MEDICARE AND 

MEDICAID

Consumer Protection 

Requirements 

Affecting Dual-Eligible 

Beneficiaries Vary 

across Programs, 

Payment Systems, and 

States

Report to Congressional Requesters

December 2012

GAO-13-100

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-100, a report to 

congressional requesters

December 2012

MEDICARE AND MEDICAID 

Consumer Protection Requirements Affecting Dual- Eligible Beneficiaries Vary across Programs, 

Payment Systems, and States 

Why GAO Did This Study

Dual-eligible beneficiaries are lowincome seniors and individuals with 

disabilities enrolled in Medicare and 

Medicaid. In 2010, there were about 

9.9 million dual-eligible beneficiaries. 

Both programs have requirements to 

protect the rights of beneficiaries. 

These requirements are particularly 

important to dual-eligible beneficiaries, 

who must navigate the rules of both 

programs and generally have poorer 

health status.

To help inform efforts to better 

integrate the financing and care for 

dual-eligible beneficiaries, GAO 

(1) compared selected consumer 

protection requirements within 

Medicare FFS and Medicare 

Advantage, and Medicaid FFS and 

managed care, and (2) described 

related compliance and enforcement 

actions taken by CMS and selected 

states against managed care plans.

GAO identified consumer protections 

of particular importance to dual-eligible 

beneficiaries on the basis of expert 

interviews and literature, including 

protections related to enrollment, 

provider networks, and appeals. GAO 

reviewed relevant federal and state 

statutes, regulations, and policy 

statements, and interviewed officials 

from CMS and four states selected on 

the basis of their share of dual-eligible 

beneficiaries and use of managed care 

(Arizona, California, Minnesota, and 

North Carolina). GAO analyzed data 

on compliance and enforcement 

actions in Medicare Advantage 

and Medicaid managed care from 

January 1, 2010, through June 30, 

2012.

What GAO Found

Medicare and Medicaid consumer protection requirements vary across programs, 

payment systems—either fee-for-service (FFS) or managed care—and states. 

Within Medicare, enrollment in managed care through the Medicare Advantage 

(MA) program must always be voluntary, whereas state Medicaid programs can 

require enrollment in managed care in certain situations. For example, Arizona 

requires nearly all beneficiaries, including dual-eligible beneficiaries, to enroll in 

managed care, but in North Carolina all beneficiaries are in FFS. In addition, 

Medicare and state Medicaid programs require managed care plans to meet 

certain provider network requirements to ensure beneficiaries have adequate 

access to covered services. For example, MA plans in rural counties must have 

at least one primary care provider per 1,000 beneficiaries. Subject to federal 

parameters, states establish network requirements for their Medicaid programs. 

For example, in California every plan must have at least one primary care 

provider per 2,000 beneficiaries. Finally, Medicare and Medicaid also have 

different appeals processes that do not align with each other. The Medicare 

appeals process has up to five levels of review for decisions to deny, reduce, or 

terminate services, with certain differences between FFS and MA. In Medicaid, 

states can structure appeals processes within federal parameters. States must 

establish a Medicaid appeals process that provides access to a state fair hearing 

and Medicaid managed care plans must provide beneficiaries with the right to 

appeal to the plan, though states can determine the sequence of these appeals. 

For example, Arizona requires beneficiaries to appeal to the managed care plan 

first, while a beneficiary in Minnesota may go directly to a state fair hearing 

without an initial appeal to the managed care plan. 

Both the Centers for Medicare & Medicaid Services (CMS), the agency that 

administers the Medicare program and oversees states’ operation of Medicaid 

programs, and states took a range of compliance and enforcement actions to 

help ensure that MA and Medicaid managed care organizations complied with 

their consumer protection requirements. Between January 1, 2010, and June 30, 

2012, CMS took 546 compliance actions against MA organizations on the issues 

GAO identified as generally related to consumer protections of particular 

importance to dual-eligible beneficiaries. Compliance actions included notices, 

warning letters, and requests for corrective action plans (CAP). During the same 

period, CMS took 22 enforcement actions against MA organizations, including 

the imposition of 17 civil money penalties—nearly all for late or inaccurate 

marketing materials. For five serious violations, CMS suspended enrollment into 

the MA plan and suspended the MA plan’s ability to market to beneficiaries. 

Similarly, states used notices, letters, fines, and CAPs to improve Medicaid 

managed care plan compliance with Medicaid consumer protection requirements. 

During the same period, Arizona, California, and Minnesota required managed 

care plans to undertake 91 corrective action plans, 52 percent of which related to 

problems with plans’ appeals and grievances processes.

In commenting on a draft of the report, the Department of Health and Human 

Services noted that the report was an accurate assessment of the programs we 

reviewed. View GAO-13-100. For more information, 

contact Kathleen King at (202) 512-7114 or 

kingk@gao.gov.
Page i GAO-13-100 Protections for Dual Eligibles

Letter 1 

Background 6

Medicare and Medicaid Consumer Protection Requirements Vary 

across Programs, Payment Systems, and States 15

CMS and States Used a Range of Actions to Help Ensure 

Organizations Comply with Medicare and Medicaid Consumer 

Protection Requirements 31

Agency Comments 38

Appendix I Information on Selected States’ Medicaid Programs 41

Appendix II Description of Selected Federal and State Requirements 43

Appendix III Comments from the Department of Health and Human 

Services 67

Appendix IV GAO Contact and Staff Acknowledgments 69

Tables

Table 1: Selected CMS Compliance Actions against Medicare 

Advantage (MA) Organizations, January 1, 2010–June 30, 

2012 33

Table 2: CMS Enforcement Actions against Medicare Advantage 

(MA) Organizations, January 1, 2010–June 30, 2012 34

Table 3: Selected Requirements in Medicare and Medicaid FFS 43

Table 4: Selected Requirements in Medicare Advantage (MA) and 

Medicaid Managed Care 51

Figure

Figure 1: Number of and Reasons for Corrective Action Plans 

(CAP) Required by Selected States, January 1, 2010– 

June 30, 2012 37

Contents 
Page ii GAO-13-100 Protections for Dual Eligibles

Abbreviations

ADL activities of daily living

ALJ administrative law judge

CAM Compliance Activity Module

CAP corrective action plan

CMP civil money penalties

CMS Centers for Medicare & Medicaid Services

D-SNP dual-eligible special needs plan

FFS fee-for-service 

FTE full-time equivalent 

HCBS home- and community-based services

IADL instrumental activities of daily living

MA Medicare Advantage

MMA Medicare Prescription Drug, Improvement, and

 Modernization Act of 2003

MSC+ Minnesota Senior Care Plus

MSHO Minnesota Senior Health Options

PACE Program for All-Inclusive Care for the Elderly 

PCCM primary care case management

QIC qualified independent contractor

SNF skilled nursing facility

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Page 1 GAO-13-100 Protections for Dual Eligibles

United States Government Accountability Office

Washington, DC 20548

December 5, 2012

Congressional Requesters

About 9.9 million low-income seniors and persons with disabilities were

enrolled in both the Medicare and Medicaid programs in 2010.1 Known as 

“dual-eligible beneficiaries,” many of these individuals have significantly 

more health care needs than other beneficiaries in either program. In 

fiscal year 2008, dual-eligible beneficiaries accounted for about 

17 percent of the Medicare population but 29 percent of Medicare 

spending,2 and 16 percent of the Medicaid population but about 

35 percent of Medicaid spending.3 Health care spending for dual-eligible 

beneficiaries in 2010 exceeded $300 billion.4

Both Medicare and Medicaid can be provided in a fee-for-service (FFS) or 

managed care payment system. Under FFS, healthcare providers are 

paid on a per-service basis. Under managed care, either the Centers for 

Medicare & Medicaid Services (CMS), the agency that administers 

Medicare, or the state Medicaid agency contracts with managed care 

organizations to provide covered health care services in return for a fixed 

monthly payment per enrollee. Under Medicare managed care, private 

 

1

Medicare Payment Advisory Committee (MEDPAC), Report to Congress: Medicare and 

the Health Care Delivery System (Washington, D.C.: June 2012). Medicare is the federal 

health insurance program for seniors, certain individuals with disabilities, and individuals 

with end-stage renal disease. Medicaid is the joint federal-state health care program that 

provides health care coverage for certain categories of low-income adults and children. 

The estimated number of dual-eligible beneficiaries includes both those who qualified for 

full Medicaid benefits (“full” duals) and those who received only assistance with Medicare 

premiums and cost sharing (“partial” duals). About 80 percent of dual-eligible beneficiaries 

were full duals. In this report, unless otherwise stated, the dual-eligible beneficiaries to 

which we refer are those entitled to full Medicaid benefits.

2

MEDPAC, A Data Book: Health Care Spending and the Medicare Program (Washington, 

D.C.: June 2012). Spending is for dual-eligible beneficiaries in Medicare fee-for-service 

(FFS) only. Under a FFS system, providers are paid on a per-service basis.

3

Medicaid and CHIP Payment and Access Commission (MACPAC), Report to the 

Congress: The Evolution of Managed Care in Medicaid (Washington, D.C.: June 2012). 

These data include both full and partial dual-eligible beneficiaries.

4

Melanie Bella, Director, the Medicare-Medicaid Coordination Office, Centers for Medicare 

& Medicaid Services (CMS), Examining Medicare and Medicaid Coordination for Dual 

Eligibles, testimony before the Special Committee on Aging, 112th Cong., July 18, 2012. 

Total includes spending for both full and partial dual-eligible beneficiaries.

 
 

Page 2 GAO-13-100 Protections for Dual Eligibles

organizations offer health plans through the Medicare Advantage 

program. These plans are referred to as Medicare Advantage, or MA, 

plans.

Whether within the context of FFS, managed care, or both, dual-eligible 

beneficiaries navigate both the Medicare and Medicaid programs to 

access services. Under Medicare, dual-eligible beneficiaries have access 

to coverage for most acute care services, such as care provided by 

physicians or inpatient hospitals, postacute skilled nursing facility (SNF) 

care, and prescription drugs. Under state Medicaid programs, dualeligible beneficiaries who qualify also have access to coverage for longterm nursing facility care and home- and community-based services. 

These beneficiaries may also qualify for payment of Medicare premiums 

and cost sharing.5

Both the Medicare and Medicaid programs have consumer protection 

requirements to help ensure that beneficiaries have access to health care 

providers and services covered under the programs. Such protections 

generally apply to all beneficiaries, but some are of particular importance 

to dual-eligible beneficiaries. Dual-eligible beneficiaries may have a 

greater need for health care services because of increased physical and 

mental health needs. Further, dual-eligible beneficiaries, because they 

are in both programs, face navigating the different requirements in the 

two separate programs. For instance, a dual-eligible beneficiary who 

wants to appeal a denial of benefits must first determine which program 

denied the benefit, because the entity to which he or she needs to appeal 

and the time frames they have for making that appeal may differ 

depending on whether the service was covered by Medicare or Medicaid, 

or which program has primary responsibility for payment.

To integrate benefits more effectively under the Medicare and Medicaid 

programs, and to improve the coordination between the federal 

government and states to ensure that dual-eligible beneficiaries get 

access to the items and services to which they are entitled, the Patient 

Protection and Affordable Care Act established the Federal Coordinated 

Health Care Office (also known as the Medicare-Medicaid Coordination 

 

5

In general, Medicare beneficiaries pay monthly premiums and a portion of their health 

care costs as coinsurance or deductibles. In the case of dual-eligible beneficiaries, their 

state Medicaid program covers some or all of these costs.
 

Page 3 GAO-13-100 Protections for Dual Eligibles

Office) within CMS.6

As CMS’s integrated care demonstrations proceed, you were interested in 

understanding the requirements related to consumer protections of 

particular importance to dual-eligible beneficiaries. Such an 

understanding will help policymakers assess the demonstrations and any 

future integration efforts. You were also interested in information on 

enforcement tools available to CMS and states to ensure that managed 

care organizations comply with these requirements, as well as the recent 

compliance and enforcement actions taken by CMS and states against 

Medicare and Medicaid managed care plans. This study

CMS administers the Medicare program as well as 

oversees the design and operation of state Medicaid programs. Goals for 

the Medicare-Medicaid Coordination Office include increasing dualeligible beneficiaries’ understanding of and satisfaction with coverage 

under Medicare and Medicaid and aligning the requirements between the 

two programs. To support these efforts, CMS is working with states to 

develop demonstrations to integrate Medicare and Medicaid for dualeligible beneficiaries. Key objectives are to improve beneficiary 

experience in accessing care, improve quality, eliminate cost shifting 

between Medicare and Medicaid, and achieve cost savings for states and 

CMS. Twenty-six states have proposed demonstrations to integrate the 

care of dual-eligible beneficiaries, starting in either 2013 or 2014.

1. compares selected consumer protection requirements in Medicare 

FFS, Medicare Advantage, Medicaid FFS, and Medicaid managed 

care; and

2. describes recent compliance and enforcement actions generally 

related to these consumer protections taken by the federal 

government and selected state governments against Medicare 

Advantage plans and Medicaid managed care plans.

To compare consumer protections associated with Medicare and 

Medicaid, we identified and defined categories of consumer protections 

that are particularly important to dual-eligible beneficiaries on the basis of 

a review of the literature and interviews with researchers knowledgeable 

about the experiences of dual-eligible beneficiaries. We identified and 

 

6

Pub. L. No. 111-148, § 2602. 124 Stat. 119, 315 (2010).
 

Page 4 GAO-13-100 Protections for Dual Eligibles

defined six such categories: enrollment choice,7 continuity of care, 

provider networks, marketing, scope of home health and nursing facility 

services,8 and appeals.9 With respect to continuity of care, provider 

networks, and marketing, we reviewed those requirements only with 

respect to their application in managed care.10 We reviewed relevant 

federal statutes, regulations, and policy statements and interviewed 

federal officials to describe requirements in Medicare FFS, Medicare 

Advantage,11 Medicaid FFS, and Medicaid managed care plans.12

 

7

For enrollment choice, we reviewed federal requirements relating to (1) a beneficiary’s 

choice between mandatory and voluntary enrollment in Medicare Advantage (MA) and 

Medicaid managed care, (2) the ability of beneficiaries to select primary care providers, 

(3) the ability of beneficiaries to switch between managed care and FFS, and (4) informing 

and counseling beneficiaries on enrollment choices.

8

We focused on the scope of the nursing facility and home health benefits, among all 

benefits, specifically because both Medicare and Medicaid cover these services, though 

under different circumstances, and a disproportionately large number of dual-eligible 

beneficiaries use these services. In this report, we limited our review to federal 

requirements related to circumstances under which beneficiaries can obtain nursing 

facility or home health services under Medicare or Medicaid. 

9

We reviewed federal requirements related to certain aspects of appeals defined as 

(1) how beneficiaries are notified of their right to appeal a denial of benefits, (2) the 

appeals process for when beneficiaries have a benefit denied, reduced, or terminated, 

(3) whether there is continuity of benefits during the appeals process, and (4) whether 

beneficiaries are required to receive help when navigating appeal options.

10For purposes of this report, we defined continuity of care as federal requirements 

relating to (1) the ability of beneficiaries to continue seeing historical providers not in the 

plan’s network when transitioning to managed care or between plans and (2) whether 

beneficiaries have access to assistance with coordination of care options. For provider 

networks, we reviewed federal requirements related to (1) the adequacy of the number 

and types of providers and (2) coverage of out-of-network services. With respect to 

marketing, we reviewed federal requirements addressing (1) whether marketing materials 

are permitted to promote enrollment and (2) the readability, reading level, and translation 

of marketing materials.

11Under MA, Medicare beneficiaries may choose to have their benefits provided by private 

entities that offer plans under contract with CMS. In this report we only looked at 

requirements applicable to MA organizations that offer one type of plan: coordinated care 

plans. We refer to these entities as “MA organizations” or “MA plans.” Coordinated care 

plans include traditional managed care plans such as health maintenance organizations, 

preferred provider organizations, and provider service organizations. As this report is for 

consideration of future integrated plan models that coordinate care for dual-eligible 

beneficiaries, we do not include other types of MA plans such as private fee-for-service 

plans or Medicare savings accounts. We also did not consider requirements that may 

apply to the Medicare Part D prescription drug benefit specifically.
 

Page 5 GAO-13-100 Protections for Dual Eligibles

We also selected four states for review to provide illustrative examples of 

the variation in consumer protection requirements among state Medicaid 

programs. We chose the four states to achieve a range in terms of the 

share of dual-eligible beneficiaries in each state’s Medicaid population 

and each state’s overall use of managed care within Medicaid. The four 

states we selected were Arizona, California, Minnesota, and North 

Carolina. (See app. I for information on each state’s Medicaid program.)

For each of these states, we focused on state requirements as related to 

the federal requirements summarized above. To describe these state 

requirements, we interviewed state Medicaid officials, and reviewed 

relevant state statutes and regulations, state contracts with health plans, 

and policy manuals.

To describe recent compliance and enforcement actions generally related 

to the six categories of consumer protections taken by the federal 

government and selected state governments, we interviewed CMS 

officials about federal compliance and enforcement actions the agency 

can take against MA plans or Medicaid managed care plans, respectively. 

For the Medicare program, we also analyzed data from CMS’s 

Compliance Activity Module (CAM) for the period January 1, 2010, 

through June 30, 2012. The CAM includes information on all federal 

compliance actions taken against MA plans. To assess the reliability of 

the CAM data, we interviewed CMS staff and reviewed the system 

documentation. We determined that the data were sufficiently reliable for 

the purposes of this report. In addition, we analyzed the MA enforcement 

letters posted on the CMS website. To describe recent state compliance 

and enforcement actions in the Medicaid program, we interviewed 

Medicaid officials in each of the same four states. We received 

information from those states with managed care programs on the 

numbers and types of compliance and enforcement actions taken against 

Medicaid managed care plans, as well as the general reasons for these 

actions.

The categories of consumer protections we examined in both Medicare 

and Medicaid are generally applicable to all beneficiaries in these two 

programs, not just dual-eligible beneficiaries. We note those cases where 

specific protections for dual-eligible beneficiaries are different than for 

 

12For purposes of this report, we only reviewed requirements that are applicable to 

managed care plans that offer the full range of Medicaid benefits. Accordingly, we did not 

address requirements that may apply to limited benefit plans which may provide only a 

single service, such as dental or behavioral health.
 

