Accessible Version

MEDICARE AND 

MEDICAID

Additional Oversight 

Needed of CMS’s 

Demonstration to 

Coordinate the Care 

of Dual-Eligible 

Beneficiaries

Report to Congressional Requesters

December 2015

GAO-16-31

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-31, a report to 

congressional requesters

December 2015

MEDICARE AND MEDICAID

Additional Oversight Needed of CMS’s Demonstration 

to Coordinate the Care of Dual-Eligible Beneficiaries 

Why GAO Did This Study

The Medicare and Medicaid programs 

spent an estimated $300 billion on 

dual-eligible beneficiaries—those 

individuals who qualify for both 

programs—in 2010. These 

beneficiaries often have complex 

health needs, increasing the need for 

care coordination across the two 

programs. In 2013, CMS began the 

Financial Alignment Demonstration, 

with the goal of integrating Medicare 

and Medicaid services and financing 

and improving care coordination. 

Thirteen states are participating.

GAO was asked to examine care 

coordination under the demonstration. 

GAO examined (1) how integrated care 

organizations—which are health plans 

or other entities—are implementing 

care coordination and (2) what, if any, 

challenges organizations have 

encountered in implementing care 

coordination and the extent to which 

CMS oversees these care coordination 

activities. GAO interviewed officials 

from CMS and, during site visits to a 

nongeneralizable sample of the first 

five states to implement the 

demonstration, interviewed state 

officials, organizations, advocacy 

groups, and providers. GAO also 

reviewed CMS guidance outlining 

CMS’s oversight role and the 

measures it uses to monitor the 

demonstration. 

What GAO Recommends

GAO recommends that CMS develop 

new comparable measures and align 

existing measures to strengthen 

oversight of care coordination. HHS 

proposed actions that it plans to take in 

response to GAO’s recommendations, 

as discussed in the report.

What GAO Found

Due to the flexibility that states have in designing their Financial Alignment 

Demonstrations, the integrated care organizations that GAO interviewed in 

California, Illinois, Massachusetts, Virginia, and Washington implemented care 

coordination for dual-eligible Medicare and Medicaid beneficiaries in a variety of 

ways. For example, these organizations assigned care coordinators to 

beneficiaries using different approaches, such as assigning them by geographic 

proximity to the beneficiary or to the beneficiary’s primary care provider. Care 

coordinators also used a range of interactions with beneficiaries in order to

coordinate care, including by mail, e-mail, telephone, or in person. 

The organizations GAO interviewed described facing challenges that affected 

their ability to coordinate care, such as difficulties in locating beneficiaries. 

Specifically, organizations noted that certain characteristics of dual-eligible 

beneficiaries, such as high levels of transience, can make it challenging to 

coordinate their care—one of the key goals of the demonstration. GAO’s 

interviews with beneficiary advocacy groups and providers raised questions 

about the extent to which care coordination is actually occurring. 

The Centers for Medicare & Medicaid Services (CMS), an agency within the 

Department of Health and Human Services (HHS), collects information that 

assesses the extent to which care coordination is occurring, but not all of this 

information is comparable across the states. To inform its oversight, CMS has 

established a framework of monitoring activities, and one key component of this 

oversight is the monitoring of core and state-specific measures for each of the 

two demonstration models that states can implement: (1) the capitated model, 

where organizations receive a capitated payment to provide integrated care, and 

(2) the managed fee-for-service (MFFS) model, where states are eligible for 

retroactive savings resulting from initiatives to integrate care with existing fee-forservice providers. CMS collects different sets of core measures from the 

capitated and MFFS model states. Two out of 10 core measures in the capitated

model provide information on the extent to which care coordination is occurring, 

while no core measures in the MFFS model examine this area. The states in our 

review had state-specific measures that explored aspects of care coordination, 

but they were not comparable across the states or both demonstration models. In 

addition, CMS added comparable, demonstration-specific questions to the 

Consumer Assessment of Healthcare Providers and Systems, a survey that CMS 

requires all organizations for the capitated model, and states for the MFFS 

model, to complete annually. While the results of the surveys are still 

forthcoming, information from these questions may be able to provide CMS with 

important information about whether beneficiaries are meeting with their care 

coordinators across both models. Federal internal control standards state that 

monitoring should be designed to help an agency accomplish its goals. Because 

not all of the information that CMS collects to examine the extent to which care 

coordination is occurring is comparable, CMS does not fully know whether it has 

achieved its goal of providing coordinated care to dual-eligible beneficiaries. 

Establishing additional measures that would allow CMS to obtain these data 

could help it better understand the reasons why care coordination is or is not 

occurring and thus help the agency to strengthen the demonstration.

View GAO-16-31. For more information, 

contact Kathleen M. King at (202) 512-7114 or 

kingk@gao.gov.
Letter 1

Page i GAO-16-31 Dual-Eligible Demonstration 

Background 5

Organizations Participating in CMS’s Financial Alignment 

Demonstration Implemented Care Coordination in a Variety of Ways 13

Organizations Described Challenges in Coordinating Care, and 

the Extent to Which Care Coordination Occurs in the 

Demonstration Is Not Fully Known 17

Conclusions 30

Recommendations for Executive Action 31

Agency Comments and Our Evaluation 32

Appendix I: Centers for Medicare & Medicaid Services’ (CMS) State-Specific Measures for the Financial 

Alignment Demonstration, by State 35

Appendix II: Comments from the Department of Health and Human Services 40

Appendix III: GAO Contact and Staff Acknowledgments 44

GAO Contact 44

Staff Acknowledgments 44

Appendix IV: Accessible Data 45

Agency Comment Letter 45

Data Tables 50

Tables

Table 1: Required Care Coordination Components for the Centers for 

Medicare & Medicaid Services’ (CMS) Financial Alignment 

Demonstration for Dual-Eligible Beneficiaries 12

Table 2: Core Measures for Capitated and Managed Fee-for-Service 

(MFFS) Models Required by the Centers for Medicare & 

Medicaid Services’ (CMS) Financial Alignment Demonstration 

for Dual-Eligible Beneficiaries 23

Data Table for Figure 1: Dual-Eligible Beneficiaries as a Share of 

Medicare and Medicaid Enrollment and Spending, Calendar 

Year 2010 50

Contents
Figures

Page ii GAO-16-31 Dual-Eligible Demonstration 

Figure 1: Dual-Eligible Beneficiaries as a Share of Medicare and 

Medicaid Enrollment and Spending, Calendar Year 2010 6

Figure 2: Status of the Centers for Medicare & Medicaid Services’ 

(CMS) Financial Alignment Demonstration for Dual-Eligible 

Beneficiaries, as of September 2015 11

Abbreviations

CAHPS Consumer Assessment of Healthcare Providers and 

Systems

CMS Centers for Medicare & Medicaid Services

CMT contract management team

D-SNP dual-eligible special needs plans

EDCD Elderly or Disabled with Consumer Direction

HEDIS Healthcare Effectiveness Data and Information Set

HHS Department of Health and Human Services

HOS Health Outcomes Survey

ICP individualized care plan

This is a work of the U.S. government and is not subject to copyright protection in the 

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ICT interdisciplinary care team

MACPAC Medicaid and Children’s Health Insurance Program 

Payment and Access Commission 

MFFS managed fee-for-service

SNP special needs plans

Page iii GAO-16-31 Dual-Eligible Demonstration 
Page 1 GAO-16-31 Dual-Eligible Demonstration 

441 G St. N.W.

Washington, DC 20548

December 18, 2015

Congressional Requesters

About 10 million of Medicare’s approximately 50 million beneficiaries are 

also eligible for Medicaid, a joint federal-state program that finances 

health insurance coverage for certain categories of low-income or 

disabled people.1 Dual-eligible beneficiaries accounted for less than one-fourth 

of each program’s population but over one-third of each program’s spending—

more than $300 billion—in 2010, the most recent year available.2 Dual-eligible 

beneficiaries are often in poorer health and require more care compared 

with other Medicare and Medicaid beneficiaries. They typically receive 

their benefits through each program separately, which can lead to 

fragmented care because the programs have different rules for provider 

reimbursement and benefits and may have conflicting financial incentives. 

For example, incentives may exist for providers to shift beneficiaries from 

one type of service to another to increase their payments. These types of 

program misalignments can result in unnecessary hospitalizations, which 

can reduce quality of care and increase costs. Recently, the federal 

government, states, researchers, and advocates have focused increased 

attention on care coordination for dual-eligible beneficiaries as a key 

strategy for improving the quality of care while simultaneously reducing 

costs.3

 

1Medicare is the federally financed health insurance program for persons 65 years of age or over, 

certain individuals with disabilities, and individuals with end-stage renal disease. Medicare fee-forservice includes Medicare Parts A and B. Medicare Part A covers hospital and other inpatient 

stays. Medicare Part B is optional insurance, which covers hospital outpatient, physician, 

and other services and requires a monthly premium. Medicare Part B beneficiaries have 

the option of enrolling in a Medicare Advantage plan—a private plan alternative to 

Medicare fee-for-service that operates under Medicare Part C—to receive their Parts A 

and B benefits. In addition, all Medicare beneficiaries may opt to receive prescription drug 

coverage under Medicare Part D either through a separate Part D plan or through a 

Medicare Advantage plan. 

2Medicare Payment Advisory Commission and Medicaid and Children’s Health Insurance Program 

Payment and Access Commission, Data Book: Beneficiaries Dually Eligible for Medicare and 

Medicaid (Washington, D.C.: January 2015). 

3Care coordination is the process of integrating all medical, behavioral health, and long-term 

services and supports to ensure the proper providers and services are in place to meet the 

beneficiaries’ needs. 

Letter
Specifically, beginning in 2013, the Department of Health and Human Services’

(HHS) Centers for Medicare & Medicaid Services (CMS) began implementing 

the Financial Alignment Demonstration through its Medicare-Medicaid 

Coordination Office, which will integrate Medicare and Medicaid services 

and financing and improve care coordination for dual-eligible 

beneficiaries.

Page 2 GAO-16-31 Dual-Eligible Demonstration 

4 Ultimately, CMS believes the Financial Alignment 

Demonstration will reduce spending and improve the quality of care for 

dual-eligible beneficiaries. The demonstration allows states, through 

contracted integrated care organizations, to test models of care that 

emphasize care coordination, including care coordinators, health risk 

assessments, individualized care plans (ICP), and interdisciplinary care 

teams (ICT).5 CMS is required by law to evaluate the quality of care furnished 

under these models. In addition, the Secretary of Health and Human Services 

may, through rulemaking, expand the duration and scope of a model 

under specified conditions. As of August 2015, CMS had approved 13 

states to participate in the 3-year demonstration, and the agency 

estimates that approximately 441,000 beneficiaries are enrolled.6

You asked us to examine care coordination under CMS’s Financial Alignment 

Demonstration. Specifically, we examined

1. how integrated care organizations are implementing care coordination for 

beneficiaries in the Financial Alignment Demonstration and

2. what, if any, challenges the organizations have encountered in 

implementing care coordination and the extent to which CMS 

oversees these care coordination activities.

 

4The Financial Alignment Demonstration is also sometimes referred to as the Financial Alignment 

Initiative.

5

For this report, integrated care organizations—which we refer to as organizations—include health 

plans or other qualified entities participating in the Financial Alignment Demonstration. In 

addition, for this report, a care coordinator is the person responsible for facilitating the 

coordination of services for the beneficiary. A health risk assessment examines a 

beneficiary’s needs. The ICP is a plan of care that includes the beneficiary’s goals and 

strategies toward meeting those goals. The ICT is a team of providers, including the care 

coordinator, that works closely with the beneficiary to implement and maintain his or her 

ICP. 

6

In July 2015, CMS gave states the option to extend their demonstrations for an additional 

2 years. 
To describe how integrated care organizations are implementing care 

coordination for beneficiaries in the Financial Alignment Demonstration, 

we reviewed CMS guidance. We also selected a nongeneralizable 

sample of five states—California, Illinois, Massachusetts, Virginia, and 

Washington—and examined their demonstration planning documents. We 

selected these states because they were the first five states to begin 

enrolling beneficiaries on or before September 1, 2014.

