eligible for Medicaid  if, for example, they spend enough of their resources to meet Medicaid  eligibility rules in their state. If the beneficiary does become dually eligible,  the beneficiary may then qualify for Medicaid coverage of nursing facility  services, beyond what Medicare covers.
Overlapping coverage of nursing facility care in Medicare and Medicaid  provides nursing facilities with a financial incentive to transfer dual-eligible  beneficiaries back to hospitals when nursing facility care is being paid for  by Medicaid. By transferring dual-eligible beneficiaries from a nursing  facility to a hospital, the nursing facility will qualify for what is generally a  higher payment under Medicare when beneficiaries are readmitted and  require skilled nursing services. One study of hospitalizations among  dually eligible nursing facility residents in 2005 found that approximately  45 percent of hospitalizations among beneficiaries receiving Medicare  SNF services or Medicaid nursing facility services were potentially  avoidable.
Home Health Care. Medicare and Medicaid both set requirements for how  a beneficiary can qualify for home health services, and state Medicaid  programs further refine these requirements for Medicaid coverage.  Medicare’s home health benefit covers skilled nursing services, physical  therapy, speech-language pathology, occupational therapy, medical  social services, and medical equipment. required to cover home health services for certain categories of  beneficiaries, including those who are entitled to nursing facility services  under the state plan. Under Medicaid’s home health benefit, states must  cover nursing services, home health aide services, and medical supplies  and equipment for use in the home. States may also choose to cover  physical, occupational, or speech therapy under this benefit. The  Medicare Payment Advisory Commission reported that some states have  tried to increase the proportion of home health services for dual-eligible  beneficiaries covered by Medicare, rather than Medicaid. For instance,  some states have required home health agencies to show proof of a  Medicare denial for home health services for a dual-eligible beneficiary  before covering the service under Medicaid.
Medicare may also cover home health aide services on a part-time or intermittent basis  if they are needed as support services for skilled nursing services. of daily living (ADL), instrumental activities of daily living (IADL),  supervision or guidance with ADLs, or a mix of those.
Beneficiaries’ ability to contest a determination that their benefits will be  denied, reduced, or terminated is a basic right provided for both Medicare  and Medicaid beneficiaries. must follow depends on whether the benefit being contested is a  Medicare or Medicaid benefit.

		Programs to Integrate Medicare and Medicaid for Dual-Eligible Beneficiaries

Both Medicare and Medicaid have standard appeals processes and expedited appeals  processes in cases of urgent need. In this report, we only describe the standard Medicare  and Medicaid appeals processes.
January 2012, 84 PACE sites in 29 states enrolled about 21,000  beneficiaries.

	Medicare and Medicaid Consumer Protection Requirements Vary across Programs, Payment Systems, and States

There are key differences in enrollment choice requirements across the  Medicare and Medicaid programs, the FFS and managed care payment  systems and the selected states. Certain consumer protection  requirements are unique to managed care plans in areas such as  continuity and coordination of care and provider networks. Other  consumer protection requirements also differ across the programs,  payment systems, and selected states.
The MMA authorized a type of MA plan referred to as a special needs plan to address  the unique needs of certain categories of Medicare beneficiaries, including dual-eligibles.  Pub. L. No. 108-173, § 231, 117 Stat. 2066, 2207 (2003) (codified, as amended, at   42 U.S.C. § 1395w-21(a)(2)(A)(ii)). SNPs, including D-SNPs, have been reauthorized  several times since their establishment was first authorized in 2003.

		Notable Differences Exist in Requirements for Enrollment Choice across the Programs, Payment Systems, and Selected States

