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85–983—PDF 2012

S. HRG. 112–840 

IMPROVING CARE FOR DUALLY-ELIGIBLE 

BENEFICIARIES: A PROGRESS UPDATE 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

DECEMBER 13, 2012 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

RUSSELL SULLIVAN, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 3 

WITNESSES 

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

Medicare and Medicaid Services, Washington, DC ........................................... 5 

Betlach, Thomas J., Director, Arizona Health Care Cost Containment System, 

Phoenix, AZ .......................................................................................................... 28 

Lindeblad, MaryAnne, Director, Washington State Health Care Authority, 

Olympia, WA ........................................................................................................ 29 

McCarthy, John B., Director, Ohio Department of Job and Family Services, 

Office of Health Plans, Columbus, OH ............................................................... 31 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 39 

Bella, Melanie: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 41 

Responses to questions from committee members ......................................... 54 

Betlach, Thomas J.: 

Testimony .......................................................................................................... 28 

Prepared statement .......................................................................................... 75 

Hatch, Hon. Orrin G.: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 78 

Lindeblad, MaryAnne: 

Testimony .......................................................................................................... 29 

Prepared statement .......................................................................................... 80 

McCarthy, John B.: 

Testimony .......................................................................................................... 31 

Prepared statement .......................................................................................... 83 

COMMUNICATIONS

American Health Care Association and National Center for Assisted Living 

(AHCA/NCAL) ...................................................................................................... 87 

National Committee to Preserve Social Security and Medicare and National 

Senior Citizens Law Center ................................................................................ 95 

National Disability Rights Network ....................................................................... 96 

(III) 

(1) 

IMPROVING CARE FOR DUALLY-ELIGIBLE 

BENEFICIARIES: A PROGRESS UPDATE 

THURSDAY, DECEMBER 13, 2012 

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 10:12 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Rockefeller, Bingaman, Wyden, Cantwell, Nelson, Carper, Cardin, Hatch, Grassley, Thune, and Burr. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The hearing will come to order. It seems we are 

going to have to go with the flow here and call audibles as we proceed. Some of the power is on, some of the power is not on. We 

have lights, but we do not have sound. We will proceed the best 

we can, and so just let’s everybody work together. And if someone 

cannot hear, would that person—not the audience—raise his or her 

hand? [Laughter.] That is, if any members of the panel cannot hear 

somebody’s testimony and vice versa, just raise your hand or shout 

out, ‘‘Would you repeat that?’’ Okay. 

President Harry Truman once said, ‘‘Difficulties are a challenge 

to men of determination.’’ And I suppose that would also apply to 

‘‘women of determination’’ these days. 

On July 30, 1965, President Lyndon Johnson signed monumental 

legislation creating both Medicare and Medicaid. At long last, the 

United States had met the challenge of guaranteeing health insurance to elderly and low-income Americans. The bill-signing ceremony took place in Independence, MO. The first Medicare card was 

given to the Nation’s first beneficiary, the 81-year-old former President, Harry S. Truman. 

Nearly 50 years later, Medicare and Medicaid continue to provide 

vital health services to more than 100 million Americans. Nine million of these individuals are part of a subgroup enrolled in both 

Medicare and Medicaid. These dually-eligible beneficiaries, sometimes called ‘‘duals,’’ present unique challenges that were hard to 

imagine back in 1965. 

These folks who are eligible for both Medicare and Medicaid are 

often thought of as one single group. They are not. People who become eligible for both Medicare and Medicaid do so for many different reasons. A low-income individual who just turned 65 may 

qualify. A 26-year-old with a disability may be considered duallyVerDate Nov 24 2008 16:45 Dec 19, 2013 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 R:\DOCS\85983.000 TIMD
2 

eligible. An 80-year-old who needs long-term care also could qualify. 