Page 3 GAO-16-31 Dual-Eligible Demonstration 

7 Because the 

demonstration parameters are complex and involve many requirements, we 

focused our review on the four care coordination requirements for the 

demonstration, which are specified in CMS and state guidance: (1) a care 

coordinator, (2) a health risk assessment, (3) an ICP, and (4) an ICT. We 

also interviewed officials from CMS’s Medicare-Medicaid Coordination 

Office about the care coordination requirements in CMS guidance and 

how these requirements were being implemented by states involved in 

the demonstration. We conducted site visits to each state and interviewed 

state agency officials; officials from the CMS regional office; staff at 

integrated care organizations, including care coordinators; staff from 

beneficiary advocacy groups; and primary care providers. We selected 11 

integrated care organizations to interview within the five states8(2 in 

Illinois, Massachusetts, Virginia, and Washington, and 3 in California) by 

identifying organizations that had the highest level of enrollment in the 

demonstration as of August 2014 (except for Washington, where we used 

 

7Of the five states we selected, the state with the earliest implementation date started enrollment in 

July 2013 and the state with the latest implementation date started enrollment in July 2014. 

8One of the organizations we interviewed in Massachusetts dropped out of the demonstration early, 

on September 30, 2015, noting that its participation was not economically sustainable. In addition, 

while Washington’s 3-year demonstration was initially planned to end after December 31, 

2016, the approved 2015-2017 Washington state budget did not authorize any funding for 

the demonstration after December 31, 2015. However, as of November 2015, the state of 

Washington decided to continue participating in the demonstration until at least June 

2016. 
enrollment data as of February 2015).

Page 4 GAO-16-31 Dual-Eligible Demonstration 

9 At most of the organizations in our 

review, we also observed ICT meetings conducted by organization staff. 

To obtain the perspective of beneficiaries, we asked officials from the five 

states to identify one beneficiary advocacy group that was a stakeholder 

in developing each state’s demonstration, and we interviewed staff at that 

group. In addition, we spoke with seven primary care providers located in 

California, Illinois, and Massachusetts about their experiences with the 

demonstration.10 We developed structured interview protocols to gather 

consistent information from CMS, the states, integrated care 

organizations, beneficiary advocacy groups, and primary care providers 

about their perspectives in implementing care coordination in the 

demonstration. Our findings are limited to the five states in our review and 

are not representative of all states and integrated care organizations 

participating in the Financial Alignment Demonstration.

To determine what, if any, challenges the organizations have 

encountered in implementing care coordination and the extent to which 

CMS oversees these care coordination activities, we interviewed staff at 

integrated care organizations located in the five states in our review about 

challenges they have encountered. We also interviewed CMS officials 

from the Medicare-Medicaid Coordination Office about the agency’s 

oversight and monitoring of selected states’ demonstrations. In addition, 

we reviewed CMS guidance about the agency’s role and responsibility for 

demonstration oversight, as well as CMS guidance describing the 

 

9Unlike the other state demonstrations in our review, after beneficiaries in Washington are 

automatically enrolled in the state’s demonstration, care coordination services are not provided 

unless an enrollee elects to receive them. If an enrollee elects to receive services, 

Washington’s demonstration considers the beneficiary to be “engaged.” Since the 

enrollment numbers reported by the organizations in Washington only reflected the total 

number of beneficiaries enrolled and not the number of engaged beneficiaries who were 

actually receiving services, we also examined the total number of engaged beneficiaries to 

inform our selection of organizations in that state. We found that the two organizations 

with the highest number of enrollees as of February 2015 also had the highest number of 

engaged enrollees. In the other state demonstrations in our review, care coordination 

services were included among the services provided under the demonstration upon a 

beneficiary’s effective enrollment date. 

10The staff we interviewed at organizations in California, Illinois, Massachusetts, and Virginia 

gave us a list of primary care providers in their respective networks that cared for enrollees in the 

demonstration. We contacted several providers in each state—18 in all. Of these, 7 

responded to our requests for an interview. We did not contact providers in Washington 

because, unlike the other state demonstrations in our review, the providers in 

Washington’s demonstration provide care to beneficiaries on a fee-for-service basis 

through existing Medicare and Medicaid service delivery systems. 
measures that CMS regularly requires organizations and states to report 

as part of the agency’s monitoring. We determined whether these 

measures assessed the extent to which care coordination is occurring in 

the demonstration—that is, whether care coordinators are meeting with 

beneficiaries, health risk assessments are being completed, ICPs are 

being developed, and ICT meetings are occurring. We compared these 

oversight activities to CMS’s goals for the demonstration and the 

standards described in Standards for Internal Control in the Federal 

Government.

Page 5 GAO-16-31 Dual-Eligible Demonstration 

11 We did not evaluate whether the demonstration had achieved 

cost savings or improved the quality of care.

We conducted this performance audit from June 2013 to December 2015 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives.

Dual-eligible beneficiaries are a particularly vulnerable group. In general, 

these individuals are among the poorest and sickest beneficiaries 

enrolled in Medicare and Medicaid. For example, compared to other 

Medicare beneficiaries, they are more likely to be disabled; report poor 

health status and limitations in their activities of daily living, such as 

bathing and toileting; and have cognitive impairments, mental disorders, 

and certain chronic conditions, such as diabetes and pulmonary disease. 

Therefore, dual-eligible beneficiaries tend to have higher rates of service 

use and consequently, higher spending, compared to other Medicare and 

Medicaid beneficiaries. (See fig. 1.)

 

11GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

Background

Characteristics of DualEligible Beneficiaries
Figure 1: Dual-Eligible Beneficiaries as a Share of Medicare and Medicaid 

Page 6 GAO-16-31 Dual-Eligible Demonstration 

Enrollment and Spending, Calendar Year 2010

Although dual-eligible beneficiaries have a higher rate of service use 

compared to other Medicare and Medicaid beneficiaries, as a group, they 

vary in terms of their need for health care services, reflecting differences 

in the prevalence of disabilities and other health conditions. Under 

Medicare, dual-eligible beneficiaries have coverage for most acute care 

services, such as care provided by physicians or inpatient hospitals, postacute skilled nursing facility care, and prescription drugs. Under state 

Medicaid programs, dual-eligible beneficiaries also have coverage for 

long-term nursing facility care and home and community-based services. 

These beneficiaries may also qualify for payment of Medicare premiums 

and cost sharing. Medicaid is the health care payer of last resort, 

meaning that Medicare pays to the extent of its liability before Medicaid 

makes any payments. Because dual-eligible beneficiaries receive care 

through separate programs with different benefits and payment 

processes, they are likely to be treated by many different health care 

providers that may not coordinate their care, which can lead to increased 

costs and poorer patient outcomes.
Prior to the implementation of the Financial Alignment Demonstration in 

2013, the Medicare and Medicaid programs were separately responsible 

for covering certain services for most dual-eligible beneficiaries, and there 

may not have been an incentive for one program to help control costs in 

the other program. As we previously reported, any savings that were 

achieved often resulted from services that were largely paid for by 

Medicare, such as reductions in the number and length of hospital stays, 

and therefore accrued to the Medicare program.

Page 7 GAO-16-31 Dual-Eligible Demonstration 

12 Therefore, state Medicaid 

programs did not have an incentive to better coordinate care or reduce 

spending since they did not benefit from any savings that were achieved. 

However, increasingly there have been efforts to try to improve 

integration of care between these two programs. For example, one 

specific effort to integrate care for dual-eligible beneficiaries was the 

establishment of dual-eligible special needs plans (D-SNP) in 2003.13 DSNPs are a type of Medicare Advantage plan exclusively for dual-eligible 

beneficiaries that provide specialized services targeted to the needs of their 

beneficiaries, including a health risk assessment and an ICT for each 

enrolled beneficiary. About 1.9 million of the dual-eligible population was 

enrolled in D-SNPs in 2014.14

CMS’s goal for the Financial Alignment Demonstration is to integrate 

Medicare and Medicaid services and financing and improve care 

coordination for beneficiaries, therefore resulting in improved care and 

 

12See GAO, Medicare Special Needs Plans: CMS Should Improve Information Available about 

Dual-Eligible Plans’ Performance, GAO-12-864 (Washington, D.C.: Sept. 13, 2012).

13Special needs plans (SNP), including D-SNPs, have been reauthorized several times since their 

establishment was first authorized in 2003. Dual-eligible beneficiaries may also choose to enroll in 

other types of SNPs for which they are eligible, including institutional SNPs for individuals 

residing in nursing facilities or institutions, and chronic condition SNPs for individuals with 

severe or disabling chronic conditions. 

14See GAO-12-864. 

Past Initiatives to 

Coordinate Care for DualEligible Beneficiaries

Financial Alignment 

Demonstration: Design and 

Implementation, Care 

Coordination, and Sources 

of Potential Savings

Design and Implementation of 

the Demonstration
savings to Medicare and Medicaid. CMS gave the states flexibility in 

designing their demonstrations because of the different needs of their 

target populations, the geographic coverage areas, and the number of 

eligible beneficiaries. For example, while Massachusetts chose to limit its 

target population to dual-eligible beneficiaries from age 21 through 64, 

California, Illinois, and Virginia chose to include all dual-eligible 

beneficiaries aged 21 and older as their target populations. CMS required 

states to involve dual-eligible beneficiaries and other stakeholders, such 

as beneficiary advocacy groups, in the development of their 

demonstrations to help design a person-centered system of care.

Before any state’s demonstration becomes operational, CMS oversees a 

multistep approval process of the state’s demonstration design. First, 

states interested in participating in the demonstration submit proposals to 

CMS that provide a description of the demonstration’s design. CMS then 

reviews the proposals and works with the states to develop a 

memorandum of understanding that further outlines the parameters of the 

demonstration, which both the state and CMS sign.

As part of their proposals, states generally opted to test one of two 

models—the capitated or managed fee-for-service (MFFS) models.

Page 8 GAO-16-31 Dual-Eligible Demonstration 

15

Under the demonstration’s capitated model, following CMS approval of the 

memorandum of understanding, the states work with CMS to select qualified 

integrated care organizations to participate in the demonstration. Then, the 

state, CMS, and an integrated care organization enter into a three-way 

contract, and the integrated care organization receives a prospective 

blended capitated payment, which includes both Medicare and Medicaid 

payments, to provide coordinated care across both programs. CMS 

reduces payment rates to organizations up front each year based on a 

predetermined Medicare and Medicaid savings estimate, with the amount 

of savings increasing each year, typically from 1 percent in the first year 

to 4 percent in the third year of the demonstration. For example, in 

Massachusetts, contracted managed care health plans provide care 

coordination services and integrate care between the two programs and 

receive one combined payment from both Medicare and Medicaid for 

 

15Four of the five states in our review—California, Illinois, Massachusetts, and Virginia—are 

implementing a capitated model that will rely on qualified organizations, such as health plans, to 

provide integrated care to dual-eligible beneficiaries under the demonstration. The remaining 

state—Washington—is implementing an MFFS model that will rely on health homes, 

which are the organizations responsible for integrating care under the demonstration.
each enrollee. For states opting for the MFFS model, following CMS 

approval of the memorandum of understanding, the state and CMS enter 

into an agreement by which providers continue to receive fee-for-service 

reimbursement for both Medicare and Medicaid services. The state is 

then eligible for a portion of any retroactive savings resulting from state 

initiatives designed to improve quality and reduce spending for dualeligible beneficiaries. One state, Washington, is using Medicaid health 

home agencies to coordinate Medicare and Medicaid services among 

existing fee-for-service providers for dual-eligible beneficiaries.