Within Medicare, enrollment in managed care is always voluntary,  whereas state Medicaid programs can require enrollment in managed  care in certain situations. In Medicare, beneficiaries—including dual- eligible beneficiaries—are enrolled in FFS unless they select an MA plan.  In general, beneficiaries may select an MA plan voluntarily when they first  become eligible for Medicare, during an annual coordinated election  period, or during special election periods, such as when an MA plan’s  contract is terminated or discontinued in the area where a beneficiary  lives or when CMS determines that beneficiaries meet exceptional  conditions. CMS has created a special election period for dual-eligible  beneficiaries, and accordingly, they may opt into MA or FFS or change  MA plans at any time. They generally may select any MA plan, including  D-SNPs, that serves the area where they live, though the number of plans  available varies by area. MA plans may limit the providers from whom  Medicare beneficiaries, including dual-eligible beneficiaries, may receive  covered services, whereas beneficiaries in Medicare FFS may receive  covered services from any provider enrolled in Medicare.
In contrast, a Medicaid beneficiary’s ability to choose to remain in FFS or  enroll in managed care depends on how the state structures its Medicaid  program. As an alternative to FFS, states can structure their Medicaid  programs to require enrollment in managed care, or allow beneficiaries to  choose between the two payment systems. Unlike in Medicare, states  can mandatorily enroll beneficiaries, including dual-eligible beneficiaries,  into Medicaid managed care with CMS approval of a section 1115  demonstration waiver or section 1915(b) waiver. States mandating  enrollment into a managed care plan generally must provide beneficiaries  a choice of at least two plans, except in specific circumstances, such as  in rural areas. Otherwise, similar to Medicare, the number of available  Medicaid managed care plans varies, depending on how many plans are  offered where the beneficiary lives. Subject to the terms and conditions of  the waiver, Medicaid managed care plans can generally limit  beneficiaries, including dual-eligible beneficiaries, to the plan’s provider  network, whereas beneficiaries in Medicaid FFS may receive covered  services from any qualified Medicaid provider. CMS officials informed  us, however, that for dual-eligible beneficiaries, the agency does not have  the authority to allow states to limit the beneficiary’s choice of provider for  Medicare covered benefits when mandatorily enrolling them into Medicaid  managed care plans.
State requirements vary with respect to Medicaid enrollment into FFS or  managed care and for choice between plans if beneficiaries enroll in  managed care. For example:
Arizona: The state requires Medicaid beneficiaries, including all dual- eligible beneficiaries, to enroll in either the Medicaid acute or long- term managed care programs under a section 1115 demonstration  waiver. Beneficiaries in the state’s acute care program have a choice  among managed care plans. Beneficiaries enrolled in the long-term  care program generally have a choice of plans if they live in or are  moving to Pima or Maricopa counties, which are the state’s two most  populated counties and the only counties where more than one long- term care plan operates.
California: Medicaid beneficiaries’ choice of payment system varies  depending on where they live among California’s 58 counties. In 28  mostly rural counties all dual-eligible beneficiaries are in FFS. In the  remaining 30 counties, the state has three different Medicaid  programs for enrolling beneficiaries in managed care. Dual-eligible  beneficiaries in 14 California counties are mandatorily enrolled in  managed care through a county-organized health system, which is a  health plan operated by a county that contracts with the state to  provide health care benefits to Medicaid beneficiaries. Because there  is only one plan in each of these counties, beneficiaries enrolled in the  county-organized health systems have no choice between plans.  Dual-eligible beneficiaries in 14 counties may choose between FFS or  the state’s Two-Plan managed care program. Under the Two-Plan  program, beneficiaries who enroll in managed care have a choice  between the Local Initiative Health Plan—a public agency that is  independent of the county—and a commercial plan. In the remaining  two counties—Sacramento and San Diego—dual-eligible beneficiaries  can choose between FFS or the Geographic Managed Care  program.eligible beneficiaries who enroll in managed care can choose from  several commercial managed care plans.
Under the Geographic Managed Care program, dual-
Minnesota: Dually eligible seniors in Minnesota must enroll in one of  two managed care programs, and dual-eligible beneficiaries who  became eligible on the basis of their disabilities can choose whether  to enroll in a managed care program. Minnesota has a 1915(b)(c)  waiver to mandatorily enroll dually eligible seniors in a Medicaid  managed care plan.
Alternatively, these seniors can choose to enroll  in a participating D-SNP that, under contract with the state, integrates  Medicare and Medicaid financing and services. Dual-eligible  beneficiaries age 18 to 64 who have disabilities may opt back into  FFS. If they do not opt into FFS, they are enrolled in managed care  and may opt into FFS at any time. Whether dual-eligible beneficiaries  have a choice between plans varies depending on the county where  they live.
North Carolina: According to North Carolina Medicaid officials, all  Medicaid beneficiaries, including dual-eligible beneficiaries, are in  FFS, and the majority of dual-eligible beneficiaries are in a primary  care case management program, where primary care providers are  paid on a FFS basis, in addition to receiving a monthly fee to perform  certain care coordination activities.