Page 6 GAO-13-100 Protections for Dual Eligibles

other beneficiaries in Medicare or Medicaid. We did not evaluate the 

adequacy of the consumer protections we examined in terms of achieving 

their intended goal. The data on compliance and enforcement actions, 

both at the federal and state level, allowed us to report actions taken in 

response to issues that were generally related to a broad category of the 

consumer protection requirements we identify in this report and that 

affected or could have affected any Medicare or Medicaid beneficiary. We 

were unable to identify those actions that addressed the specific type of 

consumer protection requirements discussed in this report or that only 

affected dual-eligible beneficiaries. We did not evaluate the adequacy of 

the federal or state oversight systems or the specific performance of 

managed care plans in either program.

We conducted our work from June 2012 to December 2012 in 

accordance with all sections of GAO’s Quality Assurance Framework that 

are relevant to our objectives. The framework requires that we plan and 

perform the engagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

believe that the information and data obtained, and the analysis 

conducted, provide a reasonable basis for any findings and conclusions in 

this product.

Dual-eligible beneficiaries—individuals eligible for both Medicare and 

Medicaid—generally fall into two categories: low-income seniors (those 

aged 65 years old and over) and individuals with disabilities under the 

age of 65 years. Requirements to protect the rights of beneficiaries under 

both programs are of particular importance to dual-eligible beneficiaries 

because of their generally greater health care needs. Several efforts have 

been made in the past to better integrate care for dual-eligible 

beneficiaries.

Medicare is a federally financed program that in 2011 provided health 

insurance coverage to nearly 49 million beneficiaries—people age 65 and 

older, certain individuals with disabilities, and those with end-stage renal 

disease. In Medicare FFS, beneficiaries may choose their health care 

providers among any enrolled in Medicare. However, CMS also contracts 

with MA organizations, private entities that offer managed care plans to 

Medicare beneficiaries. As of 2011, about 25 percent of Medicare 

beneficiaries were enrolled in a MA plan.

Background 

Medicare
 

Page 7 GAO-13-100 Protections for Dual Eligibles

As part of the agency’s oversight of MA plans, CMS responds to 

complaints from beneficiaries and other parties, conducts surveillance, 

and conducts compliance audits. CMS responds to complaints from 

beneficiaries, health care providers, and other parties that come into the 

agency through a 1-800-MEDICARE phone line. It is through this 

mechanism that CMS generally resolves issues that are beneficiaryspecific.13 CMS conducts surveillance by having routine discussions with 

managed care organizations, monitoring plan-submitted data, and 

tracking and monitoring complaint rates by MA plan and complaint

category. CMS uses compliance audits to assess whether a managed 

care organization’s operations are consistent with federal laws, 

regulations, and CMS policies and procedures. Audits typically involve a 

combination of desk reviews of documents submitted by MA 

organizations, and, at CMS’s discretion, site visits.

Medicaid is a joint federal-state program that finances health care 

coverage for certain low-income individuals.14

States must operate their Medicaid programs within broad federal 

parameters. While complying with these federal requirements, however, 

states have the flexibility to tailor their programs to the populations they 

serve, including the imposition of additional protections for beneficiaries. 

For example, states generally are required by federal Medicaid law to 

cover certain benefits, while other benefits may be included at a state’s 

option. Subject to CMS approval, states may choose to operate a portion 

of or their entire Medicaid programs as FFS or managed care. With 

To receive federal 

matching funds for services provided to Medicaid beneficiaries, each 

state must submit a state Medicaid plan for approval by CMS. The state 

Medicaid plan defines how the state will operate its Medicaid program, 

including which populations and services are covered.

 

13MA organizations are required to respond to grievances, which are complaints that 

come directly to the MA organization from beneficiaries. CMS oversees MA organizations’ 

grievance processes through the review of plan-submitted data.

14Under federal law, states must cover certain populations such as low-income children, 

pregnant women, and individuals with disabilities under their Medicaid programs. Subject 

to federal approval, states also have the option of extending Medicaid coverage to 

additional populations, beyond these mandatory categories. 

Medicaid
 

Page 8 GAO-13-100 Protections for Dual Eligibles

respect to managed care, states vary widely in terms of the scope of 

services they provide and the populations they enroll.15

States have certain options when considering whether to enroll Medicaid 

beneficiaries into managed care, including whether enrollment is 

voluntary or mandatory. States may obtain the authority to mandatorily 

enroll Medicaid beneficiaries into managed care plans with CMS approval 

of a state plan amendment. However, under federal law, states cannot 

require certain categories of beneficiaries, including dual-eligible 

beneficiaries, to mandatorily enroll under this authority.16 Alternatively, 

states may obtain the authority to enroll Medicaid beneficiaries, including 

dual-eligible beneficiaries, into managed care through the approval of two 

types of Medicaid waivers:17

• Section 1115 of the Social Security Act provides the Secretary of 

Health and Human Services with the authority to grant states waivers 

of certain federal Medicaid requirements and allow costs that would 

not otherwise be eligible for federal funds for the purpose of 

demonstrating alternative approaches to service delivery.18

• Under a 1915(b) waiver, the Secretary may waive certain Medicaid 

requirements, allowing states to operate a managed care program to 

the extent it is cost-effective and consistent with the purposes of the 

program.19

Historically, states have been more likely to require beneficiaries who are 

not dually eligible, such as children and families, to enroll in Medicaid 

 

15States commonly contract with managed care organizations to provide the full range of 

covered Medicaid services to certain enrollees. States may also rely on other 

arrangements, such as primary care case management programs in which enrollees are 

assigned to a primary care provider who is responsible for providing primary care services 

and for coordinating other needed health care services.

16See 42 U.S.C. § 1396u-2(a)(1)-(2). 

17States must comply with the specific terms and conditions of an approved waiver, which 

in some cases may be different than the federal requirements that would otherwise apply.

18See 42 U.S.C. § 1315(a).

19See 42 U.S.C. § 1396n(b). Under these waivers, the Secretary has the authority to 

waive the requirement that Medicaid beneficiaries can obtain services from any qualified 

Medicaid provider, thereby allowing states to limit beneficiaries’ choice to a network of 

providers.
 

Page 9 GAO-13-100 Protections for Dual Eligibles

managed care plans. However, more recently states are beginning to 

move dual-eligible beneficiaries into managed care plans as well. In 2010, 

about 9.3 percent of dual-eligible beneficiaries were enrolled in Medicaid 

managed care plans.20

Another type of waiver, the 1915(c) waiver, is the primary means by 

which states provide home- and community-based services (HCBS) to 

Medicaid beneficiaries. Under a 1915(c) waiver, states can provide HCBS 

that may not be available under the state’s Medicaid plan to beneficiaries 

that would, if not for the services provided under the waiver, require 

institutional care.21

At the federal level, CMS oversight of state Medicaid programs includes 

monitoring the programs and providing guidance to states. States must 

provide assurances to CMS that they have mechanisms in place to 

ensure that any managed care organization with which the state contracts 

complies with federal regulations in order to obtain approval for enrolling 

Medicaid beneficiaries into managed care. Though CMS is not a party to 

the contract, states are required to obtain CMS approval of the contracts 

between states and managed care organizations in order to qualify for 

federal funding. States administer the day-to-day operations of their 

Medicaid programs. At the state level, requirements for Medicaid 

managed care plans are often included as part of the contract between 

the state and the managed care plan and may derive from federal or state 

law, regulations, or policies. States generally oversee managed care 

plans through a combination of informal and formal monitoring that may 

Home health care is one of the services that states 

may provide under a 1915(c) waiver or through the state’s Medicaid plan, 

in addition to other services such as respite care, personal care, and case 

management.

 

20Marsha Gold, Gretchen Jacobson, and Rachel Garfield, “There is Little Experience and 

Limited Data to Support Policy Making on Integrated Care for Dual Eligibles,” Health 

Affairs, vol. 31, no. 6 (June 2012). This percentage does not include dual-eligible 

beneficiaries enrolled in managed care plans that provide a single or limited set of 

services, such as dental or behavioral health.

21States may also receive CMS approval for a state plan amendment to provide access to 

home- and community-based services to Medicaid beneficiaries under section 1915(i) 

authority or section 1915(k) authority. Section 1915(i) authority provides states with the 

option to furnish home- and community-based services to Medicaid beneficiaries who do 

not meet institutional level-of-care requirements. Section 1915(k) allows states to cover 

home- and community-based attendant services for Medicaid beneficiaries who would 

otherwise qualify for institutional care.
 

Page 10 GAO-13-100 Protections for Dual Eligibles

include regular meetings, reviews of plan-submitted reports, audits, and 

financial reviews.22

Medicare and Medicaid have a number of requirements intended to 

protect the rights of beneficiaries, some of which are of particular 

importance to dual-eligible beneficiaries.

Medicare and Medicaid have requirements that specify the circumstances 

under which a beneficiary may be compelled to enroll in a managed care 

plan instead of obtaining services through the FFS program. How 

beneficiaries are enrolled in managed care, for example whether the 

enrollment is mandatory or voluntary, could have implications for dualeligible beneficiaries who may have more serious health care needs and 

who, because of cognitive impairments, may require assistance in 

understanding their options or the implications of their choices.

In general, federal law and regulations do not specifically require MA 

plans or Medicaid managed care plans to cover services provided by a 

beneficiary’s previous providers if that provider is not in the plan’s network 

when a beneficiary first enrolls in a plan or switches plans. There are 

limited circumstances when managed care plans are required to cover 

such services during a transition period. Medicare and Medicaid also 

have certain federal requirements for managed care plans to ensure 

coordination of at least some services for beneficiaries. Dual-eligible 

beneficiaries often have complex health care needs and, therefore, may 

see several different providers. Accordingly, continuing relationships with 

providers, as well as ensuring coordination of care, is of particular 

importance to this population.23

 

22As an illustration, federal regulations require that states have procedures in effect for 

monitoring the following: (1) recipient enrollment and disenrollment, (2) processing of 

grievances and appeals, (3) violations subject to intermediate sanctions, (4) violations of 

conditions of the receipt of federal funding, and (5) all other contractual provisions, as 

appropriate. 42 C.F.R. § 438.66.

23While our discussion of continuity of care focuses on the period of transition as a 

beneficiary changes managed care plans or payment systems, continuing relationships 

with providers and coordinating care are also important for dual-eligible beneficiaries in 

FFS given the complex array of services they may receive from several different 

providers.

Selected Consumer 

Protection Requirements

Enrollment Choice

Continuity and Coordination of 

Care 
 

Page 11 GAO-13-100 Protections for Dual Eligibles

Medicare and Medicaid have requirements for managed care plans to 

maintain provider networks that ensure beneficiaries can access a range 

of health care providers and obtain services in a timely manner.24 Within 

Medicaid managed care, provider participation problems have been 

specifically noted for specialty and dental care.25

Medicare and Medicaid have requirements about the type and format of 

materials provided to beneficiaries to promote enrollment into a managed 

care plan or communicate information about coverage and costs. 

Inappropriate marketing practices have in the past led some Medicare 

beneficiaries to enroll in MA plans in which they had not intended to enroll 

or that did not meet their health care needs. Inappropriate marketing may 

include activities such as providing inaccurate information about covered 

benefits and conducting prohibited marketing practices, such as door-todoor marketing without appointments and providing potential beneficiaries 

with meals or gifts of more than nominal value to induce enrollment.

Medicare and Medicaid have requirements about how beneficiaries can 

qualify for certain services and the scope of coverage provided. 

According to CMS, two services where coverage differences between 

Medicare and Medicaid are particularly problematic for dual-eligible 

beneficiaries are nursing facility services and home health care. While 

both programs cover these benefits, they differ in terms of how a dualeligible beneficiary can qualify for the benefit and the scope of the 

coverage provided. As a result, there can be cost-shifting between the 

programs.

Nursing Facility Services. Medicare and Medicaid both set requirements 

for the conditions a beneficiary must meet to become eligible for coverage 

of nursing facility services. Medicare’s coverage of nursing facility care is 

limited to 100 days of posthospital skilled nursing facility (SNF) services.26

 

24Although we focus on provider networks in relation to managed care plans, studies have 

found differences between provider participation in Medicare FFS and Medicaid FFS. See 

MACPAC, Report to the Congress on Medicaid and CHIP (Washington, D.C.: March 

2011), and Sandra Decker, “In 2011 Nearly One-Third of Physicians Said They Would Not 

Accept New Medicaid Patients, But Rising Fees May Help,” Health Affairs, vol. 31, no. 8 

(August 2012).

25Kathleen Gifford et al., A Profile of Medicaid Managed Care Programs in 2010: Findings 

from a 50-State Survey, The Henry J. Kaiser Family Foundation (Washington, D.C.: 

September 2011). 

2642 U.S.C. § 1395d(2).

Provider Networks

Marketing Materials 

Scope of Services 
 

Page 12 GAO-13-100 Protections for Dual Eligibles

SNF services may only be provided in an inpatient setting and include 

skilled nursing (such as intravenous injections, administration of 

prescription medications, and administration and replacement of 

catheters); room and board; and physical, occupational, and speech 

language therapies. In contrast, Medicaid’s coverage of nursing facility 

services includes skilled nursing, rehabilitation needed due to injury, 

disability or illness, and long-term care.27 Under federal law, state 

Medicaid programs must cover nursing facility services for qualified 

individuals age 21 or over.28

Medicare beneficiaries may continue to need nursing facility care after 

their Medicare benefit is exhausted. In such instances beneficiaries may 

pay privately or use any long-term care insurance they may have. In 

certain circumstances, the beneficiaries may also be eligible for Medicaid 

if, for example, they spend enough of their resources to meet Medicaid 

eligibility rules in their state. If the beneficiary does become dually eligible, 

the beneficiary may then qualify for Medicaid coverage of nursing facility 

services, beyond what Medicare covers.

All states have chosen to also offer the 

optional benefit of nursing facility services for individuals under 21 years 

of age.

Overlapping coverage of nursing facility care in Medicare and Medicaid 

provides nursing facilities with a financial incentive to transfer dual-eligible 

beneficiaries back to hospitals when nursing facility care is being paid for 

by Medicaid.29

 

27Long-term care consists of health-related care and services above the level of room and 

board that are not available in the community and are needed regularly due to a mental or 

physical condition.

By transferring dual-eligible beneficiaries from a nursing 

facility to a hospital, the nursing facility will qualify for what is generally a 

higher payment under Medicare when beneficiaries are readmitted and 

require skilled nursing services. One study of hospitalizations among 

dually eligible nursing facility residents in 2005 found that approximately 

45 percent of hospitalizations among beneficiaries receiving Medicare 

2842 U.S.C. § 1396a(a)(10)(A).

29CMS, Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents

(Mar. 15, 2012).
 

Page 13 GAO-13-100 Protections for Dual Eligibles

SNF services or Medicaid nursing facility services were potentially 

avoidable.30

Home Health Care. Medicare and Medicaid both set requirements for how 

a beneficiary can qualify for home health services, and state Medicaid 

programs further refine these requirements for Medicaid coverage. 

Medicare’s home health benefit covers skilled nursing services, physical 

therapy, speech-language pathology, occupational therapy, medical 

social services, and medical equipment.31 State Medicaid programs are 

required to cover home health services for certain categories of 

beneficiaries, including those who are entitled to nursing facility services 

under the state plan.32 Under Medicaid’s home health benefit, states must 

cover nursing services, home health aide services, and medical supplies 

and equipment for use in the home. States may also choose to cover 

physical, occupational, or speech therapy under this benefit.33 The 

Medicare Payment Advisory Commission reported that some states have 

tried to increase the proportion of home health services for dual-eligible 

beneficiaries covered by Medicare, rather than Medicaid. For instance, 

some states have required home health agencies to show proof of a 

Medicare denial for home health services for a dual-eligible beneficiary 

before covering the service under Medicaid.34

Additionally, states also have the option of covering home- and 

community-based services, including home health care and personal care 

services, for beneficiaries under different authorities. Personal care is 

designed to provide assistance inside or outside the home with activities 

 

30Edith Walsh et al., Cost Drivers for Dually Eligible Beneficiaries: Potentially Avoidable 

Hospitalizations from Nursing Facility, Skilled Nursing Facility, and Home and Community 

Based Services Waiver Programs, prepared for the Centers for Medicare & Medicaid 

Services (Washington, D.C.: August 2010).

31Medicare may also cover home health aide services on a part-time or intermittent basis 

if they are needed as support services for skilled nursing services.

3242 U.S.C. § 1396a(a)(10)(D). 

3342 C.F.R. § 440.70.

34MEDPAC, Report to the Congress: New Approaches in Medicare, (Washington, D.C.: 

June 2004).
 

Page 14 GAO-13-100 Protections for Dual Eligibles

of daily living (ADL), instrumental activities of daily living (IADL), 

supervision or guidance with ADLs, or a mix of those.35

Beneficiaries’ ability to contest a determination that their benefits will be 

denied, reduced, or terminated is a basic right provided for both Medicare 

and Medicaid beneficiaries.36 The appeals process that a beneficiary 

must follow depends on whether the benefit being contested is a 

Medicare or Medicaid benefit.

For many years, efforts have been made to improve coordination of 

services for dual-eligible beneficiaries. One of these efforts is the 

Program of All-Inclusive Care for the Elderly (PACE), a provider-based 

program that serves frail, elderly individuals with the goal of keeping them 

in the community rather than in long-term care institutions as long as 

medically and socially feasible. PACE is covered under Medicare, and 

states may choose to cover the program as an optional benefit under 

Medicaid. According to CMS, nearly 94 percent of 2011 enrollees in 

PACE were dual-eligible beneficiaries. Dual-eligible beneficiaries may 

enroll in PACE if they are age 55 or older, are certified by their state as 

being eligible for coverage of nursing facility services, and live in a PACE 

program’s service area. PACE providers receive separate capitation 

payments from Medicare and their state’s Medicaid program, which 

represent total reimbursement for all the services they provide, including 

primary, acute, and long-term care; behavioral health services; 

prescription drugs; and end-of-life care planning.37

 

35ADLs generally refer to activities such as eating, bathing, using the toilet, dressing, 

walking across a small room, and getting into or out of a chair or bed. IADLs are 

necessary for an individual to live independently in the community and include activities 

such as preparing meals, managing money, shopping for groceries or personal items, 

performing housework, using a telephone, doing laundry, getting around outside the 

home, and taking medications.

The majority of PACE 

programs provide adult day care, where enrollees receive therapy, 

medical care, and social support from an interdisciplinary team. As of 

36Both Medicare and Medicaid have standard appeals processes and expedited appeals 

processes in cases of urgent need. In this report, we only describe the standard Medicare 

and Medicaid appeals processes.

37A PACE benefit program must include all Medicare covered items and services, 

Medicaid covered items and services as determined by the state, and other services 

determined necessary by an interdisciplinary team to improve the participant’s overall 

health status.