The organizations in the capitated model, and the states in the MFFS 

model, then undergo a CMS review to ensure they are prepared to begin 

enrolling dual-eligible beneficiaries. Once they have passed CMS’s 

review, they can begin enrolling beneficiaries. In general, under the 

capitated model, eligible beneficiaries—those dual-eligible beneficiaries 

who meet the state’s age, geographic residency, and other requirements 

for the demonstration—can enroll voluntarily into the demonstration and 

choose a participating integrated care organization. Dual-eligible 

beneficiaries who choose not to enroll voluntarily can be assigned by the 

state Medicaid agency to a participating organization, in a process known 

as “passive enrollment.” Once a beneficiary is enrolled into the 

demonstration, the state will send the beneficiary’s contact information to 

the relevant integrated care organization. The state or CMS may also 

provide Medicaid or Medicare claims data, medical history, 

hospitalizations, and pharmacy use for the beneficiaries. The organization 

then typically assigns a care coordinator and begins coordinating the 

beneficiary’s care. In the MFFS model, beneficiaries are automatically 

enrolled in the demonstration, and following enrollment, the care 

coordinator will perform outreach to the beneficiary and give the 

beneficiary the option to elect to receive care coordination services. 

Under both models, beneficiaries can opt out of the demonstration at any 

time.

Implementation of the Financial Alignment Demonstration began in July 

2013 when the first state, Washington, began enrolling beneficiaries. 

Since then, CMS has approved 12 other state demonstrations and all but 

one of these states has begun enrolling beneficiaries. Two states—

Connecticut and New York—had proposals pending approval from CMS 

Page 9 GAO-16-31 Dual-Eligible Demonstration 
as of September 2015.

Page 10 GAO-16-31 Dual-Eligible Demonstration 

16 (See fig. 2 for a demonstration map.) The agency is 

no longer accepting new proposals from states.

 

16CMS has approved New York’s capitated demonstration model, which targets dual-eligible 

beneficiaries over the age of 21 who are receiving nursing facility or community-based 

long-term services and supports, but its second demonstration proposal, which targets 

dual-eligible beneficiaries with developmental disabilities, is pending approval from CMS. 

In addition to New York, California, Illinois, Massachusetts, Michigan, Ohio, Rhode Island, 

South Carolina, Texas, and Virginia are pursuing a capitated model. Colorado and 

Washington are pursuing an MFFS model. Minnesota is pursuing an alternative 

administrative alignment model, which will maintain its existing payment and delivery 

system arrangement but will allow organizations to integrate Medicare and Medicaid 

payments and improve coordination among different types of services. 
Figure 2: Status of the Centers for Medicare & Medicaid Services’ (CMS) Financial Alignment Demonstration for Dual-Eligible 

Page 11 GAO-16-31 Dual-Eligible Demonstration 

Beneficiaries, as of September 2015

Note: California, Illinois, Massachusetts, Michigan, New York, Ohio, Rhode Island, South Carolina, 

Texas, and Virginia are pursuing a capitated model. Colorado and Washington are pursuing a 

managed fee-for-service model. Minnesota is pursuing an alternative model.

aCMS has approved New York’s capitated demonstration model, which targets dual-eligible 

beneficiaries over age 21 who are receiving nursing facility or community-based long-term services 

and supports, but its second demonstration proposal, which targets dual-eligible beneficiaries with 

developmental disabilities, is pending approval from CMS.
One of the key goals of the demonstration is to improve care coordination 

for beneficiaries using a person-centered care delivery model based on 

the preferences and needs of the beneficiary, which CMS anticipates will 

improve the quality of care and reduce costs. CMS requires states and 

organizations participating in the demonstration to incorporate a care 

coordinator role, a health risk assessment, an ICP, and an ICT into their 

care delivery model for the demonstration. (See table 1.)

Table 1: Required Care Coordination Components for the Centers for Medicare & Medicaid Services’ (CMS) Financial 

Page 12 GAO-16-31 Dual-Eligible Demonstration 

Alignment Demonstration for Dual-Eligible Beneficiaries

Required component of care 

delivery model Component description based on the five state demonstrations in our reviewa

Care coordinator · Typically, upon enrollment, beneficiaries are contacted by their assigned care coordinator, 

who is a clinician or other trained professional employed by the organization and 

responsible for coordinating the beneficiary’s care.

· Among other responsibilities, the care coordinator is responsible for facilitating care 

coordination services, such as conducting (or participating in) the health risk assessment, 

developing the beneficiary’s individualized care plan, and leading or facilitating the

interdisciplinary care team meetings.

Health risk assessment · Once enrolled, each beneficiary is assigned to a risk category (such as low-risk, 

moderate-risk, or high-risk) based on his or her health history and needs.b

· Each beneficiary receives a health risk assessment, administered by the integrated care 

organization, to identify needs.

· The assessment tool is a screening questionnaire that can vary by state, but must assess 

a beneficiary’s different needs, such as medical, psycho-social, functional, and cognitive.

Individualized care plan (ICP) · The ICP is a plan of care required for each beneficiary, and the format can vary by state. 

It is typically developed by the care coordinator or the interdisciplinary care team in 

collaboration with the beneficiary.

· The ICP, which is usually developed following the health risk assessment, includes the 

beneficiary’s goals and strategies toward meeting those goals.

· The beneficiary’s interdisciplinary care team typically works with the beneficiary to 

implement the ICP, which is updated annually or when the beneficiary has a change in 

health status or goals.

Interdisciplinary care team (ICT) · Each beneficiary is to have access to an ICT that is built on the beneficiary’s preferences 

and needs.

· The ICT, often led by a care coordinator, is a team of providers that works with the 

beneficiary to implement and maintain his or her ICP.c

· The ICT typically consists of the primary care provider, the care coordinator, the 

beneficiary, any other relevant specialist providers, and any other members the 

beneficiary chooses to include. Beneficiary participation in ICT meetings is optional.

Source: GAO analysis of CMS guidance and state planning documents for the CMS Financial Alignment Demonstration. | GAO-16-31

Notes: For this report, integrated care organizations—which we refer to as organizations—include 

health plans or other qualified entities participating in the Financial Alignment Demonstration. The 

states in our review used different terminology for the care coordinator role, health risk assessment, 

ICP, and ICT.

a

The five states in our review were California, Illinois, Massachusetts, Virginia, and Washington.

Care Coordination under the 

Demonstration
b

In general, states categorize higher risk beneficiaries as those that have multiple health conditions 

and a higher risk of hospitalization and they categorize lower risk beneficiaries as those that have few 

or no health needs.

cWashington’s state planning documents do not indicate that the ICT works with the beneficiary to 

implement his or her ICP.

Under the demonstration, any savings will be shared equally by Medicare 

and Medicaid, regardless of whether the savings were achieved primarily 

by Medicare or Medicaid. Although CMS projects that approximately 60 to 

70 percent of savings from the demonstration will come from reductions in 

costly Medicare-covered services, such as fewer hospital admissions 

(including readmissions), and approximately 1 to 5 percent of savings will 

come from fewer emergency room visits, the agency requires that as part 

of a more integrated approach, both the Medicare and Medicaid programs 

adjust their payment rates to plans based on aggregate savings 

percentages.

Page 13 GAO-16-31 Dual-Eligible Demonstration 

17

Organizations in the five states in our review used state- and CMS-required care 

coordinators, health risk assessments, ICPs, and ICTs to coordinate care. 

Due to the flexibility states have in designing these elements in their 

demonstrations, implementation varied among the organizations in these 

five states.

Staff from organizations in our review reported different ways that they 

assigned care coordinators to beneficiaries. Some organizations assigned 

care coordinators on the basis of geographic proximity to the beneficiary 

or the beneficiary’s primary care provider. Others assigned care 

coordinators a mix of low-, moderate-, and high-risk beneficiaries, or 

assigned care coordinators based on the coordinator’s qualifications and 

areas of expertise.

 

17See Centers for Medicare & Medicaid Services, Joint Rate-Setting Process for the Capitated 

Financial Alignment Model (Baltimore, Md.: August 2013).

Sources of Potential Savings 

under the Demonstration

Organizations 

Participating in CMS’s 

Financial Alignment 

Demonstration 

Implemented Care 

Coordination in a 

Variety of Ways

Care Coordinator
Care coordinators varied in their qualifications and backgrounds, and in 

the types of care they coordinated. Organization staff said care 

coordinators had degrees or licensures in fields such as nursing, social 

work, or behavioral health. Staff from the organizations said they hired 

care coordinators with backgrounds in care management and 

assessment, and who were comfortable reaching out to and engaging 

with beneficiaries. In addition, some organizations had separate care 

coordinators assigned to handle medical needs versus behavioral health 

needs, but others had care coordinators who were responsible for 

coordinating care across medical, behavioral, and social realms.

Care coordinators for the organizations in our review reported interacting 

with beneficiaries, using a range of methods and in a variety of settings,

to conduct health risk assessments, develop ICPs, and lead ICTs. Care 

coordinators we spoke with reported interacting with beneficiaries by mail, 

e-mail, telephone, and in person, but most care coordinators said they 

interacted with beneficiaries by telephone or in person. Some care 

coordinators told us they interacted by telephone regardless of a 

beneficiary’s risk level, while others used a mix of telephone and in

person methods depending on the beneficiary’s risk level and needs. 

Some care coordinators in the latter group used in person interactions for 

higher-risk beneficiaries and telephone interactions for low-risk 

beneficiaries. Locations of the in-person visits also differed; while inperson visits were often conducted in a beneficiary’s home, care 

coordinators described meeting beneficiaries in other settings as well, 

such as parks, libraries, homeless shelters, clothing drives, and provider’s 

offices.

The organizations in the five states we reviewed differed in how they 

conducted the health risk assessment. For example, they differed in how 

they identified high- and low-risk beneficiaries, a process that typically 

occurs when the beneficiary is enrolled in the demonstration, but before 

the health risk assessment is conducted. Staff at some of these 

organizations said they confirm or adjust the initial risk category assigned 

by the state through the health risk assessment process. Conversely, 

staff at organizations in states that do not assign an initial risk category 

said they begin their health risk assessment process by identifying highand low-risk beneficiaries through an initial health screening and then 

administering the health risk assessment.

Page 14 GAO-16-31 Dual-Eligible Demonstration 

Health Risk Assessment
Additionally, based on our interviews, we found that organizations in the 

five states varied in their methods for conducting the assessment. Not all 

of these organizations used their own staff and instead contracted with a 

vendor to conduct the assessments. For the organizations conducting 

their own assessments, the staff responsible also differed depending on 

the organization. For example, some organizations had the beneficiary’s 

care coordinator conduct the assessment, while others used other types 

of staff, such as assessment coordinators.

The organizations we reviewed also used different health risk assessment 

tools. For example, the Illinois demonstration required organizations to 

use a tool that must assess the beneficiary’s medical, psycho-social, 

functional and cognitive needs, and medical and behavioral health, while 

the Massachusetts demonstration required organizations to use a tool 

that not only assesses these needs but also assesses needs related to 

housing, employment status, and food security. Staff at some of these 

organizations also said they used a supplemental assessment in addition 

to the health risk assessment to further identify the needs of their 

beneficiaries.

Based on our interviews, we found that the ICP templates varied by 

organization in the five states and therefore differed in length, complexity, 

and focus. Some organizations used ICP templates from the state and 

others developed their own templates. The ICPs varied in length, from 

shorter plans containing three to five goals to longer plans containing 

many goals. Staff who used the shorter ICPs explained they did so to 

avoid losing the beneficiary’s interest. The complexity of the ICP also 

depended on the organization. For example, staff at some organizations 

described ICPs that contained goals for the beneficiaries as well as 

strategies, timelines, and barriers to meeting those goals. Additionally, 

some organizations created ICPs with a mix of short- and long-term 

goals, while other organizations said their ICPs contained a small number 

of meaningful and achievable goals. Some organizations tailored their 

ICPs to focus on the risk level of the beneficiary, with ICPs for low-risk 

beneficiaries containing basic educational information on common health 

issues such as asthma or diabetes, while ICPs for high-risk beneficiaries 

were tailored to identify gaps in their care. Staff at one organization said 

the ICPs were not clinical plans but focused on home and communitybased services, such as referrals to transportation services.

Page 15 GAO-16-31 Dual-Eligible Demonstration 

ICP
Care coordinators said they developed the ICP with the beneficiary either 

in conjunction with the health risk assessment or after the completion of 

the health risk assessment.