		Certain Requirements for Continuity and Coordination of Care, Provider Networks, and Marketing Materials Are Unique to Managed Care

			Continuity and Coordination of Care

In general, federal law and regulations do not specifically require MA  plans or Medicaid managed care plans to cover services provided by a  beneficiary’s previous providers if that provider is not in the plan’s network  when a beneficiary first enrolls in a plan or switches plans. There are  limited circumstances when managed care plans are required to cover  such services during a transition period. MA organizations must ensure  that covered services are available and accessible to beneficiaries. In  implementing this requirement, CMS officials informed us that MA  organizations must ensure that there is no gap in coverage or problems  with access to medically necessary services when a beneficiary must  change to a plan-contracted provider. For example, a beneficiary  receiving oxygen may need to switch to a new oxygen supplier when the  beneficiary joins the MA plan or switches plans. As the beneficiary  transitions to the new oxygen supplier, the MA plan may need to  reimburse the beneficiary’s previous provider to ensure that there is no  gap in coverage, and that the beneficiary maintains access to medically  necessary services. MA organizations also must ensure coordination of  services through various arrangements with network providers, such as  programs that coordinate plan services with community and social  services in the area, such as services offered by an area agency on  aging. Additionally, D-SNPs or any other type of SNP must provide  dual-eligible beneficiaries with access to appropriate staff to coordinate or  deliver all services and benefits, and coordinate communication among  plan personnel, providers, and the dual-eligible beneficiaries  themselves.
As with Medicare, Medicaid managed care plans are generally not  required to cover services by a beneficiary’s previous provider if that  provider is not in the plan’s network. However, states determine to what  extent Medicaid managed care plans must provide beneficiaries with  access to a person or entity primarily responsible for coordinating health  services on the basis of the services the plan must cover. Individual  states may have continuity of care requirements for their Medicaid  managed care programs, as defined under an applicable waiver or state  requirements. For example, in California, beneficiaries newly enrolled in  managed care plans may request and receive coverage of the completion  of treatments initiated by an out-of-network provider with whom they have  an ongoing relationship in certain circumstances, such as for the  treatment of a terminal illness or acute condition. The length of the  coverage depends on the stability of the beneficiary and the nature of the  medical condition. Minnesota also has continuity of care requirements.  For newly enrolled dually eligible seniors, managed care plans must  cover medically necessary services that an out-of-network provider, a  different plan, or the state agency authorized before the dual-eligible  beneficiary enrolled with the managed care plan. However, the plan is  allowed to require that the dual-eligible beneficiary receive the services  from an in-network provider if that would not create an undue hardship on  the dual-eligible beneficiary and the services are clinically appropriate.  Arizona requires that managed care plans employ transition coordinators  to ensure continuity of care, and beneficiaries in the state’s long-term  care program receive additional case management for help navigating  their care options, including planning, coordinating and facilitating access  to services.
Medicare and state Medicaid programs require managed care plans to  meet certain provider network standards. In order to limit beneficiaries to  a network of providers, MA organizations must meet a number of  requirements, including maintaining and monitoring a network of  appropriate providers, under contract, that is sufficient to provide  adequate access to covered services to meet the needs of enrolled  beneficiaries. Federal guidelines establish minimum network adequacy  requirements that vary depending on a county’s geographic designation,  such as whether the county is urban or rural. MA organizations must  contract with sufficient numbers of certain types of provider specialists per  1,000 Medicare beneficiaries in a county. For example, MA plans  operating in rural counties must have at least one full-time equivalent  (FTE) primary care provider per 1,000 beneficiaries. Additionally, MA  organizations must demonstrate that their network meets geographic  requirements related to the time and distance it takes beneficiaries to  travel to providers. For example, in rural counties, MA organizations must  also ensure that 90 percent of beneficiaries can access primary care  providers within 40 minutes and 30 miles of travel. MA organizations must  also ensure that the networks include a minimum number of specialists  and specialty facilities, such as at least one cardiologist and one skilled  nursing facility per 1,000 beneficiaries.
States must ensure, through contracts, that Medicaid managed care  plans demonstrate that they have the capacity to serve expected  enrollment in the service area in accordance with state standards. For  example, plans must submit documentation to the state that they offer an  appropriate range of preventive, primary care, and specialty services, and  maintain a network of providers that is sufficient in number, mix, and  geographic distribution to meet the needs of the enrollees.
Unlike Medicare, however, federal Medicaid laws and regulations do not  establish minimum provider network requirements and instead generally  require states to set the standards for access to care. Accordingly,  subject to the terms and conditions of a waiver, if applicable, states may  establish requirements that define the minimum number and types of  providers in a network, and time and distance requirements between  beneficiaries and primary care providers, as well as other network  adequacy requirements. For example, Medicaid managed care plans in  California must maintain a provider to beneficiary ratio of one FTE  primary care physician for every 2,000 beneficiaries and one FTE  physician from any specialty for every 1,200 beneficiaries. In some  counties, managed care plans must also ensure that primary care  physicians are located within 30 minutes or 10 miles of beneficiaries’  residences, unless the state approves an alternative time and distance  standard. In addition to time and distance standards, Arizona requires  managed care plans to contract with a specific number of providers, as  determined by the state, which varies by each area that the plan serves.  Arizona also defines time frames for beneficiaries to be able to access  some services. For example, Arizona Medicaid managed care plans must  provide beneficiaries with access to emergency primary care services  within 24 hours, urgent primary care services within 2 days, and routine  primary care services within 21 days. Plans must include a minimum  number of other types of providers—such as dentists, pharmacists,  home- and community-based services providers, and behavioral health  facilities—in their networks as well.
Medicare and Medicaid each have requirements regarding the marketing  materials managed care organizations send out to beneficiaries. MA  organizations are required to comply with a variety of federal  requirements for marketing materials that are intended to promote  enrollment in a specific health plan. For example, organizations generally  must submit marketing materials to CMS for review prior to sending to  beneficiaries. Materials must provide an adequate written description of  the plan’s benefits and services and comply with formatting requirements,  such as a minimum font size. In addition, MA organizations must translate  materials into any non-English language that is the primary language of at  least 5 percent of individuals in the plan’s service area.
Medicaid managed care plans are required to comply with both federal  and state requirements for marketing materials. For example, Medicaid  managed care plans must obtain state approval before distributing  marketing materials. Federal requirements also mandate that materials  must be written in an easily understood language and format, though  requirements for format are not precisely defined. In addition, plans must  make information, including Medicaid marketing materials, available in  each prevalent language spoken by enrollees and potential enrollees in  the plan’s service area. Subject to the terms and conditions of a waiver,  if applicable, states may further define requirements for readability and  material translation, while other states may prohibit marketing altogether.  For example, marketing materials in California must be translated when a  threshold number of beneficiaries whose primary language is not English  live in a managed care plan’s service area or in the same or adjacent zip  codes, among other circumstances. Additionally, all Medicaid marketing  materials in California must be written at no higher than the sixth-grade  reading level and be approved by the state Medicaid agency. Arizona  prohibits Medicaid managed care plans from conducting any marketing  that is solely intended to promote enrollment; all marketing materials must  include a health message.