Appeals 

Programs to Integrate 

Medicare and Medicaid for 

Dual-Eligible Beneficiaries
 

Page 15 GAO-13-100 Protections for Dual Eligibles

January 2012, 84 PACE sites in 29 states enrolled about 21,000 

beneficiaries.38

Dual eligible special needs plans (D-SNP), first authorized by the 

Medicare Prescription Drug, Improvement, and Modernization Act of 2003 

(MMA),39 are a more recent attempt to integrate care for dual-eligible 

beneficiaries.40 D-SNPs are a type of MA plan exclusively for dual-eligible 

beneficiaries. As of 2011, about 9 percent of dual-eligible beneficiaries 

nationally were enrolled in a D-SNP, and another 10 percent were 

enrolled in other MA plans.41 MA organizations seeking to offer D-SNPs 

must contract with the relevant state Medicaid agency.42

There are key differences in enrollment choice requirements across the 

Medicare and Medicaid programs, the FFS and managed care payment 

systems and the selected states. Certain consumer protection 

requirements are unique to managed care plans in areas such as 

continuity and coordination of care and provider networks. Other 

consumer protection requirements also differ across the programs, 

payment systems, and selected states.

 

38National PACE Association, “PACE in the States” (Alexandria, Va.: September 2012).

39The MMA authorized a type of MA plan referred to as a special needs plan to address 

the unique needs of certain categories of Medicare beneficiaries, including dual-eligibles. 

Pub. L. No. 108-173, § 231, 117 Stat. 2066, 2207 (2003) (codified, as amended, at 

42 U.S.C. § 1395w-21(a)(2)(A)(ii)). SNPs, including D-SNPs, have been reauthorized 

several times since their establishment was first authorized in 2003.

40Dual-eligible beneficiaries may also choose to enroll in other types of special needs 

plans 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.

41See GAO, Medicare Special Needs Plans: CMS Should Improve Information Available 

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

42Effective January 1, 2010, all MA organizations offering a new D-SNP must have a 

contract with the state Medicaid agency to operate within a state. Existing D-SNPs that do 

not have a contract may continue to operate through the 2012 contract year but may not 

expand service areas during this period. 42 C.F.R. § 422.107(b)(d). If a D-SNP contracts 

with a state Medicaid agency, the D-SNP receives capitation payments from both 

Medicare and Medicaid. 

Medicare and 

Medicaid Consumer 

Protection 

Requirements Vary 

across Programs, 

Payment Systems, and 

States 
 

Page 16 GAO-13-100 Protections for Dual Eligibles

Within Medicare, enrollment in managed care is always voluntary, 

whereas state Medicaid programs can require enrollment in managed 

care in certain situations. In Medicare, beneficiaries—including dualeligible beneficiaries—are enrolled in FFS unless they select an MA plan. 

In general, beneficiaries may select an MA plan voluntarily when they first 

become eligible for Medicare, during an annual coordinated election 

period,43 or during special election periods, such as when an MA plan’s 

contract is terminated or discontinued in the area where a beneficiary 

lives or when CMS determines that beneficiaries meet exceptional 

conditions.44 CMS has created a special election period for dual-eligible 

beneficiaries, and accordingly, they may opt into MA or FFS or change 

MA plans at any time. They generally may select any MA plan, including 

D-SNPs, that serves the area where they live, though the number of plans 

available varies by area. MA plans may limit the providers from whom 

Medicare beneficiaries, including dual-eligible beneficiaries, may receive 

covered services,45 whereas beneficiaries in Medicare FFS may receive 

covered services from any provider enrolled in Medicare.46

In contrast, a Medicaid beneficiary’s ability to choose to remain in FFS or 

enroll in managed care depends on how the state structures its Medicaid 

program. As an alternative to FFS, states can structure their Medicaid 

programs to require enrollment in managed care, or allow beneficiaries to 

choose between the two payment systems. Unlike in Medicare, states 

can mandatorily enroll beneficiaries, including dual-eligible beneficiaries, 

into Medicaid managed care with CMS approval of a section 1115 

 

43The annual coordinated election period extends from October 15 through December 7 of 

each year.

44During these times, beneficiaries may also switch between managed care plans. 

Beneficiaries may also disenroll from MA plans and enroll in FFS at any time from 

January 1 through February 14 of each year. 42 U.S.C. §§ 1395w-21(a), (e), 42 C.F.R. 

§ 422.62.

45An MA organization may specify the network of providers from whom beneficiaries may 

obtain services if the organization meets certain criteria such as ensuring that covered 

services are available and accessible within the plan’s service area. 42 U.S.C. § 1395w22(d), 42 C.F.R. § 422.112(a). There are certain circumstances, however, when MA plans 

must provide coverage of out-of-network services such as for emergency or urgently 

needed services. 42 C.F.R. § 422.100(b).

4642 U.S.C. § 1395cc(a). A provider may be qualified to receive Medicare reimbursement 

for services rendered to a beneficiary if that provider enters into an agreement with CMS 

that meets applicable standards.

Notable Differences Exist 

in Requirements for 

Enrollment Choice across 

the Programs, Payment 

Systems, and Selected 

States 
 

Page 17 GAO-13-100 Protections for Dual Eligibles

demonstration waiver or section 1915(b) waiver.47 States mandating 

enrollment into a managed care plan generally must provide beneficiaries 

a choice of at least two plans, except in specific circumstances, such as 

in rural areas.48 Otherwise, similar to Medicare, the number of available 

Medicaid managed care plans varies, depending on how many plans are 

offered where the beneficiary lives. Subject to the terms and conditions of 

the waiver, Medicaid managed care plans can generally limit 

beneficiaries, including dual-eligible beneficiaries, to the plan’s provider 

network,49 whereas beneficiaries in Medicaid FFS may receive covered 

services from any qualified Medicaid provider.50

State requirements vary with respect to Medicaid enrollment into FFS or 

managed care and for choice between plans if beneficiaries enroll in 

managed care. For example:

CMS officials informed 

us, however, that for dual-eligible beneficiaries, the agency does not have 

the authority to allow states to limit the beneficiary’s choice of provider for 

Medicare covered benefits when mandatorily enrolling them into Medicaid 

managed care plans.

• Arizona: The state requires Medicaid beneficiaries, including all dualeligible beneficiaries, to enroll in either the Medicaid acute or longterm managed care programs under a section 1115 demonstration 

waiver. Beneficiaries in the state’s acute care program have a choice 

among managed care plans. Beneficiaries enrolled in the long-term 

care program generally have a choice of plans if they live in or are 

moving to Pima or Maricopa counties, which are the state’s two most 

 

47In addition to using waivers, states may also amend their Medicaid state plan to require 

certain Medicaid populations to enroll in managed care; however, federal law prohibits 

states from enrolling dual-eligible beneficiaries under this authority. If a state operates its 

Medicaid managed care program under this authority, enrollment of dual-eligible 

beneficiaries would need to be voluntary. See 42 U.S.C. § 1396u-2(a)(1). 

4842 U.S.C. § 1396u-2(a)(3), 42 C.F.R. § 438.52. States may also limit beneficiaries to 

enrollment into a single health insuring organization, which is a certain type of plan 

operated by a county, as long as the beneficiaries have a choice of at least two primary 

care providers. This option only applies to the state of California.

49States must ensure that Medicaid managed care plans maintain a network of 

appropriate providers that is sufficient to provide adequate access to all covered services. 

In addition, there are certain circumstances when a Medicaid managed care plan must 

cover out-of-network services, such as when a beneficiary is unable to obtain necessary 

services within the plan’s provider network. 42 C.F.R. § 438.206(b).

5042 U.S.C. § 1396a(a)(23)(A).
 

Page 18 GAO-13-100 Protections for Dual Eligibles

populated counties and the only counties where more than one longterm care plan operates.

• California: Medicaid beneficiaries’ choice of payment system varies 

depending on where they live among California’s 58 counties. In 28 

mostly rural counties all dual-eligible beneficiaries are in FFS.51 In the 

remaining 30 counties, the state has three different Medicaid 

programs for enrolling beneficiaries in managed care. Dual-eligible 

beneficiaries in 14 California counties are mandatorily enrolled in 

managed care through a county-organized health system, which is a 

health plan operated by a county that contracts with the state to 

provide health care benefits to Medicaid beneficiaries. Because there 

is only one plan in each of these counties, beneficiaries enrolled in the 

county-organized health systems have no choice between plans. 

Dual-eligible beneficiaries in 14 counties may choose between FFS or 

the state’s Two-Plan managed care program. Under the Two-Plan 

program, beneficiaries who enroll in managed care have a choice 

between the Local Initiative Health Plan—a public agency that is 

independent of the county—and a commercial plan. In the remaining 

two counties—Sacramento and San Diego—dual-eligible beneficiaries 

can choose between FFS or the Geographic Managed Care 

program.52 Under the Geographic Managed Care program, dualeligible beneficiaries who enroll in managed care can choose from 

several commercial managed care plans.

• Minnesota: Dually eligible seniors in Minnesota must enroll in one of 

two managed care programs, and dual-eligible beneficiaries who 

became eligible on the basis of their disabilities can choose whether 

to enroll in a managed care program. Minnesota has a 1915(b)(c) 

waiver to mandatorily enroll dually eligible seniors in a Medicaid 

managed care plan.53

 

51California is planning an expansion of Medicaid managed care in the state. By June 

2013, all counties in the state will offer Medicaid managed care plans to beneficiaries.

Alternatively, these seniors can choose to enroll 

52In the counties with the Two-Plan or Geographic Managed Care programs, most other 

Medicaid populations are mandatorily enrolled in managed care.

53A 1915(b)(c) waiver simultaneously implements a 1915(b) and a 1915(c) waiver. The 

combined waiver allows states to provide a continuum of services for the elderly and 

people with disabilities as long as the requirements of both waivers are met.

Minnesota’s program for seniors is for all beneficiaries age 65 and over, whether or not 

they have a disability. Minnesota has a separate program for other Medicaid populations 

who are not dual-eligible beneficiaries.
 

Page 19 GAO-13-100 Protections for Dual Eligibles

in a participating D-SNP that, under contract with the state, integrates 

Medicare and Medicaid financing and services. Dual-eligible 

beneficiaries age 18 to 64 who have disabilities may opt back into 

FFS. If they do not opt into FFS, they are enrolled in managed care 

and may opt into FFS at any time. Whether dual-eligible beneficiaries 

have a choice between plans varies depending on the county where 

they live.

• North Carolina: According to North Carolina Medicaid officials, all 

Medicaid beneficiaries, including dual-eligible beneficiaries, are in 

FFS, and the majority of dual-eligible beneficiaries are in a primary 

care case management program, where primary care providers are 

paid on a FFS basis, in addition to receiving a monthly fee to perform 

certain care coordination activities.

In general, federal law and regulations do not specifically require MA 

plans or Medicaid managed care plans to cover services provided by a 

beneficiary’s previous providers if that provider is not in the plan’s network 

when a beneficiary first enrolls in a plan or switches plans. There are 

limited circumstances when managed care plans are required to cover 

such services during a transition period. MA organizations must ensure 

that covered services are available and accessible to beneficiaries. In 

implementing this requirement, CMS officials informed us that MA 

organizations must ensure that there is no gap in coverage or problems 

with access to medically necessary services when a beneficiary must 

change to a plan-contracted provider. For example, a beneficiary 

receiving oxygen may need to switch to a new oxygen supplier when the 

beneficiary joins the MA plan or switches plans. As the beneficiary 

transitions to the new oxygen supplier, the MA plan may need to 

reimburse the beneficiary’s previous provider to ensure that there is no 

gap in coverage, and that the beneficiary maintains access to medically 

necessary services. MA organizations also must ensure coordination of 

services through various arrangements with network providers, such as 

programs that coordinate plan services with community and social 

Certain Requirements for 

Continuity and 

Coordination of Care, 

Provider Networks, and 

Marketing Materials Are 

Unique to Managed Care

Continuity and Coordination of 

Care 
 

Page 20 GAO-13-100 Protections for Dual Eligibles

services in the area, such as services offered by an area agency on 

aging.54 Additionally, D-SNPs or any other type of SNP must provide 

dual-eligible beneficiaries with access to appropriate staff to coordinate or 

deliver all services and benefits, and coordinate communication among 

plan personnel, providers, and the dual-eligible beneficiaries 

themselves.55

As with Medicare, Medicaid managed care plans are generally not 

required to cover services by a beneficiary’s previous provider if that 

provider is not in the plan’s network.56 However, states determine to what 

extent Medicaid managed care plans must provide beneficiaries with 

access to a person or entity primarily responsible for coordinating health 

services on the basis of the services the plan must cover.57 Individual 

states may have continuity of care requirements for their Medicaid 

managed care programs, as defined under an applicable waiver or state 

requirements. For example, in California, beneficiaries newly enrolled in 

managed care plans may request and receive coverage of the completion 

of treatments initiated by an out-of-network provider with whom they have 

an ongoing relationship in certain circumstances, such as for the

treatment of a terminal illness or acute condition. The length of the 

coverage depends on the stability of the beneficiary and the nature of the 

medical condition.58

 

5442 C.F.R. § 422.112(b).

Minnesota also has continuity of care requirements. 

For newly enrolled dually eligible seniors, managed care plans must 

5542 C.F.R. § 422.101(f).

56States that mandatorily enroll beneficiaries, including dual-eligibles, in rural areas into 

managed care without providing a choice of plans must cover out-of-network services and 

give the beneficiary’s prior FFS provider an opportunity to become a network provider. If 

the provider does not join the network, the beneficiary must select or be transitioned to a 

participating provider within 60 days. 42 C.F.R. § 438.52(b).

5742 C.F.R. § 438.208(a)(3). For example, states determine whether plans must ensure 

that dual-eligible beneficiaries have a person or entity formally designated as primarily 

responsible for coordinating services. States also may determine that, on the basis of an 

assessment of special health care needs, plans must provide a treatment plan for these 

beneficiaries.

58In addition, during California’s transition of non–dually eligible seniors and persons with 

disabilities into managed care, if beneficiaries were seeing a FFS provider before enrolling 

into a health plan, the beneficiaries may have been able to continue to see that doctor for 

12 months while enrolled in the health plan, as long as the physician accepted payment 

from and agreed to work with the health plan and had no quality of care issues.
 

Page 21 GAO-13-100 Protections for Dual Eligibles

cover medically necessary services that an out-of-network provider, a 

different plan, or the state agency authorized before the dual-eligible 

beneficiary enrolled with the managed care plan. However, the plan is 

allowed to require that the dual-eligible beneficiary receive the services 

from an in-network provider if that would not create an undue hardship on 

the dual-eligible beneficiary and the services are clinically appropriate. 

Arizona requires that managed care plans employ transition coordinators 

to ensure continuity of care, and beneficiaries in the state’s long-term 

care program receive additional case management for help navigating 

their care options, including planning, coordinating and facilitating access 

to services.

Medicare and state Medicaid programs require managed care plans to 

meet certain provider network standards. In order to limit beneficiaries to 

a network of providers, MA organizations must meet a number of 

requirements, including maintaining and monitoring a network of 

appropriate providers, under contract, that is sufficient to provide 

adequate access to covered services to meet the needs of enrolled 

beneficiaries.59 Federal guidelines establish minimum network adequacy 

requirements that vary depending on a county’s geographic designation, 

such as whether the county is urban or rural. MA organizations must 

contract with sufficient numbers of certain types of provider specialists per 

1,000 Medicare beneficiaries in a county. For example, MA plans 

operating in rural counties must have at least one full-time equivalent 

(FTE) primary care provider per 1,000 beneficiaries.60

 

59See 42 U.S.C. § 1395w-22(d), 42 C.F.R. § 422.112(a)(1).

Additionally, MA 

organizations must demonstrate that their network meets geographic 

requirements related to the time and distance it takes beneficiaries to 

travel to providers. For example, in rural counties, MA organizations must 

also ensure that 90 percent of beneficiaries can access primary care 

providers within 40 minutes and 30 miles of travel. MA organizations must 

also ensure that the networks include a minimum number of specialists 

and specialty facilities, such as at least one cardiologist and one skilled 

nursing facility per 1,000 beneficiaries.

60For CMS’s network adequacy calculations, the primary care provider category 

comprises physicians in general practice, family practice, internal medicine, and geriatrics, 

and primary care physician assistants and primary care nurse practitioners.

Provider networks
 

Page 22 GAO-13-100 Protections for Dual Eligibles

States must ensure, through contracts, that Medicaid managed care 

plans demonstrate that they have the capacity to serve expected 

enrollment in the service area in accordance with state standards.61

Unlike Medicare, however, federal Medicaid laws and regulations do not 

establish minimum provider network requirements and instead generally 

require states to set the standards for access to care. Accordingly, 

subject to the terms and conditions of a waiver, if applicable, states may 

establish requirements that define the minimum number and types of 

providers in a network, and time and distance requirements between 

beneficiaries and primary care providers, as well as other network 

adequacy requirements. For example, Medicaid managed care plans in 

California must maintain a provider to beneficiary ratio of one FTE 

primary care physician for every 2,000 beneficiaries and one FTE 

physician from any specialty for every 1,200 beneficiaries. In some 

counties, managed care plans must also ensure that primary care 

physicians are located within 30 minutes or 10 miles of beneficiaries’ 

residences, unless the state approves an alternative time and distance 

standard. In addition to time and distance standards, Arizona requires 

managed care plans to contract with a specific number of providers, as 

determined by the state, which varies by each area that the plan serves. 

Arizona also defines time frames for beneficiaries to be able to access 

some services. For example, Arizona Medicaid managed care plans must 

provide beneficiaries with access to emergency primary care services

within 24 hours, urgent primary care services within 2 days, and routine 

primary care services within 21 days. Plans must include a minimum 

number of other types of providers—such as dentists, pharmacists, 

home- and community-based services providers, and behavioral health 

facilities—in their networks as well.

For 

example, plans must submit documentation to the state that they offer an 

appropriate range of preventive, primary care, and specialty services, and 

maintain a network of providers that is sufficient in number, mix, and 

geographic distribution to meet the needs of the enrollees.