Page 16 GAO-16-31 Dual-Eligible Demonstration 

18 Some care coordinators used a standard ICP 

outline auto-populated with results from the beneficiary’s health risk assessment 

as the basis for developing the ICP with the beneficiary.

We also found that implementation of the ICT process varied by 

organization in the five states. Specifically, these organizations said that 

the frequency and format of ICT meetings depended on the needs of the 

beneficiary. Some meetings took place only once, when a beneficiary first 

enrolled in the organization, while others took place on a regular basis for 

on-going health needs or only in the case of acute events such as 

hospitalizations. Additionally, staff from some organizations in our review 

said that ICT meetings do not occur for every beneficiary, particularly lowrisk beneficiaries, because their health needs may not be complex and 

thus they may not need to meet with their ICT. Staff also commented that 

communication and meetings among ICT members took place in different 

ways. For example, staff at one organization told us they consider 

conversations between the organization’s medical director and the 

beneficiary’s primary care provider to be a form of ICT communication, 

and staff at another organization said ICT meetings can take place 

between the care coordinator, the beneficiary, and the beneficiary’s 

primary care provider during the beneficiary’s medical appointments. 

While we observed some ICT meetings that included the care 

coordinator, the beneficiary, and another member of the care team, we 

also observed group meetings that covered multiple beneficiaries, which 

the organizations also considered to be ICT meetings. Staff from 

organizations in our review said that these regularly scheduled in-person 

group meetings discussed recently hospitalized beneficiaries or 

beneficiaries with health issues, and they typically involved the 

organizations’ medical directors, care coordinators, social workers, 

pharmacists, and network operations staff. During these types of ICT 

meetings, care coordinators summarized a beneficiary’s health status and 

 

18Some care coordinators we spoke with said that, unlike the health risk assessment, the ICP is a 

chance for the beneficiary to provide input on their care. They told us that clinical goals 

are not always the goals of the beneficiary, and often nonmedical needs, like housing, 

take priority. Many care coordinators said they focus on these needs first, before focusing 

on more difficult goals or health issues. Some care coordinators said it can take several 

visits to develop the plan depending on the beneficiary’s availability and willingness to 

engage. 

ICT
meeting participants provided input on how to address the beneficiary’s 

needs.

Organization staff in the five states in our review described challenges 

that affected their ability to coordinate care for beneficiaries. Specifically, 

these organizations reported challenges related to locating beneficiaries, 

engaging beneficiaries and primary care providers, and communicating 

with beneficiaries about the demonstration. CMS has established an 

oversight framework for the demonstration that includes monitoring 

activities. However, while the agency collects information that assesses 

the extent to which care coordination is occurring in the demonstration, 

not all of this information is comparable.

Page 17 GAO-16-31 Dual-Eligible Demonstration 

Organization staff said it was a challenge locating beneficiaries to initiate 

care coordination services because the characteristics of some dualeligible beneficiaries make it difficult to develop and maintain accurate 

contact information. Some dual-eligible beneficiaries are transient 

because they are homeless or live in temporary accommodations, such 

as a hotel or with relatives. Many may be unreachable by telephone 

because they have no or limited access to a telephone. Additionally, staff 

told us that behavioral health issues, such as substance abuse, are 

prevalent and may affect an individual’s ability to remain in touch with 

providers or organizations. Further, organizations have difficulty locating 

beneficiaries if the states do not have accurate beneficiary contact 

Organizations 

Described Challenges 

in Coordinating Care, 

and the Extent to 

Which Care 

Coordination Occurs 

in the Demonstration 

Is Not Fully Known

Organizations Described 

Challenges That Affected 

Their Ability to Coordinate 

Care

Locating Beneficiaries
information.

Page 18 GAO-16-31 Dual-Eligible Demonstration 

19 Staff from some organizations in our review also told us that 

dual-eligible beneficiaries enrolled via the passive enrollment process were 

harder to locate, and some beneficiaries were unaware they were enrolled. 

Organization staff told us they devoted time and staff resources trying to 

locate beneficiaries, some increasing staff or hiring a vendor to help 

locate beneficiaries. Furthermore, some organization staff told us they 

conducted outreach efforts to community-based organizations that have 

prior relationships with dual-eligible beneficiaries and know how to locate 

them. Some organizations reported that they had developed strategies for 

finding beneficiaries. CMS and some states have discussed and 

developed best practices for finding beneficiaries.

When organizations are unable to locate beneficiaries, it can be 

challenging for the organizations to coordinate their care, which is one of 

the key goals of the demonstration and one that CMS views as essential 

to the successful integration of care between Medicare and Medicaid. For 

example, staff at some organizations in California told us that, in order to 

address the challenge of coordinating services for the beneficiaries they 

could not reach, they used a standard ICP outline auto-populated with 

any information they had about the beneficiary.20 We also found that 

advocacy groups in four of the five states we reviewed had concerns about the 

extent to which care coordination is being provided in the demonstration. 

These advocacy groups noted that some of the beneficiaries with whom 

they interacted said that they had not been assigned a care coordinator, 

participated in an ICT meeting, or worked with their care coordinator to 

develop an ICP. One advocacy group told us that it had worked with a 

high-risk beneficiary who had been enrolled in the demonstration for a 

year but had not yet been contacted by a care coordinator. Our findings 

are consistent with the results of a 2015 study by the Medicaid and 

Children’s Health Insurance Program Payment and Access Commission 

 

19CMS officials told us that states and organizations could also obtain beneficiary contact 

information from CMS to help them locate unreachable beneficiaries. States and 

organizations previously had to request this information separately for each beneficiary. 

However, in August 2015, CMS announced that states and organizations could request 

beneficiary contact information from CMS for groups of beneficiaries upon enrollment. 

According to CMS, this new capability provides an additional source for beneficiary 

contact information and can help both the states and organizations obtain contact 

information for newly enrolled beneficiaries if state data are not yet available. 

20CMS officials said they do not prohibit organizations from creating care plans for beneficiaries 

they cannot reach; however, they do not believe this practice fulfills CMS’s vision of a 

beneficiary-driven ICP development process. 
(MACPAC), which found that many of the beneficiaries who participated 

in focus groups across three capitated model states said they did not 

have a care coordinator and had not experienced these required 

components of care coordination.

Page 19 GAO-16-31 Dual-Eligible Demonstration 

21

Organization staff in the five states in our review said that it is a challenge to 

engage beneficiaries to coordinate their care in the demonstration. Care 

coordinators pointed out that the demonstration requires effort on the part 

of the beneficiary—a willingness to engage with the care coordinator to 

use the services available. However, beneficiaries may not understand 

how the demonstration can benefit them, and may not be aware of 

services available. A beneficiary advocacy group in Massachusetts said 

that one goal of the demonstration is to have a beneficiary-driven care 

system, but if beneficiaries cannot advocate for themselves, or are not 

aware of their options, then they cannot benefit from the demonstration. 

Additionally, organization staff said that some beneficiaries are not 

interested, while others may be distrustful of the health care system in 

general and not comfortable answering questions about their health from 

individuals they do not know. Lack of engagement and understanding of 

available care options can affect the provision of care coordination 

services, including participation in ICTs. For example, staff we spoke with 

at a few organizations said that not all beneficiaries want to participate in 

their ICT because, for example, they are not comfortable having their 

health care discussed in a team setting. CMS officials said that ICTs are 

built on the health needs and specific preferences of the beneficiary and 

that, while all beneficiaries are to have access to an ICT, there are no 

requirements for beneficiaries to participate in ICT meetings. During our 

observations of ICT meetings, we found that not all beneficiaries 

participated. Specifically, over 17 beneficiaries were discussed during the 

9 ICT meetings we observed and only 8 beneficiaries joined the meetings 

by phone. CMS officials said that the beneficiary does not need to be 

 

21MACPAC is a nonpartisan legislative branch agency that provides policy and data analysis and 

makes recommendations to Congress, the Secretary of Health and Human Services, and the 

states on issues affecting Medicaid and the Children’s Health Insurance Program. 

Specifically, MACPAC conducted seven focus groups with beneficiaries enrolled in the 

capitated model in California, Massachusetts, and Ohio. In general, most of the 

participants said they had not seen or received a personal care plan. Some of the focus 

group participants also said they had not yet experienced a team-based approach to care 

coordination services. See Medicaid and Children’s Health Insurance Program Payment 

and Access Commission Experiences with Financial Alignment Initiative Demonstration 

Projects in Three States (Washington, D.C.: May 2015). 

Engaging Beneficiaries and 

Primary Care Providers
involved every time ICT members communicate, but should at least be 

aware of the meetings if he or she is not participating in them.

Organization staff we spoke with said that engaging primary care 

providers in the demonstration has also been a challenge. While primary 

care providers are considered a core member of the ICT in the 

demonstrations, six of the seven providers we interviewed had never 

participated in an ICT meeting and two had never reviewed an ICP. 

Organization staff we spoke with said that the busy schedules of primary 

care providers, and their varying levels of interest in the demonstration, 

made it difficult to engage them in the ICTs. In fact, in many of the ICT 

meetings we observed, the beneficiary’s primary care provider was not 

present; however, the organization’s medical director was present and 

was an active participant in the discussion. Organization staff also said 

that a provider’s knowledge of the demonstration can affect his or her 

willingness to engage with care coordination activities. Organization staff 

and primary care providers said that providers caring for a beneficiary 

with multiple health issues are more likely to engage with care 

coordinators. Staff of some organizations said they were trying to 

increase provider engagement through provider education and provider 

incentives, as well as by sending them completed ICPs and results of ICT 

meetings, and by scheduling ICT meetings to accommodate providers’ 

schedules.

Some organizations and beneficiary advocacy groups we spoke with said 

that beneficiaries have had difficulty with communication about the 

demonstration. Some organizations and beneficiary advocates said 

enrollment materials that beneficiaries received from the state were 

overwhelming for the beneficiary because of the volume of information in 

the materials and because the information was not easy to understand. 

Additionally, some organizations and advocates said that enrollment 

materials sent by mail often do not get opened. CMS officials said that in 

response to this challenge states have attempted to streamline their 

enrollment materials by focusing on which materials are most applicable 

to beneficiaries in that state. CMS officials added that they are 

encouraging the states to test their enrollment materials with a sample of 

beneficiaries before distributing them to all beneficiaries, and several 

states have opted to do so.

Additionally, staff we spoke with at some organizations said that the 

information beneficiaries receive from outside of the organization creates 

confusion and anxiety, and may lead to some beneficiaries opting out of 

the demonstration. An organization in California said that private entities 

Page 20 GAO-16-31 Dual-Eligible Demonstration 

Communicating with 

Beneficiaries about the 

Demonstration
sponsored newspaper advertisements that encouraged beneficiaries to 

opt out of the demonstration, which created confusion among 

beneficiaries. Staff at some organizations said they would like to reach 

out to beneficiaries before their effective enrollment date to communicate 

with them about the demonstration.

To oversee the coordination of care provided in the demonstration, CMS 

has established a framework of monitoring activities. The agency has 

established contract management teams (CMT) in the capitated states 

that are responsible for monitoring the demonstration on a day-to-day 

basis by providing technical assistance and overseeing contract 

compliance. These teams allow for collaboration between CMS and the 

states and comprise, at a minimum, officials from the CMS central office, 

the CMS regional office, and the state Medicaid office, but may include 

other entities, depending on the state. CMTs have a number of required 

responsibilities outlined in CMS guidance to ensure that organizations 

comply with their contracts, such as monitoring the organizations’ 

performance in meeting measures and tracking complaints. In addition, 

the CMTs are required to meet regularly with participating organizations 

to discuss various topics including compliance, enrollment, and 

beneficiary issues. If an organization is found to be out of compliance with 

its contract, the CMTs can impose a range of enforcement actions 

increasing in severity from an initial notice of noncompliance to a warning 

letter, and finally to a formal corrective action request.