		Other Requirements Also Vary by Program, Payment System, and State

Other requirements affecting dual-eligible beneficiaries, such as coverage  for nursing facility and home health services and the appeals process,  vary between Medicare and Medicaid, and between the FFS and  managed care payment systems.
Beneficiaries must meet different requirements to qualify for nursing  facility care under Medicare and Medicaid. As required under federal law,  to qualify for Medicare’s 100 days of SNF coverage, beneficiaries must  have a prior hospital stay. Specifically, Medicare beneficiaries must  have been hospitalized for medically necessary inpatient hospital care for  at least 3 consecutive calendar days, not including the discharge date. In  addition, Medicare beneficiaries must meet certain criteria, such as:   (1) require skilled nursing or rehabilitative services on a daily basis,   (2) services must only be rendered for a condition the beneficiary had  during hospitalization, and (3) require daily skilled services that can only  be provided in an SNF.
Unlike Medicare, Medicaid does not limit coverage of nursing facility  services to beneficiaries with prior hospital stays and states must cover  services provided by qualified SNFs as well as other types of nursing  facilities. Instead, federal Medicaid law requires states to provide  coverage of nursing facility services for adult Medicaid beneficiaries when  medically necessary. Within broad federal parameters, such as  requiring that beneficiaries need daily, inpatient nursing facility services  that are ordered by a physician, states may impose additional  requirements when defining coverage for this benefit.beneficiaries in North Carolina, must show they meet the requirements to  be in a nursing facility by demonstrating some qualifying conditions.  Qualifying conditions may include, among other things, (1) the need for  services that require a registered nurse a minimum of 8 hours a day and  other personnel working under the supervision of a licensed nurse, (2) the  need for restorative nursing to maintain or restore maximum function or  prevent deterioration in individuals with progressive disabilities as much  as possible, or (3) the need for a specialized therapeutic diet. In Arizona,  the acute care program covers nursing facility services for a limited  amount of time (90 days) if hospitalization will occur otherwise or the  treatment cannot be administered safely in a less restrictive setting, such  as at home. Medicaid beneficiaries in the long-term care program in  Arizona have longer-term nursing facility benefits. Beneficiaries qualify for  the long-term-care program when they have a functional or medical  condition that impairs functioning to the extent that the individual would be  deemed at immediate risk of institutionalization. Impairments may include,  among other things, requiring nursing care, daily nurse supervision,  regular medical monitoring, or presenting impairments with cognitive  functioning or self-care with ADLs.
Beneficiaries must meet different requirements to qualify for home health  services under Medicare and Medicaid. Medicare beneficiaries may only  qualify for home health coverage when they are confined to a home or an  institution that is not a hospital, SNF, or nursing facility. Additionally, the  beneficiary must be under the care of a physician, need intermittent   physical therapy, speech language pathology  skilled nursing care,services, or have a continuing need for occupational therapy services,  and receive services under a written plan of care.
Unlike in Medicare, states may not require that Medicaid beneficiaries be  confined to a home or institution in order to qualify for home health  benefits. Instead, federal regulations require that in order to qualify for  Medicaid coverage, home health services generally must be provided at  the beneficiary’s home and ordered by a physician as part of a written   As with nursing  plan of care, which must be renewed every 60 days. facility services, state Medicaid programs have the authority to impose  additional conditions on accessing home health benefits, and accordingly  state programs vary with respect to when beneficiaries may qualify for  home health benefits. For example, to receive home health coverage in  North Carolina, a physician must order the home health services and  must have face-to-face contact with the beneficiary 90 days prior to care  or 30 days after care, and the services must be medically necessary.  Beneficiaries must have at least one reason, from a specific list of  reasons set by the state, to receive home health services.beneficiaries might qualify if they require assistance leaving the home  because of a physical impairment or medical condition, or if they are  medically fragile.
For example,  Medicare and Medicaid each have multiple levels of appeals, which vary  further between each program’s managed care and FFS delivery  systems. Accordingly, the appeals processes that dual-eligible  beneficiaries encounter differ depending on whether the benefit being  denied, reduced, or terminated is a Medicare or Medicaid benefit, and  whether the individual is enrolled in FFS or managed care. Both  programs require that beneficiaries in either managed care and FFS be  notified of their right to appeal.