All pose very unique, individual challenges. They are not the 

same. These challenges are often complicated because Medicare 

and Medicaid do not always work very well together. Some rules 

are written by the States, others by the Federal Government. Acute 

care is paid for by Medicare. Long-term care is paid for by Medicaid. 

Incentives become misaligned, with too much red tape across 

both programs. Vulnerable Americans are lost in the middle. As a 

result, some of these folks receive poor health care, and we have 

the data that proves this. 

Half have three or more chronic conditions. More than half have 

a mental impairment. As a consequence of their poorer health status, dually-eligible beneficiaries are more than twice as likely as 

other beneficiaries to die during any given year. 

The government also spends disproportionately high amounts on 

this population. While 18 percent of Medicare beneficiaries are 

dually-eligible, they account for 31 percent of Medicare spending. 

Fifteen percent of Medicaid beneficiaries are duals, but they account for 39 percent of total Medicaid spending. Last year, States 

and the Federal Government spent nearly $300 billion on care for 

people who qualify for both Medicare and Medicaid. 

The nonpartisan Congressional Budget Office tells us that 40 

percent of the long-term growth in Federal health care programs 

is due to the growth in health care costs. But 60 percent can be 

linked to the aging of our population. In fact, 10,000 Americans 

will turn 65 each day over the next 2 decades. 

We cannot stop the aging of America, but we can work to lower 

health care costs. Streamlining Medicare and Medicaid so they 

work better together will pay dividends. It will improve the health 

of vulnerable Americans, and increasing efficiency will also save 

the Federal Government money. 

How are we going to increase efficiency? First, we need to rework 

our payment models so that providers, States, and the Federal 

Government have incentives to work toward the same goal. Let us 

remove incentives for providers to game the system; we need to put 

beneficiaries first. Everyone should be rewarded for lower costs as 

well as held accountable for poor or unnecessary care. 

Second, we need to coordinate care so that doctors, hospitals, and 

other providers are working together as a team. Dually-eligible 

folks often have multiple chronic diseases, requiring multiple doctors. If providers do not communicate, they can deliver unnecessary 

care. This leads to increased costs and can harm patients. 

Third, we need to get rid of conflicting rules and cut red tape in 

the areas where Medicare and Medicaid interact. For instance, 

when a dually-eligible person needs a wheelchair, Medicare and 

Medicaid have two very different rules. These rules are complicated 

and at times delay needed care. 

Accomplishing these goals will go a long way in improving care 

and saving money. 

Our witnesses are here today to discuss efforts to streamline 

these two programs. Last year, Melanie Bella, the Director of the 

office at CMS responsible for dually-eligible beneficiaries, testified 

3 

before the Finance Committee. She outlined CMS’s plans for a 

demonstration project where States would test new ways to provide 

health care to duals. 

Today, the committee is following up. We look forward to an update on these efforts from Director Bella and three States participating in the demonstration project: Washington, Arizona, and 

Ohio. As these demonstrations move forward, we need to keep in 

mind three key principles. 

One, the focus cannot be on cost-cutting alone. We must focus on 

streamlining Medicare and Medicaid in a smart way to improve 

how care is delivered. 

Two, we must maintain or strengthen the protections beneficiaries already enjoy today. Let me repeat that: we must maintain 

or strengthen the protections beneficiaries enjoy today. 

And three, we need to rigorously evaluate the projects to learn 

what worked and what did not. 

So let us focus on these principles, streamline the programs, and 

improve care for these vulnerable American citizens. And, as President Truman advised, if we act with determination, these difficulties will only be challenges to solve. 

[The prepared statement of Chairman Baucus appears in the appendix.] 

The CHAIRMAN. Senator Hatch? 

OPENING STATEMENT OF HON. ORRIN G. HATCH, 

A U.S. SENATOR FROM UTAH 

Senator HATCH. Well, thank you, Mr. Chairman, for holding this 

hearing. It will allow us to get a progress update on efforts to improve the care for beneficiaries who are eligible for Medicare and 

Medicaid. In an otherwise partisan atmosphere, today’s topic is refreshing. It represents an area where we can achieve some real bipartisan agreement to lower health care costs and improve patient 

care. 