Page 21 GAO-16-31 Dual-Eligible Demonstration 

22

According to CMS officials, the key difference in oversight provided is that 

CMS primarily oversees the organizations under the capitated model 

while it oversees the states under the MFFS model. Specifically, in states 

using an MFFS model, the state itself is primarily responsible for the dayto-day monitoring of the demonstration, and the CMS regional office is 

 

22For less serious violations, CMTs may work informally with an organization to improve a 

particular area of performance by requesting the organization create a performance 

improvement plan. For more serious violations, CMTs can issue a notice of 

noncompliance, which notifies an organization that it is out of compliance and requests 

that it correct the problem. A warning letter notifies organizations that one or more specific 

areas of performance is unacceptable and further noncompliance will lead to more 

stringent actions. Warning letters are used for repeated noncompliance or for more 

serious instances of noncompliance. A corrective action request is issued when CMS 

identifies an area of concern that requires a formal plan to resolve. Corrective action 

requests are issued for organizations that have not provided a satisfactory response to a 

warning letter or if the issue is of a very serious nature. 

CMS Has Established a 

Framework of Monitoring 

Activities to Oversee the 

Demonstration
responsible for overseeing the state’s compliance with the terms of its 

demonstration as well as tracking its required data reporting for the 

demonstration.

One key component of CMS’s oversight is monitoring of core and statespecific measures that the organizations, for the capitated model, and 

states, for the MFFS model, are contractually required to report. The 

measures include established quality measures from organizations like 

the National Quality Forum, as well as demonstration-specific measures 

developed by CMS, in collaboration with the states, to assess the 

demonstration.

Page 22 GAO-16-31 Dual-Eligible Demonstration 

23 The organizations in the capitated states use a common set of 

core measures. Similarly, the MFFS states adhere to a common set of core 

measures. However, the sets of core measures differ between the two 

models.24 (See table 2.) CMS officials said that they did not deliberately design 

the two models to have different sets of core measures, but that the 

differences were the result of data that organizations and states collected 

prior to the demonstration. Specifically, they said that many of the 

demonstration-specific measures in the capitated states were adapted 

from existing Medicare Part C and Part D measures; in contrast, the 

MFFS states were not collecting these types of measures prior to the 

demonstration. In both capitated and MFFS model states, CMS 

supplements these core measures with required, state-specific measures. 

(See app. I for the state-specific measures for the five states that we 

reviewed.)

 

23The National Quality Forum is a nonprofit organization established in 1999 that fosters 

agreement on national standards for measurement and public reporting of health care performance 

data. 

24CMS officials told us that while the sets of core measures differ between the MFFS and 

capitated models, they tried to develop some measures that examined similar concepts 

between the two models. For example, both the capitated and MFFS models have 

measures assessing the percentage of beneficiaries screened for clinical depression with 

documentation of a follow-up plan and the percentage of beneficiaries for whom a 

transition record was transmitted to a health care professional within 24 hours of 

discharge.
Table 2: Core Measures for Capitated and Managed Fee-for-Service (MFFS) Models Required by the Centers for Medicare & 

Page 23 GAO-16-31 Dual-Eligible Demonstration 

Medicaid Services’ (CMS) Financial Alignment Demonstration for Dual-Eligible Beneficiaries

Core measures for the capitated model 1. Percentage of beneficiaries with a health risk assessment 

completed within 90 days of enrollmenta

2. Percentage of beneficiaries with an annual health risk 

reassessment

3. Percentage of beneficiaries for whom a transition record was 

transmitted to a health care professional within 24 hours of 

discharge

4. Number of grievances and appeals filedb

5. Care coordinator-to-member ratio

6. Establishment of consumer advisory board or inclusion of 

consumers on a preexisting governance board consistent with 

contractual requirementsa

7. Percentage of beneficiaries screened for clinical depression and 

who had documentation of a follow-up plan

8. Percentage of clean claims for long-term services and supports 

paid within 30, 60, and 90 daysc

9. Number of behavioral health-related emergency room visits

10.Nursing facility diversiond

Core measures for the MFFS model 1. Percentage of hospital readmissions within 30 days of discharge

2. Percentage of hospital admissions attributable to an ambulatory 

care-sensitive conditione

3. Percentage of emergency department visits for conditions that were 

either preventable or treatable in a primary care setting

4. Percentage of beneficiaries hospitalized for mental illness who 

received follow-up care

5. Percentage of beneficiaries screened for clinical depression and 

who had documentation of a follow-up plan

6. Percentage of beneficiaries for whom a transition record was 

transmitted to a health care professional within 24 hours of 

discharge

7. Percentage of beneficiaries who were screened for fall risk

8. Percentage of beneficiaries with alcohol or other drug dependence 

who initiated treatment

Source: Capitated and MFFS model reporting requirements in the CMS Financial Alignment Demonstration. | GAO-16-31

Note: CMS requires organizations in the capitated model to report additional state-specific measures, 

not included in this table. The capitated model measures were effective as of January 2014 and 

updated in January 2015, and the MFFS model measures were effective as of July 2013 and updated 

as of July 2015.

a

This was a quality withhold measure for the first year of the demonstration, meaning CMS and the 

state’s Medicaid department will each withhold a percentage of the organization’s capitated rate.

b

The organizations are responsible for tracking grievances and appeals. Beneficiaries can file 

grievances, such as complaints, with the organizations. Beneficiaries can also appeal decisions 

regarding their care, such as denial of payment for certain services.
c

This measure examines clean claims—that is, claims that include all of the required information 

needed for processing—for long-term services and supports, which include different types of services 

that can help beneficiaries meet their daily assistance needs.

dNursing facility diversion is an effort to provide assistance in arranging community-based care for 

beneficiaries who are at risk of admission to nursing facilities. This measure examines the percentage 

of beneficiaries living in the community who require an institutional level of care but who did not 

reside in a facility for more than 100 continuous days in both the previous and current reporting 

periods.

e

This measure includes admissions for one of the following ambulatory care-sensitive conditions: (1) 

diabetes with short-term complications, (2) diabetes with long-term complications, (3) uncontrolled 

diabetes without complications, (4) diabetes with lower-extremity amputation, (5) chronic obstructive 

pulmonary disease, (6) asthma, (7) hypertension, (8) heart failure, (9) angina without a cardiac 

procedure, (10) dehydration, (11) bacterial pneumonia, or (12) urinary tract infection.

CMS designated a subset of the core and state-specific measures for the 

capitated states as quality withhold measures, meaning that, on an 

annual basis, CMS and a state’s Medicaid program each withhold a 

percentage of an organization’s capitated rate, which is later adjusted and 

repaid based on the organization’s performance. Two of the 10 core 

measures were quality withhold measures during this first year of the 

demonstration, with additional state-specific measures also designated as 

quality withhold measures in each state. The CMTs in the capitated states 

are required to review an organization’s performance on the remaining 

core and state-specific measures, provide feedback to the organizations, 

investigate any areas of poor performance, and issue enforcement 

actions if organizations are out of compliance. Of the 11 organizations in 

the four capitated states that we reviewed, 1 had received a formal 

enforcement action—a notice of noncompliance—from CMS related to its 

performance on core measures, as of April 2015.

Page 24 GAO-16-31 Dual-Eligible Demonstration 

25 In contrast, MFFS states 

can earn a retrospective performance payment annually that is based, in part, on 

their performance compared to benchmarks for all of their core and statespecific quality measures, which is intended to incentivize high 

performance. States receive a portion of their total performance payment 

if they meet the minimum performance threshold and can qualify to 

receive additional payments based on how well they performed on 

individual measures. Therefore, poorly performing MFFS states that do 

not meet the minimum threshold would not earn a performance payment. 

The timing of our review was too early in the implementation process for 

CMS to have paid a retrospective performance payment to either of the 

two MFFS states, but one of the states—Washington—had recently 

submitted its first set of annual data.

 

25Some of the organizations in our review had received a performance improvement plan request 

from CMS, however, related to their performance on core performance measures.
These core and state-specific measures are outlined in CMS technical 

guidance, which includes specific instructions for how organizations and 

the states should report the data to CMS.

Page 25 GAO-16-31 Dual-Eligible Demonstration 

26 The organizations in the 

capitated states are to generally submit their data to CMS on a quarterly, 

semiannual, or annual basis, depending on the measure, through a 

contractor-administered website. CMS officials told us the contractor then 

synthesizes the data and shares them with CMS headquarters and the 

CMTs for further analysis. The CMTs may then discuss the results during 

regular meetings with the organizations. In contrast, in the MFFS model, 

states are responsible for collecting data from the integrated care 

organizations annually and submitting it to CMS through a contractoradministered website.

In addition, CMS requires organizations, for the capitated model, and the 

states, for the MFFS model, to report data annually from the Consumer 

Assessment of Healthcare Providers and Systems (CAHPS), which is a 

patient survey developed by another HHS agency, the Agency for 

Healthcare Research and Quality. Agency officials told us in early 

November 2015 that they expect to receive CAHPS results by the end of 

the month for the first capitated states that implemented the 

demonstration, and they expect to complete their analysis of the results 

and make them available by spring 2016. The MFFS states—Washington 

and Colorado—completed the survey by November 2015, and CMS 

anticipates the results will be available in spring 2016. CMS officials told 

us that they worked with a contractor to adapt a version of the CAHPS 

survey for the MFFS states, which is different from the CAHPS survey 

used by the organizations in the capitated states. Specifically, the 

organizations in the capitated states use the survey that must be 

completed by all Medicare managed care plans. In commenting on our 

draft report, HHS provided us with new information indicating that CMS 

had added 10 demonstration-specific supplemental questions to the 

capitated CAHPS survey. In addition, because the organizations in the 

capitated model are also Medicare managed care plans, they must report 

data annually from the Healthcare Effectiveness Data and Information Set 

(HEDIS). HEDIS, which is developed by the National Committee for 

Quality Assurance and helps consumers compare the performance of 

health plans in providing selected services, and the Medicare Health 

 

26These measures are generally described in the memoranda of understanding and the contracts, 

with additional technical details provided in guidance released annually by CMS. 
Outcomes Survey (HOS), which is a patient-reported outcomes survey, 

are measures that must also be reported by Medicare managed care 

plans to CMS.

Page 26 GAO-16-31 Dual-Eligible Demonstration 

27 Agency officials told us they received the first HEDIS 

results in November 2015 and they expect HOS results in spring 2016. 

Organizations in the capitated states are also required to regularly report 

encounter data to CMS, which contain information on the services and 

items furnished to beneficiaries.

CMS has also hired a contractor—RTI International—to assess the 

implementation of the demonstration and evaluate its impact on 

beneficiary experience, quality, utilization, and cost.28 RTI International will 

conduct annual and final aggregate evaluations of each state’s 

demonstration program, as well as an overall evaluation across the states 

that will use both qualitative and quantitative data analysis. Specifically, 

the contractor will analyze enrollment, encounter, and claims data and 

conduct site visits, focus groups, and interviews.29 CMS officials said that 

the first annual state evaluation is anticipated to be completed in winter 2016 and 

the final aggregate evaluation is expected in 2018, at the earliest.

 

27The National Committee for Quality Assurance, established in 1990, is a private, nonprofit 

organization dedicated to improving health care quality. 

28Edith G. Walsh and Norman Brangan, Measurement, Monitoring, and Evaluation of State 

Demonstrations to Integrate Care for Dual Eligible Individuals: Aggregate Evaluation Plan

(Waltham, Mass.: RTI International, Dec. 16, 2013). RTI International is an independent, 

nonprofit institute that provides research, development, and technical services. 

29The contractor collects some quantitative data, such as information on eligibility and enrollment, 

on a quarterly basis, and CMS officials told us the contractor shares the results with CMS 

headquarters and the CMTs. 
CMS collects different sets of core measures for the capitated and MFFS 

model states. Two out of 10 core measures in the capitated model 

provide information on the extent to which care coordination is occurring, 

while no core measures in the MFFS model examine this area.