Medicare has five levels of appeals for managed care and FFS.  1.  Beneficiaries enrolled in an MA plan must first request review by the  MA organization. In FFS, beneficiaries first request review by the  claims processing contractor that made the initial coverage decision.2.  For MA, if the adverse determination is affirmed, the issues must be  automatically reviewed and resolved by an independent review entity,  and for Medicare FFS, beneficiaries may request review by a qualified   For beneficiaries in either FFS or managed  independent contractor.care, this is the earliest opportunity for their claim to be reviewed by a  different entity than the one that made the original determination.  3.  If the independent entity affirms the adverse determination, MA and  FFS beneficiaries have the right to request a hearing before an  administrative law judge (ALJ) in the Department of Health and  Human Services if the amount remaining in controversy—the  projected value of denied services or a calculated amount based on  charges for services provided—is above a specified level.  4.  MA and FFS beneficiaries who are dissatisfied with the ALJ hearing  decision may request review by the Medicare Appeals Council. 5.  MA and FFS beneficiaries may request judicial review by a U.S.  district court of a decision by the Medicare Appeals Council if the  amount in controversy is above a specified level.
42 C.F.R. §§ 405.1100, 422.608. The Medicare Appeals Council undertakes a de novo  review and may issue a final decision, dismiss the appeal, or remand the case to the ALJ  with instructions for rehearing the case. Medicare FFS beneficiaries may also request this  review if the ALJ dismissed their case or failed to issue a timely decision.
There are no federal Medicare requirements that benefits continue during  the appeals processes for either managed care or FFS, nor do federal  law and regulations require that FFS or MA beneficiaries receive personal  assistance, including assistance from a care coordinator or other  specialist, when navigating the appeals process. However, there are  certain protections incorporated into the appeals process that are  designed to assist Medicare beneficiaries. For example, Medicare  beneficiaries may appoint a representative to assist them with an appeal.  Beneficiaries also may seek assistance through the Office of the  Medicare Beneficiary Ombudsman, which is responsible for resolving  inquiries and complaints for all aspects of the Medicare program, through  the 1-800-MEDICARE help line.
States can structure their Medicaid appeals processes within the  parameters of federal requirements. Medicaid FFS beneficiaries must  have access to a fair hearing before a state agency for certain actions,  including when benefits are terminated, suspended, or reduced. Once a  final agency decision is made, Medicaid FFS beneficiaries may request a  judicial review of the decision if permitted under state law. Beneficiaries in  Medicaid managed care plans must have the ability to appeal a  termination, suspension, or reduction of a benefit to the plan as well as  have access to a state fair hearing. States determine whether  beneficiaries must first exhaust their appeal to their Medicaid managed  care plans before they may request a state fair hearing. During these  appeals, benefits generally must continue in certain circumstances.  Benefits generally must continue until a final agency decision is made if  the beneficiary is mailed a notice of action and files an appeal before the  date of the action. As in Medicare, neither federal regulations nor law  require that beneficiaries in Medicaid FFS have access to personal  assistance in navigating the appeals process. States, however, have the  option of providing this assistance to FFS beneficiaries. For  beneficiaries in Medicaid managed care, plans must give beneficiaries  assistance with completing appeal forms and taking other procedural  steps, including providing interpreter services and toll-free numbers for  assistance.
The appeals processes in the states that we reviewed varied, for instance  as to whether a beneficiary in managed care has to appeal to his or her  managed care plan first. For example, Arizona requires beneficiaries to  first appeal to their managed care plan before requesting a state fair  hearing. In contrast, Minnesota allows beneficiaries to request a state fair  hearing without first appealing to their managed care plan. Dual-eligible  beneficiaries in Minnesota may also request help from the state  ombudsman, and county boards are required to designate a coordinator  to assist the state Medicaid agency, including coordinating appeals with  the ombudsman.
See appendix II for a more detailed summary of these consumer  protection requirements across programs, payment systems, and  selected states.