Medicare and Medicaid each have requirements regarding the marketing 

materials managed care organizations send out to beneficiaries. MA 

organizations are required to comply with a variety of federal 

requirements for marketing materials that are intended to promote 

 

6142 U.S.C. § 1396u-2(b)(5), 42 C.F.R. § 438.207.

Marketing materials 
 

Page 23 GAO-13-100 Protections for Dual Eligibles

enrollment in a specific health plan. For example, organizations generally 

must submit marketing materials to CMS for review prior to sending to 

beneficiaries.62 Materials must provide an adequate written description of 

the plan’s benefits and services and comply with formatting requirements, 

such as a minimum font size. In addition, MA organizations must translate 

materials into any non-English language that is the primary language of at 

least 5 percent of individuals in the plan’s service area.63

Medicaid managed care plans are required to comply with both federal 

and state requirements for marketing materials. For example, Medicaid 

managed care plans must obtain state approval before distributing 

marketing materials.64 Federal requirements also mandate that materials 

must be written in an easily understood language and format,65 though 

requirements for format are not precisely defined. In addition, plans must 

make information, including Medicaid marketing materials, available in 

each prevalent language spoken by enrollees and potential enrollees in 

the plan’s service area.66 Subject to the terms and conditions of a waiver, 

if applicable, states may further define requirements for readability and 

material translation, while other states may prohibit marketing altogether. 

For example, marketing materials in California must be translated when a 

threshold number of beneficiaries whose primary language is not English 

live in a managed care plan’s service area or in the same or adjacent zip 

codes, among other circumstances. Additionally, all Medicaid marketing 

materials in California must be written at no higher than the sixth-grade 

reading level and be approved by the state Medicaid agency. Arizona 

prohibits Medicaid managed care plans from conducting any marketing 

that is solely intended to promote enrollment; all marketing materials must 

include a health message.

 

6242 U.S.C. § 1395w-21(h)(1), 42 C.F.R. § 422.2262(a).

6342 C.F.R. § 422.2264.

6442 U.S.C. § 1396u-2(d)(2)(A), 42 C.F.R. § 438.104(b).

6542 U.S.C. § 1396u-2(a)(5), 42 C.F.R. §§ 438.10(b), 438.104(b)(iii).

6642 C.F.R. §§ 438.104(b)(iii), 438.10(c). States must establish a methodology for 

identifying prevalent non-English languages spoken by enrollees and potential enrollees 

throughout the state.
 

Page 24 GAO-13-100 Protections for Dual Eligibles

Other requirements affecting dual-eligible beneficiaries, such as coverage 

for nursing facility and home health services and the appeals process, 

vary between Medicare and Medicaid, and between the FFS and 

managed care payment systems.

Beneficiaries must meet different requirements to qualify for nursing 

facility care under Medicare and Medicaid. As required under federal law, 

to qualify for Medicare’s 100 days of SNF coverage, beneficiaries must 

have a prior hospital stay.67 Specifically, Medicare beneficiaries must 

have been hospitalized for medically necessary inpatient hospital care for 

at least 3 consecutive calendar days, not including the discharge date. In 

addition, Medicare beneficiaries must meet certain criteria, such as: 

(1) require skilled nursing or rehabilitative services on a daily basis, 

(2) services must only be rendered for a condition the beneficiary had 

during hospitalization, and (3) require daily skilled services that can only 

be provided in an SNF.68

Unlike Medicare, Medicaid does not limit coverage of nursing facility 

services to beneficiaries with prior hospital stays and states must cover 

services provided by qualified SNFs as well as other types of nursing 

facilities.69 Instead, federal Medicaid law requires states to provide 

coverage of nursing facility services for adult Medicaid beneficiaries when 

medically necessary.70

 

6742 U.S.C. § 1395d(2). MA plans generally must cover all services covered by Medicare 

FFS.

Within broad federal parameters, such as 

requiring that beneficiaries need daily, inpatient nursing facility services 

that are ordered by a physician, states may impose additional 

6842 C.F.R. §§ 409.30, 31. For beneficiaries in MA plans, however, the plans may 

determine that a direct admission to an SNF without a prior hospital stay is medically 

appropriate. 

69SNFs provide skilled nursing care or rehabilitation services. In addition to these 

services, nursing facilities may also provide health-related care to beneficiaries who, 

because of their mental or physical condition, require institutional services (above the level 

of room and board).

7042 U.S.C. § 1396a(a)(10)(A). Medicaid managed care plans must cover the same 

benefits as covered by FFS under the state Medicaid plan.

Other Requirements Also 

Vary by Program, Payment 

System, and State

Scope of Services: Nursing 

Facility Care 
 

Page 25 GAO-13-100 Protections for Dual Eligibles

requirements when defining coverage for this benefit.71

Beneficiaries must meet different requirements to qualify for home health 

services under Medicare and Medicaid. Medicare beneficiaries may only 

qualify for home health coverage when they are confined to a home or an 

institution that is not a hospital, SNF, or nursing facility. Additionally, the 

beneficiary must be under the care of a physician, need intermittent 

skilled nursing care,

For example, 

beneficiaries in North Carolina, must show they meet the requirements to 

be in a nursing facility by demonstrating some qualifying conditions. 

Qualifying conditions may include, among other things, (1) the need for 

services that require a registered nurse a minimum of 8 hours a day and 

other personnel working under the supervision of a licensed nurse, (2) the 

need for restorative nursing to maintain or restore maximum function or 

prevent deterioration in individuals with progressive disabilities as much 

as possible, or (3) the need for a specialized therapeutic diet. In Arizona, 

the acute care program covers nursing facility services for a limited 

amount of time (90 days) if hospitalization will occur otherwise or the 

treatment cannot be administered safely in a less restrictive setting, such 

as at home. Medicaid beneficiaries in the long-term care program in 

Arizona have longer-term nursing facility benefits. Beneficiaries qualify for 

the long-term-care program when they have a functional or medical 

condition that impairs functioning to the extent that the individual would be 

deemed at immediate risk of institutionalization. Impairments may include, 

among other things, requiring nursing care, daily nurse supervision, 

regular medical monitoring, or presenting impairments with cognitive 

functioning or self-care with ADLs. 

72

 

7142 C.F.R. § 440.50. Although coverage of services must be sufficient in amount, 

duration, and scope to achieve its purpose, states may place appropriate limits on 

services on the basis of criteria such as medical necessity or utilization control 

procedures. 42 C.F.R. § 440.230. While Medicaid managed care plans are required to 

cover services in the same manner as under the state Medicaid plan, in some cases 

states allow managed care plans to modify requirements so long as they are no more 

restrictive than the requirements under FFS. 44 C.F.R. § 438.210.

physical therapy, speech language pathology 

72Intermittent means that the skilled care is either provided or needed fewer than 7 days 

each week, or less than 8 hours of each day for periods of 21 days or less, with 

extensions in exceptional circumstances when the need for additional care is finite and 

predictable.

Scope of Services: Home 

Health Care 
 

Page 26 GAO-13-100 Protections for Dual Eligibles

services, or have a continuing need for occupational therapy services, 

and receive services under a written plan of care.73

Unlike in Medicare, states may not require that Medicaid beneficiaries be 

confined to a home or institution in order to qualify for home health 

benefits. Instead, federal regulations require that in order to qualify for 

Medicaid coverage, home health services generally must be provided at 

the beneficiary’s home and ordered by a physician as part of a written 

plan of care, which must be renewed every 60 days.74 As with nursing 

facility services, state Medicaid programs have the authority to impose 

additional conditions on accessing home health benefits, and accordingly 

state programs vary with respect to when beneficiaries may qualify for 

home health benefits.75 For example, to receive home health coverage in 

North Carolina, a physician must order the home health services and 

must have face-to-face contact with the beneficiary 90 days prior to care 

or 30 days after care, and the services must be medically necessary. 

Beneficiaries must have at least one reason, from a specific list of 

reasons set by the state, to receive home health services.76 For example, 

beneficiaries might qualify if they require assistance leaving the home 

because of a physical impairment or medical condition, or if they are 

medically fragile.

 

7342 C.F.R. §§ 409.42, 43. The written plan of care must be reviewed every 60 days or 

more frequently in some circumstances, such as when there is a change in the 

beneficiary’s condition. 

7442 C.F.R. § 440.70. As referenced earlier, states may also provide coverage for home 

health services under a 1915(c) waiver, or other authorities, under which there may be 

additional requirements to access home health benefits.

75Although coverage of services must be sufficient in amount, duration, and scope to 

achieve its purpose, states may place appropriate limits on services on the basis of criteria 

such as medical necessity or utilization control procedures. 42 C.F.R. § 440.230. In 

addition, while Medicaid managed care plans are required to cover services in the same 

manner as under the state Medicaid plan, in some cases states allow managed care plans 

to modify requirements so long as they are no more restrictive than the requirements 

under FFS. 44 C.F.R. § 438.210.

76North Carolina has several 1915(c) waivers to cover additional services for certain 

populations.
 

Page 27 GAO-13-100 Protections for Dual Eligibles

Medicare and Medicaid each have multiple levels of appeals, which vary 

further between each program’s managed care and FFS delivery 

systems. Accordingly, the appeals processes that dual-eligible 

beneficiaries encounter differ depending on whether the benefit being 

denied, reduced, or terminated is a Medicare or Medicaid benefit, and 

whether the individual is enrolled in FFS or managed care.77 Both 

programs require that beneficiaries in either managed care and FFS be 

notified of their right to appeal.78

Medicare has five levels of appeals for managed care and FFS.

1. Beneficiaries enrolled in an MA plan must first request review by the 

MA organization.79 In FFS, beneficiaries first request review by the 

claims processing contractor that made the initial coverage decision.80

 

77These appeals processes also apply when eligibility is denied or a claim is not acted 

upon with reasonable promptness. For this report, we are focusing on appeals for 

coverage that is denied, reduced, or terminated. There are other parties that may appeal a 

denial, reduction, or termination of a benefit. For purposes of this report, however, we only 

address the beneficiary’s rights with respect to these appeal processes.

78For Medicare, beneficiaries must receive a notice of the initial coverage determination 

that includes information on the right to request review by the appropriate entity and 

subsequent appeals processes, when applicable. 42 U.S.C. §§ 1395w-22(g)(1), 

1395ff(a)(4), 42 C.F.R. §§ 405.921(a), 422.568(e). Medicaid FFS beneficiaries must 

receive notice from the state informing them of their right to a state fair hearing when the 

state intends to terminate, suspend, or reduce covered services. 42 C.F.R. § 431.206.

Medicaid managed care enrollees must receive a notice of the initial coverage 

determination from their managed care plan, which must include information on the right 

to file an appeal with the plan or request a state fair hearing, when applicable. 42 C.F.R. 

§ 438.404.

79MA organizations must have a process in place to make organizational determinations 

as to whether a beneficiary is entitled to receive coverage for a health service. 

Beneficiaries have the right to request reconsideration by the MA organization of any 

adverse organizational determination. When a denial of coverage is based on the lack of 

medical necessity, the reconsidered determination must be made by a physician with the 

appropriate medical expertise. 42 U.S.C. §1395w-22(g)(1)-(2), 42 C.F.R. §§ 422.566, 

.578.

8042 U.S.C. § 1395ff(a), (b), 42 C.F.R. § 405.940. CMS contracts with Medicare 

Administrative Contractors to process claims in Medicare FFS. The contractors make 

initial determinations as to whether Medicare will cover services. Beneficiaries dissatisfied 

with this initial determination may request a redetermination from the contractor, 

regardless of the amount.

Appeals Processes 
 

Page 28 GAO-13-100 Protections for Dual Eligibles

2. For MA, if the adverse determination is affirmed, the issues must be 

automatically reviewed and resolved by an independent review entity, 

and for Medicare FFS, beneficiaries may request review by a qualified 

independent contractor.81

3. If the independent entity affirms the adverse determination, MA and 

FFS beneficiaries have the right to request a hearing before an 

administrative law judge (ALJ) in the Department of Health and 

Human Services if the amount remaining in controversy—the 

projected value of denied services or a calculated amount based on 

charges for services provided—is above a specified level.

For beneficiaries in either FFS or managed 

care, this is the earliest opportunity for their claim to be reviewed by a 

different entity than the one that made the original determination.

82

4. MA and FFS beneficiaries who are dissatisfied with the ALJ hearing 

decision may request review by the Medicare Appeals Council.83

5. MA and FFS beneficiaries may request judicial review by a U.S. 

district court of a decision by the Medicare Appeals Council if the 

amount in controversy is above a specified level.84

 

8142 U.S.C. §§ 1395w-22(g)(4), 1395ff(c), 42 C.F.R. §§ 405.960, 422.592.

8242 U.S.C. § 1395w-22(g)(5), 42 U.S.C. § 1395ff(b), (d), 42 C.F.R. §§ 405.1000, 

405.1004, 422.600. Medicare FFS beneficiaries have the right to request an ALJ hearing if 

(1) they are dissatisfied with the qualified independent contractor’s decision, (2) the 

qualified independent contractor has not rendered its decision within applicable time 

frames, or (3) the qualified independent contractor dismissed their request. ALJs are 

employed by the Department of Health and Human Services and are responsible for 

conducting formal proceedings such as hearings, among other things. CMS established a 

formula for annually calculating the minimum amount that must be in controversy for 

beneficiaries to appeal to an ALJ. That amount was $130 for 2012.

8342 C.F.R. §§ 405.1100, 422.608. The Medicare Appeals Council undertakes a de novo

review and may issue a final decision, dismiss the appeal, or remand the case to the ALJ 

with instructions for rehearing the case. Medicare FFS beneficiaries may also request this 

review if the ALJ dismissed their case or failed to issue a timely decision.

8442 U.S.C. § 1395w-22(g)(5), 42 U.S.C. § 1395ff(b), 42 C.F.R. §§ 405.1132, 422.612.The 

minimum amount that must be in controversy for beneficiaries to request judicial review is 

updated annually. The amount was $1,350 for 2012. In addition to the threshold amount 

requirement, Medicare FFS beneficiaries may request judicial review if the Medicare 

Appeals Council has not issued a decision, dismissed the case or remanded the case 

back to an ALJ within the relevant period. MA beneficiaries may request judicial review if 

the council’s decision is the final determination of CMS or the council denied the request 

for review.
 

Page 29 GAO-13-100 Protections for Dual Eligibles

There are no federal Medicare requirements that benefits continue during 

the appeals processes for either managed care or FFS, nor do federal 

law and regulations require that FFS or MA beneficiaries receive personal 

assistance, including assistance from a care coordinator or other 

specialist, when navigating the appeals process. However, there are 

certain protections incorporated into the appeals process that are 

designed to assist Medicare beneficiaries. For example, Medicare 

beneficiaries may appoint a representative to assist them with an appeal. 

Beneficiaries also may seek assistance through the Office of the 

Medicare Beneficiary Ombudsman, which is responsible for resolving 

inquiries and complaints for all aspects of the Medicare program, through 

the 1-800-MEDICARE help line.

States can structure their Medicaid appeals processes within the 

parameters of federal requirements. Medicaid FFS beneficiaries must 

have access to a fair hearing before a state agency for certain actions, 

including when benefits are terminated, suspended, or reduced.85 Once a 

final agency decision is made, Medicaid FFS beneficiaries may request a 

judicial review of the decision if permitted under state law. Beneficiaries in 

Medicaid managed care plans must have the ability to appeal a 

termination, suspension, or reduction of a benefit to the plan as well as 

have access to a state fair hearing.86

 

8542 U.S.C. § 1396a(a)(3), 42 C.F.R. §§ 431.205, .240(a)(3). State Medicaid agencies 

must provide for a hearing before the agency or an evidentiary hearing at the local level 

with the right to appeal to a state agency hearing. The state agency hearing must be 

conducted by one or more impartial officials. In providing a final agency decision to the 

beneficiary, state agencies may choose to accept or reverse the hearing officials’ decision 

or request a rehearing.

States determine whether 

beneficiaries must first exhaust their appeal to their Medicaid managed 

care plans before they may request a state fair hearing. During these 

appeals, benefits generally must continue in certain circumstances. 

Benefits generally must continue until a final agency decision is made if 

the beneficiary is mailed a notice of action and files an appeal before the 

8642 U.S.C. § 1396u-2(b)(4), 42 C.F.R. §§ 438.400, .402. Each Medicaid managed care 

plan must have an internal appeals process in place for beneficiaries to challenge certain 

actions, including termination, suspension, or reduction of a service, denial or limited 

authorization of a service, or a denial of payment for a service.
 

Page 30 GAO-13-100 Protections for Dual Eligibles

date of the action.87 As in Medicare, neither federal regulations nor law 

require that beneficiaries in Medicaid FFS have access to personal 

assistance in navigating the appeals process. States, however, have the 

option of providing this assistance to FFS beneficiaries.88 For 

beneficiaries in Medicaid managed care, plans must give beneficiaries 

assistance with completing appeal forms and taking other procedural

steps, including providing interpreter services and toll-free numbers for 

assistance.89

The appeals processes in the states that we reviewed varied, for instance 

as to whether a beneficiary in managed care has to appeal to his or her 

managed care plan first. For example, Arizona requires beneficiaries to 

first appeal to their managed care plan before requesting a state fair 

hearing. In contrast, Minnesota allows beneficiaries to request a state fair 

hearing without first appealing to their managed care plan. Dual-eligible 

beneficiaries in Minnesota may also request help from the state 

ombudsman, and county boards are required to designate a coordinator 

to assist the state Medicaid agency, including coordinating appeals with 

the ombudsman.

See appendix II for a more detailed summary of these consumer 

protection requirements across programs, payment systems, and 

selected states.

 

87For Medicaid FFS beneficiaries, benefits must continue unless it is determined at the 

hearing that the sole issue is one of federal or state law or policy. 42 C.F.R. § 431.230. 

States may also reinstate benefits if the beneficiary requests a hearing within a certain 

time frame after the date of action. 42 C.F.R. § 431.231. For Medicaid managed care 

beneficiaries, benefits must continue if the beneficiary files a timely appeal, the appeal 

involves the termination, suspension, or reduction of a previously authorized service, the 

service was ordered by an authorized provider, the original period covered by the 

authorization has not expired, and the beneficiary requests the extension of benefits. 

42 C.F.R. § 438.420.

88For example, states may assist beneficiaries with the submission and processing of their 

appeal requests. See 42 C.F.R. § 431.221(c).

8942 C.F.R. § 438.406.
 

Page 31 GAO-13-100 Protections for Dual Eligibles

CMS and states used compliance and enforcement actions that ranged 

from informal written notices to contract terminations in order to help 

ensure MA organizations and Medicaid managed care plans complied 

with consumer protection requirements.