There are more than 9 million Americans—commonly known as 

‘‘duals’’—who are eligible for both the Medicare and Medicaid programs. These patients often suffer, as the distinguished chairman 

has said, from multiple chronic conditions and have complex medical needs. The $300 billion spent on this type of care every year 

is generally separated by complicated Medicare and Medicaid payment rules. Unfortunately, the system is not serving taxpayers 

well, and it is not serving patients well either. 

I would note that many promising efforts have been made to address these needs, such as various State-driven efforts, the Special 

Needs Plans in Medicare Advantage, and the Program of AllInclusive Care for the Elderly, which is known as ‘‘PACE.’’ While 

these approaches have made a huge difference, there is much more 

work to be done. 

I know that our first witness, Melanie Bella from CMS, has been 

working hard to solve these problems, and I have a very high opinion of Melanie Bella and the work that she is doing. We want to 

help you to the extent that we can, and you need to give us some 

help yourself by giving us instructions on what we can do to help 

you. 

4 

Ms. Bella has led the Financial Alignment Initiative to encourage 

States to design solutions that integrate care delivery and funding 

streams for dually-eligible beneficiaries. She is actively working 

with 25 States to approve and implement these proposals. Today, 

we will hear from two States with approved proposals—Washington and Ohio—and another—Arizona—whose proposal is under 

review. 

I am supportive of State-designed efforts generally, and I applaud Ms. Bella for her pragmatic and compassionate approach to 

a very, very difficult task. However, I do want to make sure that 

we get the details right. In order to ensure these demonstrations 

are successful, I and six other members of this committee sent a 

letter to CMS in June outlining three priorities. 

First, the demonstrations should be of a size and scope that gives 

Congress data upon which to base future policymaking. Second, 

these proposals should be consistent with good government principles so that contracts are competitively bid on cost and quality 

across a level playing field. And, finally, we need to be sure that 

these demonstrations protect the integrity of the Medicare Part D 

program. 

Again, Mr. Chairman, I want to thank you for scheduling this 

important and timely discussion, and I do, as always, look forward 

to working with you on these issues. 

Now, one final thing. Mr. Chairman, I am really concerned about 

this fiscal cliff. This is the committee of jurisdiction, and, frankly, 

I think we ought to haul the Secretary of the Treasury up here one 

more time just so that we can ask some very pertinent questions 

about what really is going to go on and what can we do and what 

does he really want to do, because I cannot imagine him wanting 

to come up and present the program that he did present, which I 

found pretty insulting. But it would be a great thing if we could 

do that, and I know that you and I have worked together on these 

things, and maybe that is the way of getting that done. Maybe you 

can push things forward. I do not know. 

The CHAIRMAN. Well, Senator, I appreciate your opening statement, and I also know you speak for all of us when you say you 

are concerned about the fiscal cliff. We are also concerned about 

making sure that it is resolved, and resolved as expeditiously as 

possible. We need certainty and predictability in our country, stable markets, et cetera, and our goal should be just that. I will be 

working to do what we possibly can to help us and not to be taking 

actions that might be disruptive, so we appreciate your concern in 

this. 

[The prepared statement of Senator Hatch appears in the appendix.] 

The CHAIRMAN. We are very honored to have you, Melanie. Oh, 

now they are working. At least our lights are working. That is the 

first step. 

Ms. BELLA. I will just try to speak loudly. 

The CHAIRMAN. Try it again. Is there a light that goes on? 

Ms. BELLA. A red light, not green. 

The CHAIRMAN. A red light? We want red. 

Ms. BELLA. We have red. [Laughter.] 

5 

Senator HATCH. We can hear you. 

The CHAIRMAN. We will raise our hands if we cannot hear you. 