Page 27 GAO-16-31 Dual-Eligible Demonstration 

30 The core 

measures for the capitated states examine the percentage of health risk 

assessments completed within 90 days of enrollment and the percentage 

of reassessments that are completed annually.31 CMS does not collect any 

other core measures in either the capitated states or the MFFS states that assess 

key aspects of care coordination, such as whether care coordinators were 

meeting with beneficiaries, whether ICPs were being developed, or 

whether ICT meetings are occurring—components of the demonstration 

that, like the health risk assessments, are required by CMS under the 

demonstration.32

CMS also collects some state-specific measures that examine the extent 

to which care coordination is occurring; however, these measures are not 

collected consistently across the states, or for the two types of models in 

the demonstration. For example, Washington (an MFFS state), 

Massachusetts (a capitated state), and Illinois (a capitated state) have 

state-specific measures that examine whether beneficiaries have 

completed an ICP within 90 days of enrollment.33 While the other two 

 

30Measures that reflect the extent to which care coordination is occurring include whether care 

coordinators are meeting with beneficiaries, health risk assessments are being completed, ICPs are 

being developed, ICT meetings are occurring, and other aspects of care coordination that 

CMS requires organizations in the demonstration to provide to beneficiaries. CMS has 

other core and state-specific measures that may assess whether existing care 

coordination is effective at improving beneficiaries’ overall health outcomes, but these 

measures were outside the scope of our review. 

31The health risk assessment completion rate was designated a quality withhold measure in the first 

year of the demonstration. The Medicaid offices in all but one of the four capitated states in 

our review said that many of the organizations had difficulty completing timely health risk 

assessments primarily because the organizations have faced challenges locating 

enrollees. 

32The capitated states are required to report a core measure that assesses the care 

coordinator to member ratio, which is a ratio of the total number of care coordinators on an 

organization’s staff to the total number of beneficiaries in the organization. According to 

CMS officials, this measure does not provide information on individual care coordinators’ 

caseloads. 

33Two of these states had data available at the time of our review. These data showed that, in the 

third quarter of 2014, which was the most recent data available at the time of our request, 2 of 

the 3 organizations in one state and 2 of the 8 organizations in another state had an ICP 

completion rate of less than 35 percent. 

CMS Collects Information 

that Assesses the Extent 

to which Care 

Coordination Is Occurring 

in the Demonstration, but 

Not All of This Information 

is Comparable
capitated states in our review have a similar measure, they differed from the 

ICP measures in Washington, Massachusetts, and Illinois. For example, 

while California has a state-specific measure assessing whether an ICP 

was completed, there is no time period specified for doing so, and it has 

additional measures that separately examine whether high- and low-risk 

beneficiaries had an ICP completed within 30 working days of their health 

risk assessment.

Page 28 GAO-16-31 Dual-Eligible Demonstration 

34 We also noted that all the capitated states in our review had 

a state-specific measure that examined whether beneficiaries had a 

documented discussion of care goals, but the MFFS state in our review,

Washington, did not have this measure.

In addition, CMS officials told us they plan to assess care coordination 

through the forthcoming results of the CAHPS survey (for both the 

capitated and MFFS models).35 CMS adapted the CAHPS survey for the 

demonstration in the MFFS states and, in commenting on our draft report, HHS 

provided us with new information indicating that CMS had added demonstrationspecific supplemental questions to the CAHPS survey in the capitated 

states. These surveys contain two questions specific to care coordination 

that are consistent across all states in the demonstration. Specifically, the 

MFFS and capitated CAHPS surveys both contain questions about 

whether anyone from the organization helped to coordinate the 

beneficiaries’ care and how satisfied beneficiaries were with the help they 

received to coordinate their care. While the results of the capitated and 

MFFS surveys are still forthcoming, these questions may be able to 

provide CMS with important information about whether beneficiaries are

meeting with their care coordinators. However, while the MFFS CAHPS 

survey also contains questions related to developing an ICP and meeting 

 

34Similarly, Virginia has a state-specific measure that assesses whether an ICP was completed 

within 90 days of enrollment, and this measure also stratifies the ICP completion rate by 

risk level. 

35CMS officials told us that they also plan to assess care coordination through the forthcoming 

results of the HEDIS survey (for the capitated model). However, the HEDIS survey is a 

standardized survey that collects data from all Medicare managed care plans and does 

not contain measures specific to care coordination under the Financial Alignment 

Demonstration. In addition, while RTI International’s evaluation will assess many different 

aspects of the demonstration using both quantitative and qualitative data, RTI 

International will not be collecting any quantitative data that provide information on the 

extent to which care coordination is occurring in the demonstration. However, RTI 

International will be collecting qualitative data that may explore this area, such as requiring 

organizations to report whether or not care coordination procedures were implemented as 

expected. Further, CMS will be collecting encounter data, but these data will not provide 

information on the extent to which care coordination is occurring. 
with an ICT, these questions are not included in the capitated CAHPS 

survey.

Page 29 GAO-16-31 Dual-Eligible Demonstration 

36 There were no questions on either survey related to the completion of 

the health risk assessment.

We and others have noted the importance of a common set of comparable 

measures across the states. In a 2012 report, we recommended that CMS 

systematically evaluate performance in its D-SNP program for dualeligible beneficiaries and noted that without standard measures it would 

not be possible for CMS to fully evaluate the relative performance of the 

D-SNPs.37 In addition, the Commonwealth Fund noted that, while varying the 

Financial Alignment Demonstration’s quality measures from state to state may be 

necessary because the demonstrations differ across all the states, researchers and 

policymakers will need a common set of comparable measures in order to 

make useful cross-state comparisons.38 While CMS has developed two core 

measures related to care coordination that are consistent across the capitated 

states in the demonstration, these measures are not core measures in the 

MFFS model and are therefore not comparable across both 

demonstration models. Moreover, while CMS collects some state-specific 

measures that examine this area, they are not comparable across the 

states. However, CMS has included two questions in its CAHPS survey 

that are consistent across the demonstration states in both the capitated 

and MFFS models, and the agency anticipates using these forthcoming 

results to assess care coordination.

 

36In addition, the MFFS CAHPS survey includes a question about whether someone from the 

beneficiaries’ ICT spoke with them about specific health goals. There is also a question related 

to whether, in the last 6 months, the beneficiary was helped by someone on his or her 

health care team to make a treatment plan that he or she could carry out in daily life. 

Similarly, there is a question related to how often the beneficiary was helped by someone 

on his or her health care team to plan ahead and take care of his or her condition, even in 

hard times. 

37See GAO-12-864. 

38The Commonwealth Fund is a private foundation that aims to promote a high performing 

health care system that achieves better access, improved quality, and greater efficiency, 

particularly for society’s most vulnerable. The authors also noted that CMS needs to 

strengthen measures related to quality of life and long-term services and supports. See 

Sabiha Zainulbhai, Lee Goldberg, Weiwen Ng, and Anne H. Montgomery; Assessing Care 

Integration for Dual-Eligible Beneficiaries: A Review of Quality Measures Chosen by 

States in the Financial Alignment Initiative, The Commonwealth Fund, no. 1734, vol. 2 

(March 2014).
Internal control standards for the federal government specify that

monitoring should be designed to help an agency accomplish its goals.

Page 30 GAO-16-31 Dual-Eligible Demonstration 

39

Because not all of the information that CMS collects to examine the extent to 

which care coordination is occurring is comparable across the demonstration, 

the agency does not fully know whether it has achieved its goal of 

improving care coordination for dual-eligible beneficiaries. Further, CMS 

does not have all of the data necessary to identify and correct potential 

problems in the demonstration. CMS officials told us that any issues 

related to care coordination would be identified in the forthcoming results 

of the CAHPS survey and discussed during the regular CMT meetings 

with the organizations.40 CMS officials also noted that some of their existing 

core measures would indicate whether care coordinators are effectively 

coordinating care for patients, such as a core measure in the capitated 

model examining nursing facility diversion, that is, the percentage of 

beneficiaries living in the community who require an institutional level of 

care but who did not reside in a nursing home for more than 100 days. 

CMS officials told us that they believe these types of outcome-oriented 

measures provide more valuable information than process-oriented 

measures because they assess whether care coordination is effectively 

improving the health of beneficiaries. While we believe outcome 

measures are important for assessing care coordination in the 

demonstration, process measures are also needed to determine whether 

the demonstration is being implemented as intended. If process 

measures are not in place across the states participating in the 

demonstration to identify and correct potential problems, we believe that 

outcome measures cannot be reliably assessed.

CMS’s Financial Alignment Demonstration has the potential to improve 

the quality of care for dual-eligible beneficiaries and to reduce spending in 

the Medicare and Medicaid programs. A growing consensus suggests 

that coordination of care is an important strategy for achieving these 

goals. Dual-eligible beneficiaries, who often have extensive health care 

needs, typically receive their benefits separately through the Medicare 

 

39GAO/AIMD-00-21.3.1. 

40For example, the CMT in one state in our review learned that two organizations had not 

scheduled ICT meetings for their beneficiaries and—for one of these organizations—had 

not developed ICPs for their beneficiaries, as required by contract. The CMT required the 

organizations to submit performance improvement plans describing how they planned to 

resolve these issues. 

Conclusions
and Medicaid programs. Improving care coordination is a key goal for 

CMS’s demonstration and will ultimately influence whether the program is 

successful. Our work identified multiple challenges in locating and 

communicating with beneficiaries as well as difficulties in engaging 

providers in fundamental care coordination activities. Similarly, our 

interviews with beneficiary advocacy groups and providers called into 

question the extent to which care coordination is occurring in the 

demonstration.

CMS collects information about the extent to which care coordination is

occurring in the demonstration, but not all of this information is

comparable across the states. Therefore, it cannot reasonably determine 

whether health risk assessments are being completed, ICPs are being 

developed, and ICT meetings are occurring—all aspects of care 

coordination that CMS requires organizations to provide to beneficiaries. 

By not having data that are consistently available from all states across 

the demonstration that examine these aspects of care coordination, CMS 

does not fully know whether it has achieved its goal of providing 

coordinated care to dual-eligible beneficiaries. CMS has included

measures in its CAHPS survey for both the capitated and MFFS states 

that examine whether beneficiaries have had their care coordinated 

among different health care providers. However, we believe that 

establishing additional measures that would allow CMS to obtain these 

data from all states and organizations participating in the demonstration 

could help it better understand the reasons why care coordination is or is 

not occurring and thus help the agency to strengthen the demonstration. 

Given the potential for the demonstrations to be expanded across the 

United States, it is important that CMS expediently collect this information 

to inform whether it is achieving its goal.

To strengthen oversight of the provision of care coordination services in 

the Financial Alignment Demonstration, we recommend that the 

Secretary of Health and Human Services direct the Administrator of CMS 

to take the following two actions:

· Expediently develop and require organizations in the capitated model, 

and the states in the MFFS model, to report comparable core data 

measures across the demonstration that measure the following:

· the extent to which ICT meetings are occurring, and

Page 31 GAO-16-31 Dual-Eligible Demonstration 

Recommendations for 

Executive Action
· for MFFS states, the extent to which health risk assessments are 

completed.

· Align CMS’s existing state-specific measures regarding the extent to 

which ICPs are being developed across the capitated and MFFS 

states to make them comparable and designate them as a core 

reporting requirement.

HHS reviewed a draft of this report and provided written comments, which 

are reprinted in appendix II. In its comments, HHS did not specifically 

state whether it agreed or disagreed with our first recommendation, but it 

concurred with our second recommendation. HHS also provided us with 

technical comments, which we incorporated in the report as appropriate. 