CMS used both compliance and enforcement actions to bring 

noncompliant MA organizations into compliance with federal 

requirements. Compliance actions are intended to prompt managed care 

organizations to address issues of noncompliance, such as the timing of 

disenrollments, whereas enforcement actions impose a penalty on a 

managed care organization and are taken to address more significant 

violations. According to CMS, the nature of each violation is considered 

when determining the appropriate compliance or enforcement action and 

the actions generally proceed through the process in a step-by-step 

manner before enforcement actions are taken.90

CMS takes compliance actions against MA organizations to address 

violations that are identified during the agency’s monitoring and auditing 

activities. According to agency guidance, compliance actions are 

appropriate when the MA organization: (1) demonstrates sustained poor 

performance over a period of time; (2) has a noncompliance issue that 

involves a large number of beneficiaries; or (3) does not meet its 

contractual requirements. The lowest-level compliance action is a notice 

of noncompliance, which may be an e-mail from a CMS contract manager 

to a managed care plan stating that an aspect of the program is out of 

compliance. The notice of noncompliance requests the plan respond with 

how it will address the problem and may be followed by a warning letter 

from CMS that identifies a limited and quickly fixable issue of 

noncompliance that requires immediate remedy. If CMS determines that 

 

90For more serious violations, CMS may choose to immediately proceed to later-stage 

compliance or enforcement actions.

CMS and States Used 

a Range of Actions to 

Help Ensure 

Organizations Comply 

with Medicare and 

Medicaid Consumer 

Protection 

Requirements 

CMS Took Compliance and 

Enforcement Actions 

against Medicare 

Advantage Organizations

Compliance Actions
 

Page 32 GAO-13-100 Protections for Dual Eligibles

the noncompliance affects multiple beneficiaries and represents an 

ongoing or systemic inability by the plan to adhere to Medicare 

requirements, CMS will send a formal letter to the MA’s chief executive 

officer stating the concern and requiring the organization to develop and 

implement a corrective action plan (CAP). The CAP must address the 

deficiencies identified by CMS, provide an attainable time frame for 

implementing corrective actions, and devise a process for the managed 

care organization to validate and monitor that the corrective actions were 

taken and remain effective.

Between January 1, 2010, and June 30, 2012, CMS took 546 compliance 

actions generally related to consumer protection requirements of 

importance to dual-eligible beneficiaries.91 (See table 1.) These issues of 

noncompliance that could potentially affect dual-eligible beneficiaries 

were identified during CMS’s ongoing oversight activities, analysis of plan 

deliverables, and complaints made by beneficiaries or providers. Of these 

546 actions, 386, or 70 percent, were due to marketing issues.92 CMS 

sent notice of noncompliance or warning letters for marketing issues 

related to misrepresentation of requirements for enrollment and use of 

unapproved marketing materials.

 

91CMS’s Compliance Activity Module (CAM) includes 45 different compliance categories. 

In consultation with CMS staff, we determined the top eight issue categories most closely 

aligned with the consumer protections identified and detailed in our first finding. However, 

actions directly tied to dual-eligible beneficiaries could not be broken out from actions tied 

to the Medicare beneficiary population broadly.

92We have previously reported on marketing violations by MA organizations. See GAO,

Medicare Advantage: CMS Assists Beneficiaries Affected by Inappropriate Marketing but 

Has Limited Data on Scope of Issue, GAO-10-36 (Washington, D.C.: Dec. 17, 2009).
 

Page 33 GAO-13-100 Protections for Dual Eligibles

Table 1: Selected CMS Compliance Actions against Medicare Advantage (MA) 

Organizations, January 1, 2010–June 30, 2012

Compliance actions

Issue

Notice of 

noncompliance

Warning 

letters 

Corrective 

action plans

Total compliance

actions

Marketing 314 72 0 386

Enrollment/disenrollment 94 23 1 118

Appeals/grievancesa 12 2 2 16

Benefits administration 11 0 0 11

Complaint monitoring 5 1 0 6 

Premium/copay Billing 4 0 2 6 

Access to services/providers 3 0 0 3 

Coordination of benefits 0 0 0 0 

Total actions 443 98 5 546

Source: CMS.

Note: Data are from CMS’s Compliance Activity Module (CAM). The CAM includes 45 different 

compliance categories. In consultation with CMS staff, we determined the top eight issue categories 

most closely aligned with the consumer protections identified by researchers and detailed in our first 

finding. However, actions directly tied to dual-eligible beneficiaries could not be broken out from 

actions tied to the Medicare beneficiary population broadly. Data exclude compliance actions taken 

against Medicare prescription drug plans.

a

A grievance is any complaint or dispute expressing dissatisfaction with any aspect of the operations, 

activities, or behavior of a Medicare health plan, or its providers, regardless of whether remedial 

action is requested.

The second most common issue resulting in a compliance action was 

related to beneficiary enrollment/disenrollment in a MA plan. Twenty-two 

percent, or 118, of CMS’s compliance actions were due to issues such as 

delays in disenrollment processing, lack of monthly attestation of 

enrollment data, and failure to verify that beneficiaries were eligible to 

enroll in SNPs.

In addition to compliance actions, CMS may take enforcement actions 

against MA organizations for more serious violations. Enforcement 

actions can be taken when (1) all compliance actions have been 

exhausted, (2) the MA organization has a repeat deficiency, (3) the area 

of noncompliance could result in harm to one or more Medicare 

beneficiaries, or (4) the area of noncompliance is deemed a “substantial 

failure” of Medicare requirements. Enforcement actions include the 

imposition of intermediate sanctions defined as the imposition of civil 

money penalties (CMP), the suspension of enrollment of or marketing to 

Medicare beneficiaries, or the suspension of payment to a MA 

Enforcement Actions
 

Page 34 GAO-13-100 Protections for Dual Eligibles

organization.93 CMS also has the authority to terminate the organization’s 

MA contract.94

CMS took 22 enforcement actions related to consumer protection 

requirements against MA organizations between January 1, 2010, and 

June 30, 2012. (See table 2.) These enforcement actions were taken 

against MA organizations offering plans serving all beneficiaries, not just 

dual-eligible beneficiaries. Seventeen of the 22 enforcement actions were 

CMPs imposed because of marketing violations. According to CMS, these 

violations included incomplete, inaccurate, or late marketing 

communications about plan benefits or changes that prevented 

beneficiaries from having complete information to choose among 

competing MA plans. CMS levied a total of about $3.4 million in CMPs 

against MA organizations during the period. The average CMP was about 

$200,000.

Table 2: CMS Enforcement Actions against Medicare Advantage (MA) 

Organizations, January 1, 2010–June 30, 2012

CMS enforcement action

Violation issue 

Suspension of

enrollment or 

marketing

Civil monetary 

penalties Termination

Access to services 0 0 0 

Access to drugs 3 1 0 

Marketing communications/broker 2 15 0 

Patient billing/contract administration 0 1 0 

Total 5 17 0 

Source: CMS.

Note: Data are from CMS enforcement letters. These enforcement actions include those taken in 

response to issues affecting all MA beneficiaries, not just dual-eligible beneficiaries. Data exclude 

enforcement actions taken against Medicare prescription drug plans.

 

9342 U.S.C. 1395w-27(g). Intermediate sanctions may be imposed for certain categories 

of misconduct including (1) failing substantially to provide medically necessary services in 

a manner that has adversely affected beneficiaries, (2) imposing premiums or charges on 

enrollees that are in excess of those permitted under the program, (3) misrepresenting or 

falsifying information that is furnished to the Secretary or beneficiaries, and (4) failing to 

comply with marketing requirements.

94Prior to termination of a contract, CMS must provide the MA organization with the 

opportunity to develop and implement a corrective action plan (CAP) and the opportunity 

to appeal the termination.
 

Page 35 GAO-13-100 Protections for Dual Eligibles

CMS suspended plan enrollment and marketing activities five times. 

Three plans were suspended because of deficiencies in the 

administration of their prescription drug benefit resulting in beneficiaries 

not receiving medications. The agency suspended two other MA plans 

because of the use of prohibited marketing practices affecting vulnerable 

populations. These practices included brokers using aggressive tactics,95

misrepresenting plan information, and enrolling beneficiaries in plans 

without their knowledge. Once the five plans corrected these violations to 

CMS’s satisfaction, the agency released them from sanctions and they 

were permitted to market to and enroll beneficiaries again. Four of the 

suspensions were for 14 months or longer. CMS did not terminate any 

MA plan during our reporting period.

Oversight of Medicaid managed care plans is the primary responsibility of 

the states. The states we interviewed have systems in place to monitor 

ongoing activities and to take action when the need arises.96

The three states we reviewed used similar sequences of actions to 

identify and address issues of noncompliance by their Medicaid managed 

care plans. State officials reported that when noncompliance issues are 

suspected they first notify the plans and give them an opportunity to 

remedy the problem. Subsequent deficiencies may require a Medicaid 

managed care plan to initiate a corrective action plan that the state would 

monitor to assure the appropriate changes are made. Between January 1, 

2010, and June 30, 2012, the three states reported they took a total of 

157 compliance actions against their Medicaid managed care plans. 

These actions ranged from sending warning letters, issuing notices to 

State 

officials said they communicate regularly with plans to anticipate and 

troubleshoot potential problems. They also provide plans with guidance 

and offer training and technical assistance resources. In addition, all three 

of the states we reviewed required monthly reports of plan activities, and 

conducted periodic audits of their managed care plans to identify and 

address issues of noncompliance.

 

95A broker is an individual who markets a specific MA plan and may receive compensation 

directly or indirectly from a managed care organization for marketing activities.

96North Carolina does not contract with managed care plans.

States Took Actions 

against Medicaid Managed 

Care Plans
 

Page 36 GAO-13-100 Protections for Dual Eligibles

cure, requiring CAPs, and imposing financial penalties.97

The reasons that states required Medicaid managed care plans to 

institute CAPs during the reporting period varied. California and 

Minnesota identified noncompliance with the appeals and grievance 

process that required corrective actions.

The most 

common action taken by the states was to require a managed care plan 

to implement a CAP.

98

 

97In California, two departments—the Department of Health Care Services and the 

Department of Managed Health Care—share responsibility for oversight of Medicaid 

managed care plans. We obtained compliance and enforcement data from the 

Department of Health Care Services, which operates the Medicaid managed care program 

in California. We were not able to obtain similar information from the Department of 

Managed Health Care, which oversees all managed care plans in the state, because its 

data do not separate Medicaid lines of business from other lines of business a managed 

care organization may operate. Officials from the Department of Managed Health Care 

told us that issues related specifically to Medicaid managed care plans represent a small 

percentage of total compliance and enforcement actions taken by that agency.

California required plans to 

take corrective actions to ensure beneficiaries were able to access 

appropriate translation services. The majority of the CAPs required by 

Minnesota’s Medicaid office dealt with plan management of beneficiary 

appeals and grievances. Arizona required CAPs to address the use of 

unapproved marketing materials. After appeals, the next most frequent 

reason states requested CAPs on consumer protection requirements was 

to address problems regarding beneficiaries’ access to providers, 

services, or drugs. Figure 2 illustrates the reasons why Medicaid 

managed care plans were required to implement a CAP for the 91 CAPs 

issued during the period.

98A grievance is any complaint or dispute expressing dissatisfaction with any aspect of the 

operations, activities, or behavior of a health plan, or its providers, regardless of whether 

remedial action is requested.
 

Page 37 GAO-13-100 Protections for Dual Eligibles

Figure 1: Number of and Reasons for Corrective Action Plans (CAP) Required by

Selected States, January 1, 2010–June 30, 2012

Note: Corrective action plans (CAP) may include actions to address multiple deficiencies.

In addition to termination of contracts, under federal law states must 

establish a series of intermediate sanctions that may be imposed on 

Medicaid managed care plans for failing to comply with certain federal 

requirements.99

 

9942 U.S.C. § 1396u-2(e). While the intermediate sanction authority pertains to statutorily 

defined categories of noncompliance, states also have authority to take action for other 

types of noncompliance such as defined under the terms of their contracts with Medicaid 

managed care plans.

An intermediate sanction may be imposed when a 

managed care plan (1) fails substantially to provide medically necessary 

services under its contract with the state, (2) imposes premiums or 

charges on enrollees that are in excess of those permitted under the 

program, (3) discriminates among enrollees on the basis of their health 

status, and (4) misrepresents or falsifies information that it furnishes to 

CMS or the state. Under these circumstances, states may impose a CMP, 

appoint temporary management for the health plan, grant enrollees the 

right to terminate enrollment without cause, suspend new enrollment in 

the plan, or suspend payment to the plan. If a state takes an intermediate 

sanction against a managed care plan it must report it to CMS. According 
 

Page 38 GAO-13-100 Protections for Dual Eligibles

to CMS, none of the three states we reviewed imposed an intermediate 

sanction against a managed care plan because of violations of consumer 

protection requirements during our reporting period.

While CMS does not directly oversee the operation of Medicaid managed 

care plans, CMS has the authority to disallow or withhold federal 

matching funds to states for certain reasons, including if states fail to 

obtain prior approval of contracts with Medicaid managed care plans or if 

the contracts fail to meet applicable federal requirements.100 Between 

January 1, 2010, and June 30, 2012, CMS did not stop or defer federal 

Medicaid payments to any state Medicaid program because of contractual 

issues related to consumer protections, according to agency officials.101

We received written comments on a draft of this report from the 

Department of Health and Human Services, which are reprinted in 

appendix III, and technical comments, which we incorporated as 

appropriate. The department noted that the report was an accurate 

assessment of the programs we reviewed, and added that the MedicareMedicaid Coordination Office has already made some progress aligning 

the requirements between the two programs in the area of appeals. CMS 

has developed a revised Notice of Medicare Denial of Coverage (or 

Payment) that includes optional language to be used in cases where a 

Medicare health plan enrollee also receives full Medicaid benefits that are 

being managed by the Medicare health plan. The revised Notice of 

Medicare Denial of Coverage (or Payment) is under review as part of the 

approval process.

We will send copies of this report to the Administrator of CMS and 

interested congressional committees. We will also make copies available 

at no charge on GAO’s website at http://www.gao.gov.

 

100As a condition of federal matching funds for Medicaid managed care programs, CMS 

must review and approve comprehensive risk contracts between states and Medicaid 

managed care plans.

101CMS did defer four payments to two states for reasons unrelated to the consumer 

protections we reviewed for this report. The four deferred payments were for $6,477, 

$64,227, $65,732, and $4,203,782, totaling about $4.34 million.

Agency Comments
 

Page 39 GAO-13-100 Protections for Dual Eligibles

If you or your staff have any questions about this report, please contact 

me at (202) 512-7114 or KingK@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix IV.

Kathleen M. King

Director, Health Care
Page 40 GAO-13-100 Protections for Dual Eligibles

List of Requesters

The Honorable Max Baucus

Chairman

Committee on Finance

United States Senate

The Honorable John D. Rockefeller IV

Chairman

Subcommittee on Health Care

Committee on Finance

United States Senate

The Honorable Sander M. Levin

Ranking Member

Committee on Ways and Means

House of Representatives

The Honorable Henry A. Waxman

Ranking Member

Committee on Energy & Commerce

House of Representatives

The Honorable Pete Stark

Ranking Member

Subcommittee on Health

Committee on Ways and Means

House of Representatives

The Honorable Frank Pallone Jr.

Ranking Member

Subcommittee on Health

Committee on Energy and Commerce

House of Representatives
Appendix I: Information on Selected States’ 

Medicaid Programs

Page 41 GAO-13-100 Protections for Dual Eligibles

In Arizona’s Medicaid program, called the Arizona Health Care Cost 

Containment System, nearly all Medicaid beneficiaries, including dualeligible beneficiaries, are enrolled in the acute care managed care 

program for Medicaid benefits. Individuals requiring long-term supports 

and services are enrolled in a separate long-term care managed care 

program. Both managed care programs operate under a section 1115 

demonstration waiver. As of January 2012, Arizona had about 110,000 

dual-eligible beneficiaries enrolled in Medicaid managed care, and over 

1.3 million total Medicaid beneficiaries.

California’s Medicaid system, called Medi-Cal, includes 28 counties with 

only a fee-for-service (FFS) system and 30 counties with one of three 

different managed care programs. Of the managed care options, the first 

is a county-operated health system, which requires nearly all Medicaid 

beneficiaries in participating counties, including dual-eligible beneficiaries, 

to enroll in a plan operated by the county. The second is the Two-Plan 

model, which has a commercial plan and a Local Initiative Health Plan—a 

public agency that is independent of the county. In the third program, 

called Geographic Managed Care, several commercial plans are offered 

as choice for beneficiaries. In both the Two-Plan and Geographic 

Managed Care programs, most Medicaid beneficiaries in the county are 

mandatorily enrolled in a managed care plan, but dual-eligible 

beneficiaries are in FFS unless they enroll voluntarily into one of the 

health plans. California officials reported that, as of June 2012, 26 percent 

of California’s approximately 1 million dual-eligible beneficiaries are 

enrolled in managed care, while the remaining 74 percent of dual-eligible 

beneficiaries are in FFS.

In Minnesota, dual-eligible beneficiaries who are 65 years old and older 

are required to enroll in a managed care program called Minnesota 

Senior Care Plus (MSC+). As of June 2012, about 10,500 dually eligible 

beneficiaries 65 and older in Minnesota are enrolled in MSC+. 

Alternatively, dual-eligible beneficiaries 65 and older may choose to enroll 

in the Minnesota Senior Health Options (MSHO) program. Unlike MSC+ 

plans, MSHO plans are Medicare special needs plans that also have 

contracts with the state for the Medicaid benefits package, which enables 

the plans to integrate Medicare and Medicaid financing and services for 

dual-eligible beneficiaries. About 35,700 dually eligible beneficiaries 65 

and older in Minnesota are enrolled in a MSHO plan. Dual-eligible

beneficiaries age 18 to 64 who have a disability are enrolled in the state’s 

Special Needs Basic Care managed care program if they do not opt into 

Appendix I: Information on Selected States’ 

Medicaid Programs

Arizona 

California

Minnesota 
Appendix I: Information on Selected States’ 

Medicaid Programs

Page 42 GAO-13-100 Protections for Dual Eligibles

Medicaid FFS. As of July 2012, about 39,000 of the state’s disabled 

population (both dual-eligible beneficiaries and non-dual-eligible 

beneficiaries) are enrolled in Special Needs Basic Care. More than 

21,000 of these disabled beneficiaries were dual-eligible beneficiaries. 

According to Minnesota Medicaid officials, as of June 2012, almost 

14 percent, or about 114,500, of Minnesota’s Medicaid population are 

dual-eligible beneficiaries, and 59 percent of the state’s dual-eligible 

beneficiaries are enrolled in managed care.