STATEMENT OF MELANIE BELLA, DIRECTOR, MEDICAREMEDICAID COORDINATION OFFICE, CENTERS FOR MEDICARE AND MEDICAID SERVICES, WASHINGTON, DC 

Ms. BELLA. Thank you. Chairman Baucus, Ranking Member 

Hatch, and members of the committee, thank you for the invitation 

to continue our discussion about CMS’s efforts to improve care for 

low-income seniors and people with disabilities who are enrolled in 

both the Medicare and Medicaid programs. My name is Melanie 

Bella, and I am the Director of the Medicare-Medicaid Coordination 

Office. I appreciate your ongoing interest in the work of the office, 

and thank you for the opportunity to be here today. 

For decades, there has been much discussion about better coordination for this population, and, through the Affordable Care Act 

and the leadership of this committee, Congress has given CMS the 

necessary tools to make things better. 

The Medicare-Medicaid Coordination Office continues to focus its 

work in three areas: program alignment, data analytics, and models and demonstrations. Together these areas provide a platform 

for developing integrated programs that help achieve our goal of increasing access to seamless, person-centered care that is high quality for all Medicare-Medicaid enrollees. Today, I would like to update you on the progress we have made since I last testified before 

this committee. 

Although established at the same time, Medicare and Medicaid 

were designed with distinct purposes, with little forethought as to 

how the two would work together. As a result, the two programs 

often work at cross-purposes. We are actively working to address 

the areas where the programs bump up against each other, and I 

just want to share with you a few concrete examples. 

The number-one issue we get asked about from both beneficiaries 

and providers relates to billing. So, earlier this year, we issued 

guidance to make it clear that the providers may not balance-bill 

Medicare-Medicaid enrollees, and we plan to continue to work aggressively in this area. 

Another area of frustration we hear about frequently is appeals. 

The CHAIRMAN. By ‘‘balance-bill,’’ you mean charge the beneficiary. 

Ms. BELLA. Charge the beneficiary the difference, yes. 

The CHAIRMAN. I want to make sure everybody understands that. 

Ms. BELLA. Another area of frustration is the appeals. We are finalizing what is called a Combined Integrated Notice of Denial of 

Payment that is the first step in integrating the appeals process 

between the two programs for beneficiaries, providers, and payers 

who must navigate both. 

Lastly, there has always been widespread interest in expanding 

the Program of All-Inclusive Care for the Elderly, or the PACE program. We have convened a cross-agency work group to explore how 

to increase flexibilities in PACE using our sub-regulatory or regulatory vehicles that the agency has at its discretion. 

There are many opportunities to improve the coordination of 

rules, requirements, and policies between the two programs. This 

6 

critical work is ongoing for us and fundamental to creating a more 

seamless, high-quality, cost-effective system of care. 

As we have discussed in the past, a thorough understanding of 

the Medicare-Medicaid population and its subpopulations is critical 

to everything we do and drives our efforts, including new beneficiary outreach and engagement models, new quality measures, 

care models, and payment models, just to name a few. 

I am happy to report that CMS now has an integrated MedicareMedicaid data set. This will allow States and policymakers and 

others to better understand the population and support opportunities for improved care coordination. This work takes our efforts in 

providing States access to Medicare data for care coordination purposes and expands it by allowing States to also now receive the integrated data that they can be using to support their care coordination efforts. 

Also exciting are enhancements to CMS’s Chronic Condition Data 

Warehouse to include new diagnostic conditions flags for conditions 

prevalent among Medicare-Medicaid enrollees, such as schizophrenia. Given the widespread use of this research database to inform policy and program decisions, it is a huge step forward to be 

adding conditions that will further inform our understanding of 

this population. 

In June, as part of our mandate to serve as a resource to States, 

policymakers, researchers, Congress, and others, we released profiles on Medicare-Medicaid enrollees nationally and for each of the 

50 States and the District of Columbia. The State-level profiles contain demographic characteristics, utilization and spending patterns, 

and will be updated annually. 