Regarding our first recommendation that HHS require organizations to 

report comparable core data measures across the demonstration, HHS 

provided us with new information that it had not previously provided, 

which caused us to reconsider one of our findings and a related 

recommendation. Specifically, HHS noted that that the CAHPS surveys 

for both the capitated and MFFS models contain supplemental questions 

for the demonstration that are specific to care coordination, whereas they 

had previously provided us with information indicating that only the MFFS 

model CAHPS survey contained these questions. Given the new 

information HHS provided, we updated our report to reflect CMS’s plan to 

use the forthcoming results of the CAHPS survey to assess care 

coordination across the demonstration. In addition, we modified the 

recommendation contained in our draft report that CMS require 

organizations in the capitated model, and the states in the MFFS model, 

to report comparable core data measures across the demonstration 

regarding the extent to which care coordinators are meeting with 

beneficiaries. In addition, HHS noted in its comments that it has 

comparable risk assessment completion rate measures in both the MFFS 

and capitated models and said the variances between the health risk 

assessment measures in the two demonstrations reflect different design 

elements. However, we found that there were no core measures in the 

MFFS model examining the health risk assessment completion rate. HHS

also described steps that it has been taking that may, in the future, help to 

address the findings in this report. For example, HHS noted that it is 

developing a set of care coordination measures to supplement data 

obtained from the CAHPS surveys. HHS also stated that the timeline for 

measurement development may not align with the current three-year 

demonstration period, such that the inclusion of any additional new 

Page 32 GAO-16-31 Dual-Eligible Demonstration 

Agency Comments 

and Our Evaluation
measures would have to be considered for potential future extension or 

expansion of the initiative. Given the potential for the demonstrations to 

be expanded across the United States, we believe it is important that 

CMS expediently collect this information to inform whether care 

coordination in the demonstration is being implemented as intended. HHS 

stated that it recently entered into a contract to support measure 

development, which should better equip HHS to evaluate the extent to 

which care coordination is occurring in the demonstration, among other 

things. 

HHS concurred with our second recommendation to make CMS’s existing 

state-specific measures comparable and designate them as a core 

reporting requirement. HHS stated it would examine the feasibility of 

designating ICPs as a core reporting requirement as the demonstration 

progresses. However, it noted that it currently monitors the timely 

completion of ICPs in both models using different state-specific measures 

rather than uniform core reporting measures in order to reflect differences 

in the demonstration parameters across the states. We believe that 

aligning existing state-specific measures regarding ICP development to 

make them comparable and designating them as a core reporting 

requirement would help CMS better understand the extent to which care 

coordination is occurring across the demonstration and thus help the 

agency strengthen the demonstration as it progresses.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of Health 

and Human Services and other interested parties. In addition, the report 

will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staffs 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 major contributions to this report are 

listed in appendix III.

Kathleen M. King

Director, Health Care

Page 33 GAO-16-31 Dual-Eligible Demonstration 
List of Requesters

The Honorable Frank Pallone, Jr.

Ranking Member

Committee on Energy and Commerce

House of Representatives

The Honorable Gene Green

Ranking Member

Subcommittee on Health

Committee on Energy and Commerce

House of Representatives

The Honorable Sander B. Levin

Ranking Member

Committee on Ways and Means

House of Representatives

The Honorable Jim McDermott

Ranking Member

Subcommittee on Health

Committee on Ways and Means

House of Representatives

Page 34 GAO-16-31 Dual-Eligible Demonstration 
Appendix I: Centers for Medicare & Medicaid 

Services’ (CMS) State-Specific Measures for 

the Financial Alignment Demonstration, by 

State

Page 35 GAO-16-31 Dual-Eligible Demonstration 

State-specific measure Description California Illinois Massachusetts Virginia Washington

Access · Adults’ access to 

preventive/ambulatory health services

n/a X n/a n/a n/a

Assessment · Behavioral health risk assessment and 

follow-up

n/a X n/a n/a n/a

· Moderate- and high-risk members with 

a health risk assessment completed 

within 90 days of enrollment

n/a X

a

n/a n/a n/a

· Community Well members with a 

health risk assessment completed 

within 90 days of enrollment

n/a n/a n/a X

a

n/a

· Vulnerable subpopulation members, 

Elderly or Disabled with Consumer 

Direction (EDCD) waiver members—

those individuals also participating in 

Virginia’s CMS-approved Medicaid 

waiver, which provides services to help 

individuals live in their own homes or 

communities instead of a nursing 

home—and nursing facility members 

with a health risk assessment 

completed within 60 days of enrollment

n/a n/a n/a X

a

n/a

Care coordination · Members with individualized care 

plans (ICP) within 90 days of 

enrollment

X

b

X X X

a,c Xd

· High-risk members with an ICP within 

30 working days after the completion 

of a timely health risk assessment

X n/a n/a n/a n/a

· High-risk members with an ICP within 

30 working days after the completion 

of a health risk assessment

X n/a n/a n/a n/a

· Low-risk members with an ICP within 

30 working days after the completion 

of a timely health risk assessment

X n/a n/a n/a n/a

· Low-risk members with an ICP within 

30 working days after the completion 

of a health risk assessment

X n/a n/a n/a n/a

· Members with documented discussion 

of care goals

X

a

X

a

X

a

X

a

n/a

· Members with long-term services and 

supports needs who have an 

independent living long-term services 

and supports coordinator

n/a n/a X

a

n/a n/a

· Members receiving Medi-Cal specialty 

mental health services receiving 

coordinated care plans as indicated by 

having an ICP with the primary mental 

health provider

X

a

n/a n/a n/a n/a

Appendix I: Centers for Medicare & Medicaid 

Services’ (CMS) State-Specific Measures for 

the Financial Alignment Demonstration, by 

State
Appendix I: Centers for Medicare & Medicaid 

Services’ (CMS) State-Specific Measures for 

the Financial Alignment Demonstration, by 

State

Page 36 GAO-16-31 Dual-Eligible Demonstration 

State-specific measure Description California Illinois Massachusetts Virginia Washington

· Members with first follow-up visit within 

30 days after hospital discharge

X n/a n/a X X

e

· Members who have a care coordinator 

and have at least one care team 

contact during the reporting period

X

a

n/a n/a n/a n/a

· Ambulatory care follow-up with a 

provider within 14 days of emergency 

department visit

n/a X n/a n/a n/a

· Ambulatory care follow-up with a 

provider within 14 days of inpatient 

discharge

n/a X n/a n/a n/a

· Movement of members within service 

populations

n/a X

f

n/a X

f

n/a

· Transitions between hospitals, nursing 

facilities, and the community

n/a n/a n/a X n/a

Enrollee protections · The number of critical incident and 

abuse reports for members receiving 

long-term services and supports

X X X X n/a

· Policies and procedures attached to 

the memorandum of understanding 

with county behavioral health 

agency(ies) around assessments, 

referrals, coordinated care planning, 

and information sharing

X

a

n/a n/a n/a n/a

Organizational structure 

and staffing

· Americans with Disabilities Act 

compliance

n/a X

a

n/a X n/a

· Care coordinator training for 

supporting self-direction under the 

demonstration

n/a X X n/a n/a

· Organizations with an established 

physical access compliance policy and 

identification of an individual who is 

responsible for physical access 

compliance

X

a

n/a n/a n/a n/a

· Care coordinator training for 

supporting self-direction under the 

demonstration

X n/a n/a X n/a

· Licensure/certification requirements for 

new EDCD waiver providers

n/a n/a n/a X n/a

· Continuing licensure/certification 

requirements for EDCD waiver 

providers

n/a n/a n/a X n/a

· Non-licensed/noncertified EDCD 

waiver provider enrollment

n/a n/a n/a X n/a

Performance and quality 

improvement

· Adherence to antipsychotic 

medications for individuals with 

schizophrenia

n/a X n/a n/a n/a

· Cervical cancer screening n/a X n/a n/a n/a
Appendix I: Centers for Medicare & Medicaid 

Services’ (CMS) State-Specific Measures for 

the Financial Alignment Demonstration, by 

State

Page 37 GAO-16-31 Dual-Eligible Demonstration 

State-specific measure Description California Illinois Massachusetts Virginia Washington

· Diabetes screening for people with 

schizophrenia or bipolar disorder who 

are using antipsychotic medications

n/a X n/a n/a n/a

· Comprehensive diabetes care n/a X n/a n/a n/a

· Medication monitoring for patients with 

psychotic disorders

n/a X n/a n/a n/a

· Annual monitoring for patients on 

persistent medications

n/a X n/a n/a n/a

· Use of high-risk medications in the 

elderly

n/a X n/a n/a n/a

· Mental health recovery measure n/a n/a X n/a n/a

· Screening and brief counseling for 

unhealthy alcohol use

n/a n/a X n/a n/a

· Tobacco use: screening and cessation n/a n/a X n/a n/a

· Medication reconciliation postdischarge

n/a n/a X n/a n/a

· Care for adults n/a n/a X n/a n/a

· Members with severe mental illness 

receiving primary care services

n/a n/a n/a X n/a

· Recovery-oriented measures for 

persons with severe mental illness 

receiving mental health services

n/a n/a n/a X n/a

· Adjudicated clean claims n/a n/a n/a X

a

n/a

Utilization · Reduction in emergency department 

use for seriously mentally ill and 

substance use disorder members

X n/a n/a n/a n/a

· Readmissions of short- and long-stay 

nursing facility residents after 

hospitalization for diabetes, chronic 

obstructive pulmonary disease, or any 

medical diagnosis

X n/a n/a n/a n/a

· Coronary artery disease n/a X n/a n/a n/a

· Heart failure admission rate n/a X X n/a n/a

· Unduplicated members receiving home 

and community-based services and 

unduplicated members receiving 

nursing facility services

n/a X n/a n/a n/a

· Average length of receipt of home and 

community-based services

n/a X n/a X n/a

· Long-term care urinary tract infection 

admission rate and bacterial 

pneumonia admission rate

n/a X n/a n/a n/a

· Long-term care prevalence of hospitalacquired pressure ulcers

n/a X n/a n/a n/a

· Inpatient hospital 30-day readmission 

rates

n/a X n/a n/a n/a
Appendix I: Centers for Medicare & Medicaid 

Services’ (CMS) State-Specific Measures for 

the Financial Alignment Demonstration, by 

State

Page 38 GAO-16-31 Dual-Eligible Demonstration 

State-specific measure Description California Illinois Massachusetts Virginia Washington

· Chronic obstructive pulmonary disease 

or asthma in older adults admission 

rate

n/a n/a X n/a n/a

· EDCD waiver members who used 

consumer-directed services

n/a n/a n/a X n/a

· EDCD waiver members who 

experienced an increase or decrease 

in authorized personal care hours or 

respite care hours

n/a n/a n/a X n/a

· Unduplicated members receiving home 

and community-based services and 

unduplicated members receiving 

nursing facility services

n/a n/a n/a X n/a

Systems · Integrated care organization 

centralized enrollee record

n/a n/a X

a

n/a n/a

· Plan enrollee medical record n/a n/a n/a X n/a

Other · The percentage of Health Home 

Coordinators serving participating 

demonstration-eligible MedicareMedicaid clients who have taken the 

standardized state training on the 

reported elements of the Health Action 

Plan

n/a n/a n/a n/a X

· The average change in Patient 

Activation Measure score for 

participating demonstration-eligible 

Medicare-Medicaid clients who initially 

were least activated

n/a n/a n/a n/a X

· The percentage of demonstrationeligible Medicare-Medicaid member 

months where client received home 

and community-based services and 

support

n/a n/a n/a n/a X

· The percentage of demonstrationeligible Medicare-Medicaid member 

months where client received 

residential nursing home services

n/a n/a n/a n/a X

Source: Capitated and Managed Fee-for-Service model reporting requirements in the CMS Financial Alignment Demonstration. | GAO-16-31

Note: We reported these measures as they were reported in CMS guidance. California’s measures 

were effective as of April 1, 2014, and were updated August 24, 2015. Illinois’ measures were 

effective as of March 1, 2014, and were updated August 7, 2015. Massachusetts’ measures were 

effective as of January 1, 2014, Virginia’s measures were effective as of April 1, 2014, and 

Washington’s measures were effective as of July 1, 2013.

a

This was a quality withhold measure for the first year of the demonstration, meaning CMS and the 

state’s Medicaid department will each withhold a percentage of the organization’s capitated rate.

b

In California, the state-specific measure assesses whether an ICP was completed and does not 

specify a required time period.

c

In Virginia, the state-specific measure assesses whether beneficiaries categorized as Community 

Well, vulnerable subpopulations, EDCD, and nursing facility had a Plan of Care completed within 90 

days of enrollment.
Appendix I: Centers for Medicare & Medicaid 

Services’ (CMS) State-Specific Measures for 

the Financial Alignment Demonstration, by 

State

d

In Washington, the state-specific measure assesses the percentage of enrolled demonstrationeligible Medicare-Medicaid clients with Health Action Plans within 90 days of enrollment.

e

In Washington, the state-specific measure assesses the percentage of hospital discharges among 

demonstration-eligible Medicare-Medicaid clients with first follow-up visit within 30 days of hospital 

discharge.

f

In Illinois, the state-specific measure assesses movement of members within service populations. In 

Virginia, the state-specific measure assesses the transition of members between community, waiver, 

and long-term care services.