According to North Carolina Medicaid officials, North Carolina primarily 

operates its Medicaid program through a primary care case management 

(PCCM) program, called Carolina Access. Under the PCCM program, 

primary care providers are paid on a FFS basis, in addition to receiving a 

monthly fee for certain care coordination activities. The state’s enhanced 

PCCM program, called Community Care of North Carolina, includes 

14 networks of primary care providers that are responsible for an 

enhanced set of care coordination activities. According to North Carolina 

Medicaid officials, dual-eligible beneficiaries are assigned a primary care 

provider in one of the 14 networks, but they may opt out of the program if 

they choose a healthcare provider outside of the state’s Medicaid 

program. As of June 2012, according to state officials, about 13 percent 

of the state’s Medicaid population was dually eligible for Medicare and 

Medicaid and almost 68 percent of dual-eligible beneficiaries in the state 

were enrolled in the state’s PCCM program.

North Carolina
Appendix II: Description of Selected Federal 

and State Requirements

Page 43 GAO-13-100 Protections for Dual Eligibles

Table 3 describes selected consumer protection requirements for 

Medicare and Medicaid fee-for-service (FFS), and table 4 describes 

selected consumer protection requirements for Medicare Advantage (MA) 

and Medicaid managed care.

Table 3: Selected Requirements in Medicare and Medicaid FFS

Payment system

Requirement Medicare FFS Medicaid FFS

Enrollment and choice

How are beneficiaries enrolled 

(e.g., mandatory or voluntary 

enrollment)?

Federal requirements

Beneficiaries are enrolled in FFS if they do 

not enroll in managed care voluntarily.

Federal requirements

Beneficiaries may enroll voluntarily in a 

managed care plan or are mandatorily 

enrolled if the state has the Centers for 

Medicare and Medicaid Services (CMS) 

approval. They are in FFS if they are not 

enrolled in managed care.

Examples of state requirements

Arizona has a section 1115 demonstration 

waiver to mandatorily enroll beneficiaries in 

managed care.

In California, all beneficiaries in 28 counties 

are in FFS. Dual-eligible beneficiaries in 

another 16 counties are in FFS unless they 

enroll voluntarily in a managed care plan. 

Dual-eligible beneficiaries in the 14 

remaining counties are mandatorily enrolled 

in managed care.

Minnesota has a section 1915(b)(c) waiver 

to mandatorily enroll dually eligible seniors in 

managed care. A 1915(b)(c) waiver 

simultaneously implements a 1915(b) and a 

1915(c) waiver. The combined waiver allows 

states to provide a continuum of services for 

the elderly and people with disabilities as 

long as the requirements of both waivers are 

met. Dual-eligible beneficiaries age 18 to 64 

who have disabilities may opt into FFS. If 

they do not opt into FFS, they are enrolled in 

managed care and may opt into FFS at any 

time.

All North Carolina beneficiaries are in FFS.

To what extent can beneficiaries select 

their primary care provider?

Federal requirements

Beneficiaries may generally select any 

provider who is enrolled as a Medicare 

provider.a

Federal requirements

Beneficiaries may generally select any 

provider who is enrolled as a Medicaid 

provider.b

Appendix II: Description of Selected Federal 

and State Requirements 
Appendix II: Description of Selected Federal 

and State Requirements

Page 44 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare FFS Medicaid FFS

Can beneficiaries enrolled in managed 

care switch to FFS?

Federal requirements

Dual-eligible beneficiaries may switch to 

FFS at any time, while most other 

beneficiaries may only switch during certain 

periods.c

 

Federal requirements

Requirements depend on whether dualeligible beneficiaries are voluntarily or 

mandatorily enrolled into plans.d

Examples of state requirements

Beneficiaries in Arizona generally may not 

switch to FFS.

In California, dual-eligible beneficiaries in 

16 counties are enrolled voluntarily in 

managed care and may switch to FFS at any 

time. Dual-eligible beneficiaries in 14 

counties are mandatorily enrolled in 

managed care and may not switch to FFS.

In Minnesota, dually eligible beneficiaries 

with a disability who are enrolled voluntarily 

in managed care may switch to FFS in any 

month. Dually eligible seniors may not 

switch to FFS.

How are beneficiaries informed of and 

counseled on enrollment options?

Federal requirements

Beneficiaries receive information about 

Medicare coverage from CMS. Beneficiaries 

may also receive CMS-reviewed marketing 

materials sent by MA organizations.d

Federal requirements

In states that also have managed care 

programs, states must ensure that 

beneficiaries receive a summary of the 

state’s Medicaid managed care program 

from the state or its contracted 

representatives. The summary must include, 

among other things, information about the 

program requirements, covered benefits, 

and cost for each plan operating in the 

service area.e

Examples of state requirements

In Arizona, beneficiaries in the long-term 

care program have access to an eligibility 

case worker who determines eligibility and 

helps them navigate their enrollment 

options.

Beneficiaries in Minnesota may call a help 

line specifically for senior citizens or people 

with disabilities for information about 

enrollment options. The state or county 

agency is responsible for describing the 

available managed care plans for dually 

eligible seniors through presentations or 

written materials.

In North Carolina, county Departments of 

Social Services are responsible for notifying 

beneficiaries about their provider options.
Appendix II: Description of Selected Federal 

and State Requirements

Page 45 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare FFS Medicaid FFS

Scope of services

Under what circumstances can 

beneficiaries obtain coverage for nursing 

facility services?

Federal requirements

Medicare covers posthospital extended care 

services for up to 100 days for any spell of 

illness.f

In order to access posthospital skilled 

nursing facility (SNF) care, beneficiaries 

must have been hospitalized for medically 

necessary inpatient hospital care for at least 

3 consecutive calendar days, not including 

the discharge date and be eligible for 

Medicare on the date of discharge. The 

beneficiary also generally must be admitted 

to the facility within 30 days after the date of 

discharge from the hospital.g

In addition, (1) the beneficiary must require 

skilled nursing or rehabilitative services on a 

daily basis, (2) the services must be 

furnished for a condition the beneficiary had 

during hospitalization, and (3) the daily 

skilled services required are those that can 

only be provided in an SNF.h

Federal requirements

State Medicaid programs must cover nursing 

facility care for adult Medicaid beneficiaries 

and may cover this benefit for children as an 

optional benefit.i

Beneficiaries must need daily, inpatient 

nursing facility services ordered by a 

physician in order to qualify for nursing 

facility services.j

States must cover services 

provided by qualified SNFs as well as 

nursing facility services.k States, however, 

may place appropriate limits on services on 

the basis of criteria such as medical 

necessity and utilization control procedures.l

Examples of state requirements

In Minnesota, beneficiaries must meet one 

of several criteria for nursing facility care, as 

determined by the state. The criteria include, 

among other things: requiring assistance 

with activities of daily living; exhibiting 

impaired cognition, such as short term 

memory loss; or experiencing frailty or 

vulnerability, such as frequent falls.

Beneficiaries in North Carolina must show 

they meet the requirements to be in nursing 

facility care by demonstrating some 

qualifying conditions. Qualifying conditions 

may include, among other things, the need 

for services that require a registered nurse a 

minimum of 8 hours daily and other 

personnel working under the supervision of 

a licensed nurse, the need for restorative 

nursing to maintain or restore maximum 

function or prevent deterioration in 

individuals with progressive disabilities as 

much as possible, or the need for a 

specialized therapeutic diet. The services 

must be medically necessary. 
Appendix II: Description of Selected Federal 

and State Requirements

Page 46 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare FFS Medicaid FFS

Under what circumstances can 

beneficiaries obtain coverage for home 

health services?

Federal requirements

Beneficiaries must: be confined to a home or 

an institution that is not a hospital, SNF, or 

nursing facility, need intermittent skilled 

nursing care,m physical therapy, speech 

language pathology services, or have a 

continuing need for occupational therapy 

services; and receive services under a 

written plan of care.

Home health services must be ordered by a 

physician as part of a written plan of care, 

which must be reviewed every 60 days, or 

more frequently in some circumstances, 

such as when there is a significant change 

in the beneficiary’s condition.n

 

Federal requirements

State Medicaid programs must cover home

health services for categories of

beneficiaries, including those who are 

entitled to nursing facility benefits under the 

state’s Medicaid plan.o

Home health services must be ordered by a 

physician as part of a written plan of care, 

which must be renewed every 60 days.p

States are not allowed to require that 

beneficiaries be homebound in order to 

access home health services. States, 

however, may place appropriate limits on 

services on the basis of criteria such as 

medical necessity and utilization control 

procedures.q Additionally, states also have 

the option of covering home- and 

community-based services, including home 

health care and personal care services, for 

beneficiaries under different authorities.

Examples of state requirements

In California, beneficiaries have multiple 

paths to obtain home health services. For 

example, to qualify for home health services 

through the 1915(c) HCBS waiver for 

nursing facilities and acute health, the 

beneficiary must be medically fragile or 

technology dependent. Specifically, the 

beneficiary must have a medical need for at 

least 90 days of care in an acute hospital 

setting or an inpatient nursing facility. 

Qualifying criteria may include, among other 

things, the need for constantly available 

skilled nursing services for conditions such 

as those that require therapeutic 

procedures, like dressing postsurgical 

wounds.
Appendix II: Description of Selected Federal 

and State Requirements

Page 47 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare FFS Medicaid FFS

In Minnesota, home health services must be 

medically necessary, ordered by a 

physician, documented in a care plan that is 

reviewed every 60 days, and generally

provided at the beneficiary’s residence other 

than a hospital or long-term care facility. 

Home health services including skilled nurse 

visits and home health aide visits must be

authorized by the commissioner or the 

commissioner’s designee. They base their 

authorization on medical necessity and costeffectiveness when compared with other

care options, among other things. The 

commissioner must receive the request for 

authorization of skilled nurse visits and 

home health aide visits within 20 working 

days of the start of service. When home 

health services are used in combination with 

personal care and private duty nursing, the 

cost of all home care services is considered

for cost-effectiveness. Authorization may be 

valid for up to 1 year. Dually eligible 

beneficiaries may also access home health 

services under Minnesota’s 1915(c) waivers. 

In North Carolina, a physician must order 

home health services and have face-to-face 

contact with the beneficiary within 90 days 

prior to care or within 30 days after care, and 

the services must be medically necessary. 

Beneficiaries must have at least one reason, 

from a specific list of reasons created by 

North Carolina Medicaid officials, to receive 

home health services,r For example, 

beneficiaries might qualify if they require 

assistance leaving the home because of a 

physical impairment or medical condition, or 

if they are medically fragile. Dually eligible 

beneficiaries may also access home health 

services under North Carolina’s 1915(c) 

waivers.

Appeals

How are beneficiaries notified of their 

right to appeal a denial, reduction, or 

termination of benefits?

Federal requirements

Beneficiaries must receive a notice of the 

initial coverage determination that services 

are denied, which must include information 

on the right to an appeal.s

Federal requirements

Beneficiaries must receive notice from the 

state when it intends to terminate, suspend 

or reduce services. The notice must include 

information about the right to an appeal.t
Appendix II: Description of Selected Federal 

and State Requirements

Page 48 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare FFS Medicaid FFS

What is the appeals process for 

beneficiaries that have a benefit denied, 

reduced, or terminated?

Federal requirements

Medicare has five levels of appeals. 

Beneficiaries first appeal to the Medicare 

contractor that made the initial coverage 

decision and is responsible for processing 

claims.u In the second level, beneficiaries 

may request review by a qualified 

independent contractor (QIC).v In the third 

level, beneficiaries may file an appeal to an 

administrative law judge (ALJ) if the amount 

remaining in controversy—the projected 

value of denied services or a calculated 

amount based on charges for services 

provided—is above a specified level.w In the 

fourth level, they may request review by the 

Medicare Appeals Council.x Finally, 

beneficiaries may request judicial review of 

the decision by the Medicare Appeals 

Council by a U.S. district court if the amount 

in controversy is above a specified level.y

Federal requirements

Beneficiaries must have access to a fair 

hearing before the state agency. Beyond this 

federal requirement, states may define other 

levels of appeals, which can include a 

request for a hearing prior to a state fair 

hearing and an appeal to state court.z

Examples of state requirements

In California, beneficiaries may request a 

state fair hearing conducted by an ALJ 

employed by the state Medicaid agency. The 

state Medicaid agency may adopt the ALJ’s 

decision, decide the matter for himself or 

herself, or order a further hearing. After 

receiving a final decision from the state 

Medicaid agency, beneficiaries may request 

a rehearing or may file a petition for judicial 

review in state court.

In Minnesota, beneficiaries may request a 

state fair hearing, during which a hearing 

officer recommends an order to the 

commissioner of human services, who either 

accepts, rejects, or modifies the order. 

Beneficiaries who disagree with the 

commissioner can request reconsideration 

by the commissioner, who may either amend

or affirm the original order. A beneficiary 

may then request judicial review in state 

court.

In North Carolina, beneficiaries may request 

a state fair hearing. The state Medicaid 

agency then accepts or reverses the ALJ 

determination. After receiving a final 

decision, beneficiaries may request judicial 

review in state court. Beneficiaries may opt 

for mediation instead of a state fair hearing. 

If they do not accept the terms of the 

mediation, they receive a fair hearing.

Are there provisions to ensure continuity 

of access to benefits throughout the 

duration of the appeal process?

Federal requirements

There are no federal requirements that 

benefits continue during the appeals.

Federal requirements

Benefits generally must continue if the 

beneficiary is mailed a notice of action and 

filed an appeal before the date of action.aa 
Appendix II: Description of Selected Federal 

and State Requirements

Page 49 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare FFS Medicaid FFS

To what extent are beneficiaries required 

to have personal assistance, including 

from a care coordinator or other 

specialist, in navigating their appeal 

options?

Federal requirements

Although federal law and regulations do not 

require that beneficiaries receive personal 

assistance when navigating the appeals 

process, there are certain protections. For 

example, Medicare beneficiaries may 

appoint a representative to assist them with 

an appeal.bb Beneficiaries also may seek 

assistance through the office of the 

Medicare Beneficiary Ombudsman, which is 

responsible for resolving inquiries and 

complaints for all aspects of the Medicare 

program, through the 1-800-MEDICARE 

help line. 

Federal requirements

Although federal law and regulations do not 

require that beneficiaries receive personal 

assistance when navigating the appeals 

process, Medicaid beneficiaries may appoint 

a representative for the state fair hearing.cc

Federal regulations provide states with the 

option of providing assistance.dd

Examples of state requirements

Beneficiaries in California may request help 

from the county when filing a state fair 

hearing request.

In North Carolina, notice that service(s) will 

be denied, terminated, suspended, or 

reduced must inform beneficiaries that they 

may contact Legal Aid, which provides free 

legal services to low income individuals.

Source: GAO analysis of federal and state statutes, regulations, and guidance.

Notes: Information on state laws was confirmed by state Medicaid agency officials. We use 

“beneficiaries” to refer to statements or requirements that apply to all individuals receiving Medicare 

or Medicaid benefits, and “dual-eligible beneficiaries” to refer to statements or requirements that apply 

only to the dual-eligible beneficiaries.

a

42 U.S.C. § 1395cc. Any provider of service may be qualified to receive Medicare reimbursement for 

services rendered to a beneficiary if that provider enters into an agreement with CMS that meets 

applicable requirements.

b

42 U.S.C. § 1396a(a)(23)(A).

c

42 U.S.C. § 1395w-21(a), (e), 42 C.F.R. § 422.62.

d

42 C.F.R. § 422.2262(b).

e

42 C.F.R. § 438.10(e).

f

42 U.S.C. § 1395(d)(2).

g

42 C.F.R. §§ 409.30, .31. For beneficiaries enrolled in MA plans, however, the plans may determine 

that a direct admission to an SNF without a hospital stay is medically appropriate.

h

42 C.F.R. § 409.31.

i

42.U.S.C. §§ 1396a(a)(10)(A), .1396d(a).

j

42 C.F.R. § 440.50.

k

SNFs provide skilled nursing care or rehabilitation services. In addition to these services, nursing 

facilities may also provide health-related care to beneficiaries who because of their mental or physical 

condition require institutional services (above the level of room and board).

l

42 C.F.R. § 440.230.

mIntermittent means that the skilled care is either provided or needed fewer than 7 days each week, 

or less than 8 hours of each day for periods of 21 days or less, with extensions in exceptional 

circumstances when the need for additional care is finite and predictable.

n

42 C.F.R. §§ 409.42., .43.

o

42 U.S.C. § 1396a(a)(10)(D).
Appendix II: Description of Selected Federal 

and State Requirements

Page 50 GAO-13-100 Protections for Dual Eligibles

p

42 C.F.R. § 440.70.

q

42 C.F.R. § 440.230.

r

North Carolina has several 1915(c) waivers to cover additional services for certain populations.

s

42 U.S.C. § 1395ff(a)(4), 42 C.F.R. § 405.921(a).

t

42 C.F.R. § 431.206.

u

42 U.S.C. § 1395ff(a), (b), 42 C.F.R. § 405.940. 

v

42 U.S.C. § 1395ff(c), 42 C.F.R. § 405.960.

w

42 U.S.C. § 1395ff(b), 42 C.F.R. § 405.1000. ALJs are employed by the Department of Health and 

Human Services and are responsible for conducting formal proceedings such as hearings, among 

other things. CMS established a formula for annually calculating the minimum amount that must be in 

controversy for beneficiaries to appeal to an ALJ. That amount was $130 for 2012. Beneficiaries may 

request an ALJ hearing if (1) they are dissatisfied with the QIC’s decision, (2) the QIC did not render 

its decision within applicable timeframes, or (3) the QIC dismissed the request.

x

42 C.F.R. § 405.1100. The Medicare Appeals Council undertakes a de novo review and may issue a 

final decision, dismiss the appeal, or remand the case to the ALJ with instructions for rehearing the 

case. Beneficiaries may also request this review if the ALJ dismissed their case or failed to issue a 

timely decision.

y

The minimum amount that must be in controversy for beneficiaries to request judicial review is 

updated annually. The amount was $1,350 for 2012. In addition to the threshold amount, beneficiaries 

may also request judicial review if the Medicare Appeals Council does not issue a decision, dismisses 

the case, or remands the case back to an ALJ within relevant time frames. 42 U.S.C. § 1395ff(b), 

42 C.F.R. § 405.1132.

z

42 U.S.C. § 1396a(a)(3), 42 C.F.R. §§ 431.205, .240(a)(3). State Medicaid agencies must provide for 

a hearing before the agency or an evidentiary hearing at the local level with the right to appeal to a 

state agency hearing. The state agency hearing must be conducted by one or more impartial officials. 

In providing a final agency decision to the beneficiary, state agencies may choose to accept or 

reverse the officials’ determination or request a rehearing.

aaBenefits generally must continue unless it is determined at the hearing that the sole issue is one of 

federal or state law or policy. 42 C.F.R. § 431.230. States may also reinstate benefits if the 

beneficiary requests a hearing within a certain time frame after the date of action. 42 C.F.R. 