Supplementing this work, this month CMS launched the State 

Data Resource Center. This center is open to all States to help 

guide them in their use of Medicare data across CMS programs 

and in the development of their coordinated care initiatives. 

Moving on to our final area, models and demonstrations, CMS 

has approved financial alignment demonstrations in Massachusetts, Washington, and Ohio. These States will become our first 

partners to test the integration of services and financing, with the 

ultimate goal of improving the care experience for beneficiaries. 

The new programs will use a benefits-plus approach, meaning 

beneficiaries will receive all the current services and benefits they 

do today from Medicare and Medicaid with added protections, care 

coordination, and access to seamless enhanced services. Our work 

with States and stakeholders to better care for this population will 

continue with a strong commitment to transparency—— 

The CHAIRMAN. Ms. Bella, ordinarily we give 5 minutes per witness, but I am going to give you 10, so go ahead. 

Ms. BELLA. Oh, I am almost through. Thank you. 

The CHAIRMAN. Well, if you want to take more, you can take it. 

Ms. BELLA. Okay. Thank you. 

The CHAIRMAN. Just say what you want to say. 

Ms. BELLA. Okay. Thank you. 

Just to finish up on our demonstrations, it is important to reiterate that our work will continue with a strong commitment to 

transparency, beneficiary protections, and public input. 

7 

We are also pleased to have launched our initiative to reduce 

avoidable hospitalizations among nursing home residents. In September, we announced the selection of organizations in seven 

States—those being Alabama, Indiana, Missouri, Nevada, Nebraska, New York, and Pennsylvania—to partner with States to reduce avoidable hospitalizations which are both harmful to people 

and costly to taxpayers. We are very excited that that initiative 

will begin touching beneficiaries early in 2013 around the February 

time frame. 

In conclusion, this testimony represents just some of the ways we 

are working to strengthen the Medicare and Medicaid programs 

and improve the everyday lives of individuals who depend on them. 

We will continue to work to align the programs, to better understand the population, and to test new models to provide better care, 

better health, and lower costs through improvement. 

I want to thank the committee for its continued interest in improving care for Medicare-Medicaid enrollees. With your continued 

support, we will keep working with States and other partners to 

advance high-quality, coordinated care for these individuals who 

depend on us the most. 

Thank you very much. 

[The prepared statement of Ms. Bella appears in the appendix.] 

The CHAIRMAN. Well, thank you, Ms. Bella. 

How many States, realistically, are going to participate in demonstration projects? And have you lined them up so they are different, not the same, and that they have criteria which are going 

to make sure there is no reduction in coverage for beneficiaries 

while at the same time achieving efficiencies for the Federal Government? 

Ms. BELLA. As you know, we had great interest in the demonstration models when we put them out, and we are working with 

25 States that are interested either in the capitated model or the 

managed fee-for-service model. We have three States that are interested in an alternative approach, because it appears that one of 

the other two models is not going to be a good fit for them. So of 

the 25, 13 of them are interested in moving ahead in 2013, and 14 

of them are interested in moving ahead in 2014. And you are probably asking why those numbers do not add up to 25. That is because two of the States are pursuing both of the models. So it 

is—— 

The CHAIRMAN. Do you have a sense among the fee-for-service on 

the one hand or the managed care on the other—we do not want 

to prejudge it, but which might show more promise? 

Ms. BELLA. Well, they both hold great promise because they will 

be tailored to fit the delivery systems of the States, and so we felt 

that that was very important to be able to work with the States 

in the types of programs they had today. 

The capitated model provides up-front savings in the way the financing is constructed for both the State and the Federal Government. The managed fee-for-service model looks at savings on a retrospective basis. Both of them require quality thresholds to be met, 

so we are ensuring that it is not just a cost-cutting effort. 