	CMS and States Used a Range of Actions to Help Ensure Organizations Comply with Medicare and Medicaid Consumer Protection Requirements

CMS and states used compliance and enforcement actions that ranged  from informal written notices to contract terminations in order to help  ensure MA organizations and Medicaid managed care plans complied  with consumer protection requirements.

		CMS Took Compliance and Enforcement Actions against Medicare Advantage Organizations

CMS used both compliance and enforcement actions to bring  noncompliant MA organizations into compliance with federal  requirements. Compliance actions are intended to prompt managed care  organizations to address issues of noncompliance, such as the timing of  disenrollments, whereas enforcement actions impose a penalty on a  managed care organization and are taken to address more significant  violations. According to CMS, the nature of each violation is considered  when determining the appropriate compliance or enforcement action and  the actions generally proceed through the process in a step-by-step  manner before enforcement actions are taken.
CMS takes compliance actions against MA organizations to address  violations that are identified during the agency’s monitoring and auditing  activities. According to agency guidance, compliance actions are  appropriate when the MA organization: (1) demonstrates sustained poor  performance over a period of time; (2) has a noncompliance issue that  involves a large number of beneficiaries; or (3) does not meet its  contractual requirements. The lowest-level compliance action is a notice  of noncompliance, which may be an e-mail from a CMS contract manager  to a managed care plan stating that an aspect of the program is out of  compliance. The notice of noncompliance requests the plan respond with  how it will address the problem and may be followed by a warning letter  from CMS that identifies a limited and quickly fixable issue of  noncompliance that requires immediate remedy. If CMS determines that  the noncompliance affects multiple beneficiaries and represents an  ongoing or systemic inability by the plan to adhere to Medicare  requirements, CMS will send a formal letter to the MA’s chief executive  officer stating the concern and requiring the organization to develop and  implement a corrective action plan (CAP). The CAP must address the  deficiencies identified by CMS, provide an attainable time frame for  implementing corrective actions, and devise a process for the managed  care organization to validate and monitor that the corrective actions were  taken and remain effective.
Between January 1, 2010, and June 30, 2012, CMS took 546 compliance  actions generally related to consumer protection requirements of  importance to dual-eligible beneficiaries. (See table 1.) These issues of  noncompliance that could potentially affect dual-eligible beneficiaries  were identified during CMS’s ongoing oversight activities, analysis of plan  deliverables, and complaints made by beneficiaries or providers. Of these  546 actions, 386, or 70 percent, were due to marketing issues.sent notice of noncompliance or warning letters for marketing issues  related to misrepresentation of requirements for enrollment and use of  unapproved marketing materials.
CMS  The three states we reviewed used similar sequences of actions to  identify and address issues of noncompliance by their Medicaid managed  care plans. State officials reported that when noncompliance issues are  suspected they first notify the plans and give them an opportunity to  remedy the problem. Subsequent deficiencies may require a Medicaid  managed care plan to initiate a corrective action plan that the state would  monitor to assure the appropriate changes are made. Between January 1,  2010, and June 30, 2012, the three states reported they took a total of  157 compliance actions against their Medicaid managed care plans.  These actions ranged from sending warning letters, issuing notices to  cure, requiring CAPs, and imposing financial penalties.common action taken by the states was to require a managed care plan  to implement a CAP.
The reasons that states required Medicaid managed care plans to  institute CAPs during the reporting period varied. California and  Minnesota identified noncompliance with the appeals and grievance  process that required corrective actions.take corrective actions to ensure beneficiaries were able to access  appropriate translation services. The majority of the CAPs required by  Minnesota’s Medicaid office dealt with plan management of beneficiary  appeals and grievances. Arizona required CAPs to address the use of  unapproved marketing materials. After appeals, the next most frequent  reason states requested CAPs on consumer protection requirements was  to address problems regarding beneficiaries’ access to providers,  services, or drugs. Figure 2 illustrates the reasons why Medicaid  managed care plans were required to implement a CAP for the 91 CAPs  issued during the period.