§ 431.231.

bb42 C.F.R. § 405.910.

cc42 C.F.R. § 431.206(b).

dd42 C.F.R. § 431.221(c). States may assist beneficiaries with the submission and processing of their 

fair hearing requests.
Appendix II: Description of Selected Federal 

and State Requirements

Page 51 GAO-13-100 Protections for Dual Eligibles

Table 4: Selected Requirements in Medicare Advantage (MA) and Medicaid Managed Care

Payment system

Requirement Medicare Advantage Medicaid managed care

Enrollment and choice

How are beneficiaries 

enrolled in managed care 

(e.g., mandatory or voluntary 

enrollment)?

Federal requirements

Beneficiaries may enroll voluntarily in an MA

plan.

Federal requirements

Beneficiaries may enroll voluntarily in a Medicaid 

managed care plan, or they are enrolled mandatorily 

if the state has CMS approval of a State Plan 

Amendment, 1115 demonstration waiver, or 1915(b) 

waiver.a

Examples of state requirements

Arizona has a section 1115 demonstration waiver to 

mandatorily enroll beneficiaries in managed care.

In California, all dual-eligible beneficiaries in 28 

counties are in FFS. Thirty counties have one of three 

different managed care programs. The first program 

is a county-operated health system, which requires 

nearly all Medicaid beneficiaries, including dualeligible beneficiaries, in the 14 participating counties 

to enroll in a health system operated by the county. 

The second program is the Two-Plan program, which 

has a Local Initiative Health Plan—a public agency 

that is independent of the county—and a commercial 

plan in 14 counties. The third program, called 

Geographic Managed Care, has several commercial 

health plans in 2 counties. In the Two-Plan and 

Geographic Managed Care programs, dual-eligible 

beneficiaries are in FFS unless they enroll voluntarily 

in managed care.

Minnesota has a section 1915(b)(c) waiver to 

mandatorily enroll dually eligible seniors in managed 

care. A 1915(b)(c) waiver simultaneously implements 

a 1915(b) and a 1915(c) waiver. The combined 

waiver allows states to provide a continuum of 

services for the elderly and people with disabilities as 

long as the requirements of both waivers are met. 

Dual-eligible beneficiaries age 18 to 64 who have 

disabilities may opt into FFS. If they do not opt into 

FFS, they are enrolled in managed care and may opt 

into FFS at any time.

Not applicable in North Carolina where all 

beneficiaries are enrolled in FFS.

To what extent can 

beneficiaries select their 

primary care provider?

Federal requirements

Beneficiaries in MA may be limited to the 

plan’s provider network.b

Federal requirements

Subject to terms and conditions of a waiver, if 

applicable, beneficiaries in managed care may be 

limited to the plan’s provider network.c
Appendix II: Description of Selected Federal 

and State Requirements

Page 52 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

To what extent can 

beneficiaries select their 

managed care plan?

Federal requirements

The number of plan options varies by county. 

Beneficiaries may select any plan for which 

they are eligible that serves the area where 

they live.d

Federal requirements

Whether beneficiaries may select among plans varies 

by state. For example, states that mandate 

enrollment in a managed care plan must provide 

beneficiaries a choice of at least two plans, except in 

specific circumstances, such as in rural areas.e

Examples of state requirements

Beneficiaries in Arizona’s acute care program have a 

choice among managed care plans, and have choice 

in the long-term care program in some 

circumstances, including if they live in or are moving 

to one of the state’s two most populated counties—

Pima or Maricopa counties.

Dual-eligible beneficiaries’ choice of managed care 

plans in California varies, depending on the county 

where they live. Dual-eligible beneficiaries living in 

the counties that have the Geographic Managed Care 

program may choose from several plans. Dualeligible beneficiaries living in counties that have the 

Two-Plan program may choose between one of two 

plans. In the other counties that have the countyoperated health system, dual-eligible beneficiaries 

have no choice because there is only one plan 

operating in the county.

Dual-eligible beneficiaries’ choice of managed care 

plans in Minnesota varies, depending on the county 

where they live.

When can beneficiaries switch 

between managed care and 

FFS or change managed care 

plans?

Federal requirements

Dual-eligible beneficiaries may switch 

between MA and FFS or change MA plans at 

any time. Most other beneficiaries may only 

switch to FFS or between plans during 

certain periods.f

Federal requirements

Requirements depend on whether dual-eligible 

beneficiaries are voluntarily or mandatorily enrolled in 

plans. For mandatory enrollment, subject to the terms 

and conditions of the waiver, if applicable, states may 

limit disenrollment to 90 days following initial 

enrollment and at least once a year or at other times 

with cause.g

Examples of state requirements

In Arizona, beneficiaries may generally enroll in or 

switch plans within 30 days of the date of notice of 

enrollment, during an annual election period, or in 

special circumstances, such as when a notification of 

the annual enrollment period was not sent. For 

beneficiaries in the long-term care program, in limited 

circumstances generally involving preexisting 

conditions and continuity of care issues, beneficiaries 

may request to change plans on a case-by-case 

basis if they live in a county with more than one plan.
Appendix II: Description of Selected Federal 

and State Requirements

Page 53 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

In California, dual-eligible beneficiaries living in 

counties that have either the Two-Plan or Geographic 

Managed Care programs may enroll in a plan, switch 

plans, or opt out of managed care into FFS at any 

time. Dual-eligible beneficiaries living in counties that 

have the county-operated health system may not 

switch plans or change into FFS.

In Minnesota, dual-eligible beneficiaries with a 

disability may change plans or enroll in managed care 

in any month. Dually eligible seniors enrolled in a 

special needs plan for duals (D-SNP)—a type of 

Medicare managed care plan exclusively for dualeligible beneficiaries—may change plans once per 

month and during an annual open enrollment period. 

Dually eligible seniors who are not enrolled in a 

D-SNP may change plans during an annual open 

enrollment period, once during the first year of 

enrolling in the program, and in limited 

circumstances, such as within 60 days of moving to a 

new county or at any time for good cause (e.g., poor 

quality of care).

Not applicable in North Carolina where all 

beneficiaries are enrolled in FFS.

How are beneficiaries informed 

of and counseled on enrollment 

options?

Federal requirements

Beneficiaries receive information about 

Medicare coverage from CMS, which 

distributes material that MA organizations 

submit. Beneficiaries may also receive CMSreviewed marketing materials sent by MA 

organizations.h

Federal requirements

Beneficiaries must receive a summary of the state’s 

Medicaid managed care program from the state or its 

contracted representatives. The summary must 

include, among other things, information about the 

program requirements, covered benefits, and cost for 

each plan operating in the service area.i

Examples of state requirements

In Arizona, beneficiaries in the long-term care 

program have access to an eligibility case worker 

who determines eligibility and helps them navigate 

their enrollment options.

In California’s counties where managed care 

enrollment is voluntary, enrollment brokers—who 

provide plan information to beneficiaries and help 

them choose a plan—must provide a presentation on 

plan options and enrollment to beneficiaries.

In Minnesota, dual-eligible beneficiaries may call a 

help line specifically for seniors or people with 

disabilities for information about enrollment options. 

The state or county agency is also responsible for 

providing presentations or written materials to dually 

eligible seniors.
Appendix II: Description of Selected Federal 

and State Requirements

Page 54 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

Continuity and coordination of care

Can beneficiaries continue to 

see historical providers not in 

the managed care plan’s 

network when transitioning into 

managed care or between 

plans?

Federal requirements

MA organizations generally are not required 

to cover services by a beneficiary’s previous 

provider who is not part of the MA network 

when a beneficiary first enrolls in a plan or 

switches plans. There are limited 

circumstances when MA organizations are 

required to cover such services during a 

transition period. MA organizations must 

ensure that covered services are available 

and accessible to beneficiaries. In 

implementing this requirement, CMS officials 

informed us that MA organizations must 

ensure that there is no gap in coverage or 

problems with access to medically necessary 

services when a beneficiary must change to a 

plan-contracted provider.

Federal requirements

Medicaid managed care plans generally are not 

required to cover services by a beneficiary’s previous 

provider who is not part of the managed care 

network.j

Individual states, however, may have 

continuity of care requirements as defined under the 

terms and conditions of their waiver or state 

requirements.

Examples of state requirements

In California, beneficiaries newly enrolled in managed 

care plans may request and receive coverage of the 

completion of treatments initiated by an out-ofnetwork provider with whom they have an ongoing 

relationship in certain circumstances, such as for 

treatment of a terminal illness or acute condition. The 

length of the coverage depends on the stability of the 

beneficiary’s health and the nature of the medical 

condition. For coverage to continue, the provider 

must accept either the health plan rate or Medicaid 

FFS rate, whichever is higher. Health plans must 

ensure, to the maximum extent possible, existing 

provider–beneficiary relationships are not disrupted 

for certain providers. These providers include 

traditional providers, which are physicians who have 

delivered services to Medicaid beneficiaries in the 

prior 6 months, and safety-net providers, which are 

any providers of comprehensive primary care or 

acute hospital inpatient services that provide these 

services to a significant number of Medicaid, charity, 

or medically indigent patients.k

In Minnesota, for newly enrolled dually eligible 

seniors, managed care plans must cover medically 

necessary services that an out-of-network provider, a 

different plan, or the state agency authorized before 

the dual-eligible beneficiary enrolled with the 

managed care plan. However, the plan may require 

the dual-eligible beneficiary to receive the authorized 

services from an in-network provider and the services 

be clinically appropriate.
Appendix II: Description of Selected Federal 

and State Requirements

Page 55 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

To what extent do beneficiaries 

have access to assistance with 

coordination of care?

Federal requirements

MA plans must ensure coordination of 

services through various arrangements with 

network providers such as programs that 

coordinate plan services with community and 

social services in the service area.l

Beneficiaries who enroll in an SNP—which 

can be a D-SNP or other type of SNP—must 

have access to appropriate staff to coordinate 

or deliver all services and benefits and 

coordinate communication among plan 

personnel, providers, and beneficiaries to 

ensure continuity of care.m

Federal requirements

States determine whether plans must ensure that 

dual-eligible beneficiaries have a person or entity 

formally designated as primarily responsible for 

coordinating services. States also may determine 

that, on the basis of an assessment of special health 

care needs, plans must provide a treatment plan for 

these beneficiaries.n

Examples of state requirements

In Arizona, managed care plans are required to 

employ a transition coordinator who advocates for 

beneficiaries who are leaving or joining the plan and 

coordinates the transition between plans to ensure 

continuity of care. Beneficiaries in the long-term care 

program must receive case management from a case 

manager who helps them navigate their care options, 

including service planning and coordination and 

facilitating access to services.

In California, beneficiaries enrolled in managed care 

have access to a state ombudsman office to provide 

assistance. Some beneficiaries, including those 

deemed medically fragile or those who have multiple 

diagnoses and require services from multiple 

providers, may receive targeted case management 

including help navigating care options. Managed care 

plans must also identify beneficiaries who are 

receiving services from out-of-network providers and 

ensure coordination of care. Additionally, managed 

care plans must have a call center and a 24-hour 

nurse advice line to assist beneficiaries with care 

options.
Appendix II: Description of Selected Federal 

and State Requirements

Page 56 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

In Minnesota, for dually eligible seniors, access to a 

patient advocate or ombudsman to help navigate care 

options depends on the program. Dually eligible 

seniors enrolled in the program where the health plan 

is a Medicare D-SNP contracted to provide Medicaid 

benefits receive additional care coordination and case 

management. This is intended to ensure access and 

integration of covered services, which includes an 

assigned case manager to arrange and coordinate 

the necessary provision of supports and services.

Dually eligible seniors who are in a non-D-SNP 

managed care plan have a case manager to 

coordinate plan services, but do not receive the 

additional care coordination. Managed care plans for 

dual-eligible beneficiaries with disabilities must have 

a range of case management services available, from 

telephone consultation to intensive ongoing 

intervention depending on the dual-eligible 

beneficiary’s health status. Dual-eligible beneficiaries 

have access to a 24-hour nurse line for consultations.

Provider network

Are there requirements 

addressing whether the 

provider network has an 

adequate number of providers?

Federal requirements

In order to limit beneficiaries to a network of 

providers, MA organizations must meet a 

number of requirements, including 

maintaining and monitoring a network of 

appropriate providers, under contract, that is 

sufficient to provide adequate access to 

covered services to meet the needs of 

enrolled beneficiaries.o

Federal requirements

States must ensure, through contracts, that Medicaid 

managed care plans demonstrate that they have the 

capacity to serve expected enrollment in the service 

area in accordance with state standards.q For 

example, plans must submit documentation to the 

state that they offer an appropriate range of 

preventive, primary care, and specialty services, and 

maintain a network of providers that is sufficient in 

number, mix, and geographic distribution to meet the 

needs of the anticipated number of enrollees. Federal 

regulations do not establish a minimum number of 

providers that must be in the network, though states 

may be subject to requirements under the terms and 

conditions of their waiver, if applicable. 
Appendix II: Description of Selected Federal 

and State Requirements

Page 57 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

Federal guidelines establish minimum 

requirements that vary, depending on a 

county’s geographic designation, such as 

whether the county is urban or rural. MA 

organizations must contract with sufficient 

numbers of certain types of provider 

specialists per 1,000 beneficiaries in a 

county. For example, the networks of 

managed care plans operating in rural 

counties must have at least one full-time 

equivalent (FTE) primary care provider per 

1,000 beneficiaries in a county.p Additionally, 

MA organizations must demonstrate that their 

network meets geographic requirements 

related to the time and distance it takes 

beneficiaries to travel to their providers. For 

example, in rural counties, MA organizations 

must also ensure that 90 percent of 

beneficiaries can access primary care 

providers within 40 minutes and 30 miles of 

travel.

Examples of state requirements

In Arizona, managed care plans must ensure that 

their network of primary care providers is sufficient to 

provide beneficiaries with available and accessible 

services within specified time frames. Managed care 

plans also must contract with a specific number of 

providers established by the state, which varies 

depending on the area covered by the plan. For 

example, beneficiaries must be able to access 

emergency primary care services within 24 hours, 

urgent primary care services within 2 days, and 

routine primary care services within 21 days. The 

network must also be sufficient to provide covered 

services within designated distance limits. For 

example, for the acute program, in Arizona’s two 

most populated counties, at least 95 percent of the 

beneficiaries living in a metropolitan area must be 

within 5 miles of a primary care physician, dentist, or 

pharmacy.

In California, plans ensure their provider network is 

adequate to provide the covered services for 

beneficiaries in the service area. For example, plans 

must maintain a provider to beneficiary ratio of one 

FTE primary care physician for every 2,000 

beneficiaries, and one total FTE physician in the 

network for every 1,200 beneficiaries. Primary care 

physicians must be located within 30 minutes or 

10 miles of a beneficiary’s residence, unless the state 

has approved an alternative time and distance 

standard.

In Minnesota, the maximum travel distance or time 

must be the lesser of 30 miles or 30 minutes from the 

beneficiary to the nearest provider for each of the 

following services: primary care, mental health, and 

general hospital services. For primary care, the plan 

must arrange services on a timely basis; appointment 

times are not to exceed 45 days from the date of a 

beneficiary’s request for routine and preventive care 

and 24 hours for urgent care. Managed care plans 

may receive an exception by demonstrating this 

requirement is not feasible in a service area, or if the 

beneficiary has full knowledge when choosing a plan 

that contracts with no providers meeting these 

requirements.
Appendix II: Description of Selected Federal 

and State Requirements

Page 58 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

Are there requirements 

addressing whether the 

provider network has the 

appropriate types of providers?

Federal requirements

Federal guidelines establish the minimum 

number of each provider and facility specialty 

type for each MA network. For example, the 

networks of MA plans must have at least one 

general surgeon and one cardiologist per 

1,000 beneficiaries in a county. These 

networks must also include at least one 

occupational therapy and skilled nursing 

facility per 1,000 beneficiaries. MA 

organizations may need to contract with more 

than the minimum number of providers and 

facility specialty types to meet the time and 

distance requirements.

Federal requirements

States must ensure, through contracts, that Medicaid 

managed care plans demonstrate that they have the 

capacity to serve expected enrollment in the service 

area in accordance with state standards.q For 

example, plans must submit documentation to the 

state that they offer an appropriate range of 

preventive, primary care, and specialty services, and 

maintain a network of providers that is sufficient in 

number, mix, and geographic distribution to meet the 

needs of the anticipated number of enrollees. Federal 

regulations do not establish minimum numbers for 

specialty providers and facility specialty types that 

must be in the network, though states may be subject 

to requirements under the terms and conditions of 

their waiver, if applicable. 

Examples of state requirements

In Arizona, managed care plans must contract with 

specific types of providers, which varies by 

geographic service area and is determined by the 

state. The state has contracting requirements for a 

variety of types of providers, including dentists, 

pharmacists, and primary care providers. For longterm care plans, providers include nursing facilities, 

assisted living facilities, home- and community-based 

care providers, and behavioral health facilities.

In Minnesota, generally, the maximum distance or 

time must be the lesser of 60 miles or 60 minutes 

from the beneficiary to the nearest provider of each of 

the following services: specialty physician, ancillary, 

specialized hospital, and all other health services not 

included in the 30 miles or 30 minutes requirement. 

Managed care plans may receive an exception by 

demonstrating this requirement is not feasible in a 

service area.

Under what circumstances can 

beneficiaries access out-ofnetwork services?

Federal requirements

MA organizations must cover out-of-network 

benefits in some circumstances, such as 

ambulance services dispatched through 911 

or for emergency or urgently needed 

services.r

Federal requirements

Beneficiaries must receive out-of-network coverage if 

the network is unable to provide necessary services 

that are covered under the state plan. The cost to the 

beneficiary may be no greater than if the services 

were provided in network.s
Appendix II: Description of Selected Federal 

and State Requirements

Page 59 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

Examples of state requirements

In Arizona, out-of-network services are covered if: the 

beneficiary is referred by a primary care provider for 

specialty care outside the service area (the plan is 

required to provide all other medically necessary 

covered services); there is a net savings in costs 

without undue travel time or hardship for the 

beneficiary; the plan authorizes placement in a 

nursing facility outside the service area; or the 

services were provided during a prior period of 

coverage.

In California, in addition to the federal requirement 

described above, Medicaid managed care plans in 

certain counties must arrange for rarely used 

medically necessary services to be provided by 

specialists outside the network if unavailable within 

the network.

Marketing materialst

Are marketing materials 

permitted to promote 

enrollment in a specific health 

plan? 

Federal requirements

Yes, marketing materials are permitted to 

promote enrollment in a specific health plan if 

MA organizations send the materials to CMS 

for review prior to distribution.u

Federal requirements

Yes, marketing materials are permitted to promote 

enrollment in a specific health plan.v However, in 

some circumstances states have prohibited such 

materials.