8 

Just to go back to your earlier point, the standards that we have 

in place will not let any model go forward that takes away something from a beneficiary. 

The CHAIRMAN. How are the capitation levels set in these States? 

What is the dollar amount, and who determines that amount? 

Ms. BELLA. We set a Medicaid and a Medicare component of the 

capitated rate. Part D stays, we use the national average bid for 

Part D. But the Medicaid and Medicare components are—first, we 

derive a baseline for each of them, looking at what spending would 

have been in the absence of the demonstration. We also are doing 

an analysis, and then those amounts are risk-adjusted to take into 

account the population. At the same time, we are looking at what 

we think the savings opportunity is through improved care coordination, through reduced duplication and inefficiencies, and through 

administrative simplification. And we look at the projected spending, and we look at the expected savings, and then a cap rate is 

developed, and the State and Federal Government each contribute 

their proportion to that rate that is then passed on to a health 

plan. 

We withhold a portion of that capitation rate to ensure that the 

plan meets certain quality standards, and that is how it is set. 

There is a lot more detailed information about that available on 

our website, and I am happy to provide any follow-up or—— 

The CHAIRMAN. But essentially it is negotiated between you, 

CMS, and the States primarily? 

Ms. BELLA. So, on the CMS side—— 

The CHAIRMAN. Or the plan has to be involved? So what is the 

negotiation here, or determination? 

Ms. BELLA. We do not expect to have a negotiation with the plan. 

CMS, we work closely with our Office of the Actuary to determine 

the Medicare baseline and to validate the Medicaid baseline. We 

have external actuaries who are helping us as well, and then the 

State and its actuaries provide analysis on the Medicaid component. 

The CHAIRMAN. So who sets it? 

Ms. BELLA. Ultimately, CMS sets the rate with, again, input on 

the Medicaid side from the State—— 

The CHAIRMAN. Right, and so what is the difference between 

what CMS is setting in these capitation States, on the one hand, 

and what you expect the costs to be otherwise? 

Ms. BELLA. Well, we set the rate assuming a savings amount to 

occur as a result of the integration through the demonstration. 

The CHAIRMAN. Do you have a percentage savings expectation? 

And how do you know how much you want to save? 

Ms. BELLA. Well, as you know, Mr. Chairman, we have not set 

a national savings target because, for us, this is about improving 

quality and care coordination that should lead to reduced costs. 

What we have done is look for where we think there are savings 

opportunities, and, for example, on the Medicare side, we think 

there are tremendous opportunities for saving on hospital admissions, on readmissions, on better medication management. On the 

Medicaid side, the lion’s share of savings comes from rebalancing 

and making sure we are providing more care in the community as 

opposed to institutions. 

9 

The CHAIRMAN. What are you doing to help minimize providers’ 

gaming the system? Because, you know, the patients are put here, 

or there, you know, just to make more money. 

Ms. BELLA. Well, I think that—— 

The CHAIRMAN. We are not, I guess, making more money, but we 

are—there is a lot of gaming going on, I suspect, which is part of 

the problem. 

Ms. BELLA. It is part of the problem, and what we are trying to 

do is establish accountability for the dollars and expect to hold an 

entity accountable for providing all the services. So, today, they 

might be able to sort of play Medicaid and Medicare off each other 

in an area like home health or durable medical equipment because 

both programs cover them and have different rules. But when they 

are responsible, and they have one pot of money to manage that, 

you take away some of those incentives for gaming between the two 

payers. 

The CHAIRMAN. Okay. My time has expired. Thank you. 

Senator Hatch? 

Senator HATCH. Mr. Chairman, I am going to allow Senator 

Grassley to go ahead of me, since he has another commitment. So 

I will just take my turn later. 

The CHAIRMAN. Sure. Senator Grassley? 

Senator GRASSLEY. Yes, thank you, Mr. Chairman, and thank 

you especially, Senator Hatch. 