	Agency Comments

We received written comments on a draft of this report from the  Department of Health and Human Services, which are reprinted in  appendix III, and technical comments, which we incorporated as  appropriate. The department noted that the report was an accurate  assessment of the programs we reviewed, and added that the Medicare- Medicaid Coordination Office has already made some progress aligning  the requirements between the two programs in the area of appeals. CMS  has developed a revised Notice of Medicare Denial of Coverage (or  Payment) that includes optional language to be used in cases where a  Medicare health plan enrollee also receives full Medicaid benefits that are  being managed by the Medicare health plan. The revised Notice of  Medicare Denial of Coverage (or Payment) is under review as part of the  approval process.
We will send copies of this report to the Administrator of CMS and  interested congressional committees. We will also make copies available  at no charge on GAO’s website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or KingK@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IV.

Appendix I: Information on Selected States’ Medicaid Programs

	Arizona

In Arizona’s Medicaid program, called the Arizona Health Care Cost  Containment System, nearly all Medicaid beneficiaries, including dual- eligible beneficiaries, are enrolled in the acute care managed care  program for Medicaid benefits. Individuals requiring long-term supports  and services are enrolled in a separate long-term care managed care  program. Both managed care programs operate under a section 1115  demonstration waiver. As of January 2012, Arizona had about 110,000  dual-eligible beneficiaries enrolled in Medicaid managed care, and over  1.3 million total Medicaid beneficiaries.

	California

California’s Medicaid system, called Medi-Cal, includes 28 counties with  only a fee-for-service (FFS) system and 30 counties with one of three  different managed care programs. Of the managed care options, the first  is a county-operated health system, which requires nearly all Medicaid  beneficiaries in participating counties, including dual-eligible beneficiaries,  to enroll in a plan operated by the county. The second is the Two-Plan  model, which has a commercial plan and a Local Initiative Health Plan—a  public agency that is independent of the county. In the third program,  called Geographic Managed Care, several commercial plans are offered  as choice for beneficiaries. In both the Two-Plan and Geographic  Managed Care programs, most Medicaid beneficiaries in the county are  mandatorily enrolled in a managed care plan, but dual-eligible  beneficiaries are in FFS unless they enroll voluntarily into one of the  health plans. California officials reported that, as of June 2012, 26 percent  of California’s approximately 1 million dual-eligible beneficiaries are  enrolled in managed care, while the remaining 74 percent of dual-eligible  beneficiaries are in FFS.

	Minnesota

In Minnesota, dual-eligible beneficiaries who are 65 years old and older  are required to enroll in a managed care program called Minnesota  Senior Care Plus (MSC+). As of June 2012, about 10,500 dually eligible  beneficiaries 65 and older in Minnesota are enrolled in MSC+.  Alternatively, dual-eligible beneficiaries 65 and older may choose to enroll  in the Minnesota Senior Health Options (MSHO) program. Unlike MSC+  plans, MSHO plans are Medicare special needs plans that also have  contracts with the state for the Medicaid benefits package, which enables  the plans to integrate Medicare and Medicaid financing and services for  dual-eligible beneficiaries. About 35,700 dually eligible beneficiaries 65  and older in Minnesota are enrolled in a MSHO plan. Dual-eligible  beneficiaries age 18 to 64 who have a disability are enrolled in the state’s  Special Needs Basic Care managed care program if they do not opt into  Medicaid FFS. As of July 2012, about 39,000 of the state’s disabled  population (both dual-eligible beneficiaries and non-dual-eligible  beneficiaries) are enrolled in Special Needs Basic Care. More than  21,000 of these disabled beneficiaries were dual-eligible beneficiaries.  According to Minnesota Medicaid officials, as of June 2012, almost   14 percent, or about 114,500, of Minnesota’s Medicaid population are  dual-eligible beneficiaries, and 59 percent of the state’s dual-eligible  beneficiaries are enrolled in managed care.

	North Carolina

According to North Carolina Medicaid officials, North Carolina primarily  operates its Medicaid program through a primary care case management  (PCCM) program, called Carolina Access. Under the PCCM program,  primary care providers are paid on a FFS basis, in addition to receiving a  monthly fee for certain care coordination activities. The state’s enhanced  PCCM program, called Community Care of North Carolina, includes   14 networks of primary care providers that are responsible for an  enhanced set of care coordination activities. According to North Carolina  Medicaid officials, dual-eligible beneficiaries are assigned a primary care  provider in one of the 14 networks, but they may opt out of the program if  they choose a healthcare provider outside of the state’s Medicaid  program. As of June 2012, according to state officials, about 13 percent  of the state’s Medicaid population was dually eligible for Medicare and  Medicaid and almost 68 percent of dual-eligible beneficiaries in the state  were enrolled in the state’s PCCM program.