Examples of state requirements

Arizona does not permit Medicaid managed care 

plans to send marketing materials that are intended 

solely to promote enrollment in a specific health plan. 

All marketing materials must include a health 

message.

California permits marketing materials to promote 

enrollment in a specific health plan through means 

such as billboards and flyers.

Minnesota permits marketing materials to promote

enrollment for some beneficiaries, including dualeligible beneficiaries with disabilities, dually eligible 

seniors who are in a D-SNP, and Medicaid 

beneficiaries who will be eligible for Medicare within 

6 months. Marketing is not permitted to dually eligible 

seniors who are not in a D-SNP. 

What requirements, if any, 

exist for the readability of 

marketing materials?

Federal requirements

Marketing materials must provide an 

adequate written description of the plan’s 

benefits and services and comply with 

formatting requirements, such as using a 

minimum font size.

Federal requirements

Marketing materials must be written in easily 

understood language and format.w
Appendix II: Description of Selected Federal 

and State Requirements

Page 60 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

At what reading level do 

managed care organizations 

have to write marketing 

materials?

Federal requirements

There are no federal requirements that 

marketing materials be written at a certain 

reading level.

Federal requirements

There are no federal requirements that marketing 

materials be written at a certain reading level, 

however materials must be available in a format that 

considers those who have limited reading 

proficiency.w

Examples of state requirements

All correspondence sent to managed care 

beneficiaries, including marketing materials, in 

California must be written at or below the sixth-grade

reading level.

Marketing materials in Minnesota must be written at 

or below the seventh-grade reading level.

When do marketing materials 

have to be translated for 

beneficiaries who do not speak 

English?

Federal requirements

Medicare marketing material must be 

translated into any non-English language that 

is the primary language of at least 5 percent 

of individuals in the plan’s service area.x

 

Federal requirements

Medicaid marketing materials must be translated into 

each prevalent language spoken by enrollees and 

potential enrollees in the plan’s service area.y

Examples of state requirements

In California, marketing materials must be translated 

when: 3,000 mandatorily enrolled managed care 

beneficiaries live in the plan’s service area and 

indicate their primary language as other than English; 

or 1,000 mandatorily enrolled managed care 

beneficiaries in a single zip code or 1,500 mandatory 

managed care beneficiaries in adjacent zip codes live 

in the service area and indicate their primary 

language as other than English.

In Minnesota, vital documents must be translated into 

10 languages specified by the state. Additionally, vital 

documents must be translated when the lesser of 

either 5 percent or 1,000 beneficiaries eligible to be 

served or likely to be affected in the service area 

speak a non-English language. Plans that enroll 

dually eligible seniors must provide oral translation or 

translation by other means to any potential or current 

beneficiary who does not speak English. 
Appendix II: Description of Selected Federal 

and State Requirements

Page 61 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

Scope of services

Under what circumstances can 

beneficiaries obtain coverage 

for nursing facility services?

Federal requirements

MA plans must provide coverage using the 

same criteria as FFS, which are described in 

table 3.

For beneficiaries in MA plans, the plans may 

determine that a direct admission to an SNF 

without a prior hospital stay is medically 

appropriate.

Federal requirements

Coverage of nursing facility services by managed 

care plans must be no more restrictive than Medicaid 

FFS coverage.z

Examples of state requirements

In Arizona, nursing facility services are covered when 

beneficiaries qualify for the state’s long-term care 

program. Beneficiaries qualify for the long-term care 

program when they have a functional or medical 

condition that impairs functioning to the extent that 

the individual would be deemed at immediate risk of 

institutionalization. Impairments may include, among 

other things, requiring nursing care, daily nurse 

supervision, regular medical monitoring, or presenting 

impairments with cognitive functioning or self-care 

with activities of daily living. General requirements 

also include that nursing facility services are 

medically necessary, cost-effective, federally 

reimbursable, coordinated by a case manager, have 

prior authorization, provided in licensed or certified 

facilities, provided by registered providers, and the 

appropriate type of care as determined by the case 

manager or primary care provider. The acute care 

program covers nursing facility services for a limited 

amount of time if hospitalization will occur otherwise 

or the treatment cannot be administered safely in a 

less restrictive setting, such as at home.

In California, county-organized health system plans 

must cover nursing facility services as covered under 

FFS. In the Two-Plan and Geographic Managed Care 

programs, health plans only cover the first month of 

admission and 1 additional month. At that point, the 

beneficiary is disenrolled into FFS. 

In Minnesota, managed care plans must cover 

nursing facility services under the same 

circumstances as when beneficiaries receive 

coverage in FFS.
Appendix II: Description of Selected Federal 

and State Requirements

Page 62 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

Under what circumstances can 

beneficiaries obtain coverage 

for home health services?

Federal requirements

MA plans must provide coverage using the 

same criteria as FFS, which are described in 

table 3.

Federal requirements

Coverage of home health services by managed care 

plans must be no more restrictive than Medicaid FFS 

coverage.z 

Examples of state requirements

In Arizona, one way that beneficiaries can qualify for 

coverage of home health services is by qualifying for 

the state’s long-term care program, which may occur 

when they have a functional or medical condition that 

impairs functioning to the extent that the individual 

would be deemed at immediate risk of

institutionalization. Impairments may include, among 

other things, requiring nursing care, daily nurse 

supervision, regular medical monitoring, or presenting

impairments with cognitive functioning or self-care 

with activities of daily living. General requirements for 

coverage also include that home health services are 

medically necessary, cost-effective, federally 

reimbursable, coordinated by a case manager, with 

prior authorization, provided in licensed or certified 

facilities, provided by registered providers, and the 

appropriate type of care as determined by the case 

manager or primary care provider. Reassessments 

must be conducted within 62-day periods after the 

initial assessment or more often if necessary.

In California, home health coverage is not covered by 

managed care plans, and is provided under FFS.

In Minnesota, managed care plans must provide 

coverage using the same criteria as FFS.

Appeals

How are beneficiaries notified 

of their right to appeal a denial, 

reduction, or termination of 

benefits?

Federal requirements

Beneficiaries receive a notice of the initial 

coverage determination from their managed 

care plan, which must include information on 

the right to request another review by the MA 

organization and a subsequent appeal.aa

Federal requirements

Beneficiaries must receive a notice of the initial 

coverage determination from their managed care 

plan, which must include information on the right to 

file an appeal with the plan. If the state does not 

require beneficiaries to exhaust the managed care 

plan’s appeals process, the notice must also inform 

the beneficiaries of their right to request a state fair 

hearing.bb
Appendix II: Description of Selected Federal 

and State Requirements

Page 63 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

What is the appeals process 

for beneficiaries that have a 

benefit denied, reduced, or 

terminated?

Federal requirements

Beneficiaries enrolled in an MA plan must 

first request the MA organization that made 

the initial determination to review the 

decision.cc For MA, if the adverse 

determination is affirmed, the issues must be 

reviewed and resolved by an independent 

review entity.dd If the independent entity 

affirms the adverse determination and the 

amount remaining in controversy is above a 

specified level, MA beneficiaries have the 

right to request a hearing before an 

administrative law judge (ALJ) in the 

Department of Health and Human Services.ee

MA beneficiaries who are dissatisfied with the 

ALJ hearing decision may request review by 

the Medicare Appeals Council.ff MA 

beneficiaries may request judicial review by a 

U.S. district court if the amount in controversy 

is above a specified level and the Medicare 

Appeals Council’s decision is the final 

determination of CMS or the Council denied 

the request for review.gg

Federal requirements

Beneficiaries must have the ability to file an appeal 

with their Medicaid managed care plan as well as 

request a fair hearing before the state agency. States 

determine whether beneficiaries must first exhaust 

their plan-level appeal before they can request a state 

fair hearing. Once a final agency decision is made 

following a fair hearing, beneficiaries may request 

judicial review of the decision if permitted under state 

law.hh

Examples of state requirements

Arizona requires beneficiaries to appeal first to their 

managed care plan before requesting a state fair 

hearing with a state ALJ. The state Medicaid agency 

must accept, modify, or reject the ALJ decision. After 

receiving the agency decision, beneficiaries can 

request another review. The state Medicaid agency 

will grant a rehearing or review if the beneficiary’s 

rights have been materially affected, such as 

misconduct by a party or newly discovered evidence. 

Beneficiaries may then appeal to state court.

In California, beneficiaries may submit an appeal to 

the plan, or may request a state fair hearing before 

exhausting the plan’s appeals process. After 

appealing to the plan, if the service is denied, 

reduced, or terminated, or the plan fails to 

satisfactorily resolve the dispute, the beneficiary may 

request a review by the Independent Medical Review 

System, where an independent contractor reviews the 

appeal and makes a determination as to whether the 

service was medically necessary. The Department of 

Managed Health Care must adopt this determination. 

Beneficiaries may also request a state fair hearing 

prior to, during, or at the conclusion of the plan’s 

appeal process. If the hearing is conducted by an 

ALJ, the Director of the Department of Health 

Services may adopt the ALJ’s decision, decide the 

matter for himself or herself, or order a further 

hearing. After receiving a final decision from the state 

Medicaid agency, beneficiaries may request a 

rehearing or may file a petition for judicial review in 

state court.
Appendix II: Description of Selected Federal 

and State Requirements

Page 64 GAO-13-100 Protections for Dual Eligibles

Payment system

Requirement Medicare Advantage Medicaid managed care

In Minnesota, beneficiaries may submit an appeal to 

their managed care plan, or may request a state fair 

hearing without first appealing to their plan. During 

the state fair hearing, a hearing officer recommends 

an order to the Commissioner of Human Services, 

who either accepts, rejects, or modifies the order. 

Beneficiaries who disagree with the commissioner 

may request reconsideration by the commissioner, 

who may either issue an amended order or affirm the 

original order. A beneficiary may then request judicial 

review in state court.

Are there provisions to ensure 

continuity of access to benefits 

throughout the duration of the 

appeal process?

Federal requirements

There are no federal requirements that 

benefits must continue during the appeals.

Federal requirements

Benefits must continue during the appeal if: the 

beneficiary is mailed a notice of action and files an 

appeal prior to the effective date of action, the appeal 

involves services that are being reduced, terminated 

or denied; the course of treatment was previously 

authorized; the services were ordered by an 

authorized provider; the original period covered by 

the authorization has not expired; and the beneficiary 

requests an extension of benefits.ii If the beneficiary 

also requests a state fair hearing, benefits must 

continue during that process in the circumstances as 

described above.

To what extent are 

beneficiaries required to 

receive personal assistance, 

including from a care 

coordinator or other specialist, 

in navigating the appeals 

process?

Federal requirements

Although federal law and regulations do not 

require that beneficiaries receive personal 

assistance when navigating the appeals 

process, there are certain protections. For 

example, Medicare beneficiaries may appoint 

a representative to assist them with an 

appeal.jj Beneficiaries may also seek 

assistance from the Medicare Beneficiary 

Ombudsman through the 1-800-MEDICARE 

help line.

Federal requirements 

Federal regulations require that Medicaid managed 

care plans provide beneficiaries assistance with 

completing appeal forms and take other procedural 

steps, including providing interpreter services and tollfree numbers for assistance for plan-level appeals.

kk

Medicaid beneficiaries may appoint a representative 

for the state fair hearing.ll Federal regulations provide 

states with the option of providing assistance during 

the state four hearing process.

mm

Examples of state requirements

In Arizona, managed care plans are required to 

provide reasonable assistance to beneficiaries when 

completing forms and taking other procedural steps 

during the appeals process, including, for example, 

providing interpreter services.

Source: GAO analysis of federal and state statutes, regulations and guidance.

Note: Information on state laws was confirmed by state Medicaid agency officials. We use 

“beneficiaries” when referring to statements or requirements that apply to all individuals receiving 

Medicare or Medicaid benefits, and “dual-eligible beneficiaries” when referring to statements or 

requirements that apply only to the dual-eligible beneficiaries.

a

Dual-eligible beneficiaries can only be mandatorily enrolled in managed care under an 1115 

demonstration waiver or 1915(b) waiver.
Appendix II: Description of Selected Federal 

and State Requirements 

Page 65 GAO-13-100 Protections for Dual Eligibles

b

42 U.S.C. § 1395w-22(d), 42 C.F.R. § 422.112(a). In order to limit beneficiaries to a network, MA 

organizations must meet certain federal requirements, such as ensuring that covered services are 

available and accessible within the plan’s service area.

c

42 U.S.C. § 1396u-2(b)(5), 42 C.F.R. § 438.207. In establishing provider networks, plans must 

demonstrate that they have the capacity to serve expected enrollment in the service area in 

accordance with state standards.

d

42 U.S.C. § 1395w-21(a)(1), (b)(1).

e

42 U.S.C. § 1396u-2(a)(3), 42 C.F.R. § 438.52. States may also limit beneficiaries to enrollment in a 

single health insuring organization, which is a certain type of plan operated by a county, as long as 

the beneficiaries have a choice of at least two primary care providers. This option only applies in the 

state of California.

f

42 U.S.C. § 1395w-21(a), (e), 42 C.F.R. § 422.62.

g

42 C.F.R. § 438.56(c).

h

42 C.F.R. § 422.2262(b).

i

42 C.F.R. § 438.10(e).

j

There are certain exceptions. States that mandatorily enroll beneficiaries into plans in rural areas 

without providing a choice of plans must cover out-of-network services and give the beneficiary’s prior 

provider an opportunity to join the network. If the provider does not join, the beneficiary must select or 

be transitioned to a participating provider within 60 days. 42 C.F.R. § 438.52. In addition, states that 

mandatorily enroll Medicaid beneficiaries under a state plan amendment must meet certain federal 

requirements. Specifically, if beneficiaries do not select a plan, the state must ensure there is an 

enrollment process to assign them to a plan. This process must seek to preserve existing provider–

beneficiary relationships in which the provider was the main source of Medicaid services for the 

beneficiary during the previous year. 42 C.F.R. § 438.50(f). However, these federal requirements do 

not apply to dual-eligible beneficiaries, who cannot be mandatorily enrolled in managed care under a 

state plan amendment.

k

In 2011, California began mandatorily enrolling seniors and persons with disabilities—excluding dualeligibles—into Medicaid managed care. Beneficiaries who are mandatorily enrolled in managed care 

may see the their prior FFS provider for the first 12 months if the provider works with and accepts 

payment from the managed care plan and had no quality of care issues.

l

42 C.F.R. § 422.112(b).

m42 C.F.R. § 422.101(f).

n

42 C.F.R. § 438.208(a)(3).

o

42 U.S.C. § 1395w-22(d), 42 C.F.R. § 422.112(a)(1).

p

For CMS’s network adequacy calculations, the primary care provider category comprises physicians 

in general practice, family practice, internal medicine, and geriatrics, and primary care physician 

assistants and primary care nurse practitioners.

q

42 U.S.C. § 1396u-2(b)(5), 42 C.F.R. § 438.207.

r

42 C.F.R. § 422.100(b).

s

42 C.F.R. § 438.207(b).

t

We refer to marketing communications in the context of materials intended to promote enrollment in a 

specific health plan.

u

42 C.F.R. § 422.2262.

v

42 C.F.R. § 438.104.

w

42 U.S.C. § 1396u-2(a)(5), 42 C.F.R. §§ 438.10(b), 438.104(b)(iii).

x

42 C.F.R. § 422.2264.
Appendix II: Description of Selected Federal 

and State Requirements

Page 66 GAO-13-100 Protections for Dual Eligibles

y

42 C.F.R. § 438.10(c). States must establish a methodology for identifying prevalent non-English 

languages spoken by enrollees and potential enrollees throughout the state.

z

42 C.F.R. § 438.210.

aa42 U.S.C. § 1395w-22(g)(1), 42 C.F.R. § 422.568(e).

bb42 C.F.R. § 438.404.

cc42 U.S.C. § 1395w-22(g)(1)-(2), 42 C.F.R. §§ 422.566, .578. MA organizations must have a process 

in place to make organizational determinations as to whether a beneficiary is entitled to receive 

coverage for a health service. Beneficiaries have the right to request the MA organization that made 

the initial determination to review any adverse determination. When a denial of coverage is based on 

the lack of medical necessity, the reconsidered determination must be made by a physician with the 

appropriate medical expertise.

dd42 U.S.C. § 1395w-22(g)(4), 42 C.F.R. § 422.592.

ee42 U.S.C. § 1395w-22(g)(5), 42 C.F.R. § 422.600. ALJs are employed by the Department of Health 

and Human Services and are responsible for conducting formal proceedings such as hearings, 

among other things. CMS has established a formula for annually calculating the minimum amount 

that must be in controversy for beneficiaries to appeal to an ALJ. That amount was $130 for 2012.

ff42 C.F.R. § 422.608.The Medicare Appeals Council undertakes a de novo review and may issue a 

final decision, dismiss the appeal, or remand the case to the ALJ with instructions for re-hearing the 

case.

ggThe minimum amount that must be in controversy for beneficiaries to request judicial review is 

updated annually. The amount was $1,350 for 2012.

hh42 U.S.C. § 1396a(a)(3), 42 U.S.C. § 1396u-2(b)(4), 42 C.F.R. §§ 431.205, .240(a)(3), 

438.400, .402. Each Medicaid managed care plan must have an internal appeals process in place for 

beneficiaries to challenge certain actions, including termination, suspension, or reduction of a service, 

denial or limited authorization of a service, or a denial of payment for a service. State Medicaid 

agencies must provide for a hearing before the agency or an evidentiary hearing at the local level with 

the right to appeal to a state agency hearing. State agency hearings must be conducted by one or 

more impartial officials. In providing a final agency decision to the beneficiary, state agencies may 

choose to accept or reverse the officials’ determination or request a rehearing.

ii42 C.F.R. § 438.420.

jj42 C.F.R. §§ 422.672. 

kk42 C.F.R. § 438.206.

ll42 C.F.R. § 431.206(b).

mm42 C.F.R. § 431.221(c). States may assist beneficiaries with the submission and processing of their 

fair hearing requests.
Appendix III: Comments from the Department 

of Health and Human Services

Page 67 GAO-13-100 Protections for Dual Eligibles

Appendix III: Comments from the 

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

of Health and Human Services

Page 68 GAO-13-100 Protections for Dual Eligibles
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 69 GAO-13-100 Protections for Dual Eligibles

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

In addition to the contact named above, Randy DiRosa (Assistant 

Director), Lori Achman, Anne Hopewell, Lisa Motley, Laurie Pachter, 

Pauline Seretakis, Lillian Shields, and Hemi Tewarson made key 

contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(291036)
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