Page 39 GAO-16-31 Dual-Eligible Demonstration 
Appendix II: Comments from the Department 

of Health and Human Services

Page 40 GAO-16-31 Dual-Eligible Demonstration 

Appendix II: Comments from the Department 

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

of Health and Human Services

Page 41 GAO-16-31 Dual-Eligible Demonstration 
Appendix II: Comments from the Department 

of Health and Human Services

Page 42 GAO-16-31 Dual-Eligible Demonstration 
Appendix II: Comments from the Department 

of Health and Human Services

Page 43 GAO-16-31 Dual-Eligible Demonstration 
Appendix III: GAO Contact and 

Staff Acknowledgments

Kathleen M. King, (202) 512-7114 or kingk@gao.gov

In addition to the contact name above, Catina Bradley, Assistant Director; 

Giselle Hicks; Maggie Holihan; Sarah-Lynn McGrath; Beth Morrison; Ann 

Tynan; and Emily Wilson made key contributions to this report.

Page 44 GAO-16-31 Dual-Eligible Demonstration 

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Appendix IV: Accessible Data

Page 45 GAO-16-31 Dual-Eligible Demonstration 

DEPARTMENT OF HEALTH & HUMAN SERVICES

OFFICE OF THE SECRETARY

Assistant Secretary for Legislation

Washington, DC 20201

NOV 1 3 2015

Kathleen King Director,

Health Care

U.S. Government Accountability Office

441 G Street NW

Washington, DC 20548

Dear Ms. King:

Attached are comments on the U.S. Government Accountability Office's 

(GAO) report entitled, "Medicare and Medicaid: Greater Oversight 

Needed of CMS's Demonstration to Coordinate the Care of Dual-Eligible 

Beneficiaries" (GA0-16-31).

The Department appreciates the opportunity to review this report prior to 

publication.

Sincerely,

Appendix IV: Accessible Data

(291135)

Agency Comment 

Letter

Text of Appendix II: 

Comments from the 

Department of Health and 

Human Services

Page 1
Appendix IV: Accessible Data

Jim R. Esquea

Assistant Secretary for Legislation

Attachment

GENERAL COMMENTS OF THE DEPARTMENT OF HEALTH AND 

HUMAN SERVICES (HHS) ON THE GOVERNMENT ACCOUNT 

ABILITY OFFICE'S (GAO) DRAFT REPORT ENTITLED : MEDICARE 

AND MEDICAID: GREATER OVERSIGHT NEEDED OF CMS'S 

DEMONSTRATION TO COORDINATE THE CARE OF DUAL- ELIGIBLE 

BENEFICIARIES (GA0-16-31)

The Department of Health and Human Services (HHS) appreciates the 

opportunity to review and comment on the Government Accountability 

Office's (GAO) draft report. HHS is committed to making sure MedicareMedicaid enrollees, also known as dual eligible individuals, have full 

access to seamless, high quality health care and to making the health 

care system as cost- effective as possible.

HHS's Medicare and Medicaid programs, states, and stakeholders all play 

a critical role in achieving one of the Affordable Care Act's (ACA) goals: 

providing Medicare-Medicaid enrollees full access to seamless, high 

quality health care. HHS designed the Medicare-Medicaid Financial 

Alignment Initiative (Initiative) to better align the financing of the Medicare 

and Medicaid program s and integrate primary, acute, behavioral health, 

and long-term services and support for Medicare-Medicaid enrollees. The 

ultimate goals of the Initiative are to improve health outcomes, improve 

beneficiary experience, and promote independence in the community 

while reducing cost increases over time. Through this Initiative, HHS has 

partnered with states to establish demonstrations using the capitated and 

managed fee-for-service (MFFS) models.

HHS is using a wide range of measures from numerous sources to 

monitor and evaluate progress toward the goals of the Initiative. 

Assessing the delivery of care coordination is part of that broader 

strategy. In addition, HHS evaluates the overall impact of the 

demonstrations including changes in person-level health outcomes and 

experience of care, and changes in pattern s of care to analyze whether 

or not HHS and demonstration participants can make further 

improvements to the demonstrations. HHS will examine historical data, 

including data from the years immediately preceding the demonstrations, 

and data generated during the demonstration period.

Page 46 GAO-16-31 Dual-Eligible Demonstration 

Page 2
Appendix IV: Accessible Data

Where relevant existing measures are available, such as the Medicare 

Parts C and D measures and the Consumer Assessment of Health 

Providers and Systems (CAHPS) survey currently used for Medicare 

Advantage plans, we are using those measures as part of the monitoring 

and evaluation strategy for the Initiative. HHS established core measures 

based on recommendation s from the National Quality Forum (NQF), 

including the core measure set outlined in the June 2012 report 

Measuring Healthcare Quality for the Dual Eligible Beneficiary Population.

HHS is contracting with the National Committee for Quality Assurance 

(NCQA) to develop a set of consensus-based measures aimed at 

assessing care coordination by Medicare Advantage plans to supplement 

the data on care coordination that to date has been obtained from 

CAHPS surveys on beneficiaries' experience of care. HHS has also 

recently entered into a contract with Mathematica Policy Research to 

support measure development. The purpose of this contract is to take a 

holistic look at the programs and develop de novo, maintain, reevaluate 

and/or refine existing quality measures across program areas, while 

prioritizing measures that are more aligned, meaningful, outcomes-based 

and not burdensome or duplicative of currently available measures. The 

development of additional measures through this contract should better 

equip HHS to evaluate the extent to which care coordination is occurring 

and improving outcomes in capitated and fee-for- service settings.

GENERAL COMMENTS OF THE DEPARTMENT OF HEALTH AND 

HUMAN SERVICES (HHS) ON THE GOVERNMENT ACCOUNT 

ABILITY OFFICE'S (GAO) DRAFT REPORT ENTITLED : MEDICARE 

AND MEDICAID: GREATER OVERSIGHT NEEDED OF CMS'S 

DEMONSTRATION TO COORDINATE THE CARE OF DUAL- ELIGIBLE 

BENEFICIARIES (GA0-16-31)

HHS selected measures across both the capitated and MFFS models and 

across individual demonstrations to reflect differences in demonstration 

parameters, such as the eligible population or geography, as well as 

different demonstration requirements (e.g. some capitated mode l 

demonstrations require longer continuity of care periods or faster 

assessment completion). The measure framework for each model is 

designed to equip HHS to monitor progress toward the agency's goals as 

tested through both the capitated and MFFS models.

It is important to keep in mind that the demonstrations under the Initiative 

are currently being tested over a period of three years. While we have 

engaged a contractor to support potential development of measures, HHS 

Page 47 GAO-16-31 Dual-Eligible Demonstration 

Page 3
Appendix IV: Accessible Data

will want to coordinate that process to avoid duplication or development of 

measures that are not aligned with other measurement efforts for the 

Medicare-Medicaid enrollee population. In addition , the timing of 

developing and implementing such measures will reflect the anticipated 

burden and opportunity cost for federal, state, and Medicare and 

Medicaid program demonstration participants to report and analyze 

results. As a result, the inclusion of any additional new measures would 

have to be considered for potential future extension or expansion of the 

Initiative.

HHS 's responses to GAO's recommendations are below.

GAO Recommendation

To strengthen oversight of the provision of care coordination services in 

the Financial Alignment Demonstration, GAO recommends that the 

Secretary of HHS direct the Administrator of the Centers for Medicare & 

Medicaid Services (CMS) to expediently develop and require 

organizations, in the capitated model , and the states, in the MFFS model, 

to report comparable core data measures across the demonstration s that 

measure the following:

· The extent to which care coordinators are meeting with 

beneficiaries;

· The extent to which interdisciplinary care team meetings are 

occurring; and

· For MFFS states, the extent to which health risk assessments are 

completed.

HHS Response

Currently, HHS requires the completion of CAHPS beneficiary surveys in 

both the capitated and MFFS model demonstrations. The capitated model 

demonstrations use the version of the CAHPS survey that is required for 

the Medicare Advantage program, with the addition of supplemental 

questions added for the Medicare-Medicaid Financial Alignment Initiative. 

These supplemental questions include questions about care coordination 

and related topics such as ease of accessing certain types of services.

The MFFS model demonstrations use a version of the CAHPS survey 

that was based on the survey used for adult Medicaid beneficiaries and 

modified for these demonstrations, including the addition of questions that 

align with the supplemental questions added to the CAHPS survey for the 

capitated model demonstrations.

Page 48 GAO-16-31 Dual-Eligible Demonstration 
Appendix IV: Accessible Data

HHS is working to develop a set of consensus-based measures aimed at 

assessing care coordination by Medicare Advantage plans to supplement 

the data on care coordination that to date has been obtained from 

CAHPS surveys on beneficiaries' experience of care and specific care 

coordination

GENERAL COMMENTS OF THE DEPARTMENT OF HEALTH AND 

HUMAN SERVICES (HHS) ON THE GOVERNMENT ACCOUNT 

ABILITY OFFICE'S (GAO) DRAFT REPORT ENTITLED : MEDICARE 

AND MEDICAID: GREATER OVERSIGHT NEEDED OF CMS'S 

DEMONSTRATION TO COORDINATE THE CARE OF DUAL- ELIGIBLE 

BENEFICIARIES (GA0-16-31)

activities. Once available, these measures could also be used in the 

evaluation of plan s in an extension or expansion of the Financial 

Alignment Initiative, but the timeline for measurement development may 

not align with the demonstration period.

Additionally, HHS collects measures that allow comparison of health risk 

assessment completion in the two MFFS model demonstrations. The 

variances between the measures in those two demonstrations reflect 

different design elements between the two demonstrations.

GAO Recommendation

To strengthen oversight of the provision of care coordination services in 

the Financial Alignment Demonstration, GAO recommends that the 

Secretary of HHS direct the Administrator of CMS to align CMS's existing 

state-specific measures regarding the extent to which ICPs are being 

developed across the capitated and MFFS states to make them 

comparable and designate them as a core reporting requirement.

HHS Response

HHS concurs with this recommendation. We will examine the feasibility of 

designating of Individualized Care Plans (ICPs) as a core reporting 

requirement as the Initiative progresses.

HHS currently monitors timely completion ICPs for all capitated and 

MFFS model demonstrations. As noted above, this activity is measured in 

all demonstrations using a "state-specific" measure rather than a core 

measure because while it is used across the demonstration s, the 

Page 49 GAO-16-31 Dual-Eligible Demonstration 

Page 4
Appendix IV: Accessible Data

measure specifications reflect differences in the demonstration 

parameters across states.

HHS balances the need for care coordination against the need to 

measure in ways that reflect different model environments. The 

differences in the parameters of these state-specific measures do not 

impede the agency's ability to assess progress toward its goals; however, 

we will explore ways to improve comparability of measures across 

demonstrations.

Data Table for Figure 1: Dual-Eligible Beneficiaries as a Share of Medicare and 

Page 50 GAO-16-31 Dual-Eligible Demonstration 

Medicaid Enrollment and Spending, Calendar Year 2010

Percentage of 

Dual-eligible 

beneficiaries

Percentage of 

All other 

beneficiaries

Number of Medicare beneficiaries :

48.9 million

20 80

Amount of Medicare spending :

$498.9 billion

34 66

Percentage of 

Dual-eligible 

beneficiaries

Percentage of 

All other 

beneficiaries

Number of Medicaid beneficiaries :

67.2 million

14 86

Amount of Medicaid spending :

$340.5 billion

34 66

Data Tables
Appendix IV: Accessible Data

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