Appendix II: Description of Selected Federal and State Requirements

Table 3 describes selected consumer protection requirements for  Medicare and Medicaid fee-for-service (FFS), and table 4 describes  selected consumer protection requirements for Medicare Advantage (MA)  and Medicaid managed care.

Appendix III: Comments from the Department of Health and Human Services

Appendix IV: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Randy DiRosa (Assistant  Director), Lori Achman, Anne Hopewell, Lisa Motley, Laurie Pachter,  Pauline Seretakis, Lillian Shields, and Hemi Tewarson made key  contributions to this report.

Summary:
Why GAO Did This Study

Dual-eligible beneficiaries are low-income seniors and individuals with disabilities enrolled in Medicare and Medicaid. In 2010, there were about 9.9 million dual-eligible beneficiaries. Both programs have requirements to protect the rights of beneficiaries. These requirements are particularly important to dual-eligible beneficiaries, who must navigate the rules of both programs and generally have poorer health status.
To help inform efforts to better integrate the financing and care for dual-eligible beneficiaries, GAO (1) compared selected consumer protection requirements within Medicare FFS and Medicare Advantage, and Medicaid FFS and managed care, and (2) described related compliance and enforcement actions taken by CMS and selected states against managed care plans.
GAO identified consumer protections of particular importance to dual-eligible beneficiaries on the basis of expert interviews and literature, including protections related to enrollment, provider networks, and appeals. GAO reviewed relevant federal and state statutes, regulations, and policy statements, and interviewed officials from CMS and four states selected on the basis of their share of dual-eligible beneficiaries and use of managed care (Arizona, California, Minnesota, and North Carolina). GAO analyzed data on compliance and enforcement actions in Medicare Advantage and Medicaid managed care from January 1, 2010, through June 30, 2012.

What GAO Found

Medicare and Medicaid consumer protection requirements vary across programs, payment systems--either fee-for-service (FFS) or managed care--and states. Within Medicare, enrollment in managed care through the Medicare Advantage (MA) program must always be voluntary, whereas state Medicaid programs can require enrollment in managed care in certain situations. For example, Arizona requires nearly all beneficiaries, including dual-eligible beneficiaries, to enroll in managed care, but in North Carolina all beneficiaries are in FFS. In addition, Medicare and state Medicaid programs require managed care plans to meet certain provider network requirements to ensure beneficiaries have adequate access to covered services. For example, MA plans in rural counties must have at least one primary care provider per 1,000 beneficiaries. Subject to federal parameters, states establish network requirements for their Medicaid programs. For example, in California every plan must have at least one primary care provider per 2,000 beneficiaries. Finally, Medicare and Medicaid also have different appeals processes that do not align with each other. The Medicare appeals process has up to five levels of review for decisions to deny, reduce, or terminate services, with certain differences between FFS and MA. In Medicaid, states can structure appeals processes within federal parameters. States must establish a Medicaid appeals process that provides access to a state fair hearing and Medicaid managed care plans must provide beneficiaries with the right to appeal to the plan, though states can determine the sequence of these appeals. For example, Arizona requires beneficiaries to appeal to the managed care plan first, while a beneficiary in Minnesota may go directly to a state fair hearing without an initial appeal to the managed care plan.
Both the Centers for Medicare & Medicaid Services (CMS), the agency that administers the Medicare program and oversees states' operation of Medicaid programs, and states took a range of compliance and enforcement actions to help ensure that MA and Medicaid managed care organizations complied with their consumer protection requirements. Between January 1, 2010, and June 30, 2012, CMS took 546 compliance actions against MA organizations on the issues GAO identified as generally related to consumer protections of particular importance to dual-eligible beneficiaries. Compliance actions included notices, warning letters, and requests for corrective action plans (CAP). During the same period, CMS took 22 enforcement actions against MA organizations, including the imposition of 17 civil money penalties--nearly all for late or inaccurate marketing materials. For five serious violations, CMS suspended enrollment into the MA plan and suspended the MA plan's ability to market to beneficiaries. Similarly, states used notices, letters, fines, and CAPs to improve Medicaid managed care plan compliance with Medicaid consumer protection requirements. During the same period, Arizona, California, and Minnesota required managed care plans to undertake 91 corrective action plans, 52 percent of which related to problems with plans' appeals and grievances processes.
In commenting on a draft of the report, the Department of Health and Human Services noted that the report was an accurate assessment of the programs we reviewed.