I appreciate your being here, and I know you have a very tough 

job, particularly as we deal with dual-eligibles. They are a very expensive part of health care. They are about 10 percent of all Medicare and Medicaid beneficiaries, but account for more spending 

than either people eligible for Medicare only or people eligible for 

Medicaid only. We must find better ways to coordinate care and 

lower the costs for dual-eligibles. 

That said, dual-eligibles are a complex population. I have a chart 

here that will explain this better. While 62 percent are eligible, 38 

percent are under the age of 65. Sixty-two percent are elderly; 28 

percent under 65. While some are expensive and need extensive 

long-term support and services, there are dual-eligibles who are 

relatively low-cost. More importantly, though, is, not all expensive 

Medicare beneficiaries are dual-eligibles. 

So take a look at the chart. These are the most expensive beneficiaries in Medicare. These are beneficiaries who have multiple 

chronic conditions and functional impairments. Fifty-seven percent 

of them are eligible for Medicare only; 43 percent of them are 

dually-eligible for Medicare and Medicaid. 

So the question I ask is, but do not answer yet: Why are we splitting up the two groups? These are two groups of similarly situated 

individuals. They all have a need for better coordinated care. They 

all have multiple conditions that are expensive. So I have four kind 

of rhetorical questions I would like to have you address. I will state 

all four of them. 

Why do we tell some people, you get Medicare solely because you 

have income, and then we tell some people, you should get Medicaid solely because you do not have enough income? And why is 

it a good idea to give States control over low-income beneficiaries? 

Why should low-income beneficiaries get one of 50 different models, 

10 

meaning 50 different State models, to coordinate their care, and 

people with incomes then get Medicare, which is only one approach 

and that is a national approach? Why are we pushing States to 

take a greater role with a complex, expensive population when they 

also are being asked to find resources to cover poor individuals in 

Medicaid and develop exchanges to cover people in the private market? 

I would like to listen to you at this point, and I am very concerned that splitting these individuals makes no sense. 

Ms. BELLA. Thank you for those questions. I will do my best to 

respond. 

I think, first, we are fortunate that you all created this office to 

focus on people who get both Medicare and Medicaid, and we are 

actively working on solutions, new care models, to focus on people 

who have exactly the kind of care and cost profile that you represent today. And our hope is that what we are learning will be 

transferable, it will be transferable to the other 57 percent of those 

in Medicare. And similarly in Medicaid, the folks who are dualeligibles with disabilities look very similar to people with Medicaid 

only who have disabilities. And so, what we learn in those care 

models should be transferable as well. 

So I hope you see the investment in this office as a way to leverage those resources to be able to shed best practices that can be 

applied to all high-cost patients across both Medicaid and Medicare. 

And you raise important questions about States and the role of 

States. From my perspective, Senator, what we are trying to do is 

to create person-centered, high-quality, accountable systems of 

care. And this is not a one-size-fits-all approach. This is a very heterogeneous population, and we have to recognize that States are 

our partners in the delivery and financing of this care. 

So, we have focused on starting with States with a goal of, again, 

creating financial accountability and aligning incentives in the system, not so much with the goal of deciding whether Medicaid or 

Medicare should be the one driving that system. 

I think what is important and what gets to your point about, you 

know, why do people with higher incomes have Medicare and then 

they have variation if they also have Medicaid, the important thing 

to remember is that, in these demonstrations, we are not taking 

away anything that Medicare provides today to people who are 

dually-eligible for both programs. They are getting the best of both 

programs. We are taking both programs—each of them has their 

own strengths—looking at putting those strengths together, and 

then adding on to that. 

So, for example, in the Ohio and Massachusetts and Washington 

programs, beneficiaries are getting new services. They are getting 

protection from cost sharing that they do not have today. They are 

getting new resources. 

And I guess the last thing I would say is, you are exactly right 

that States have a lot on their plate right now, but this is an option 

that we have put out there for States. And States that have decided this population is a priority, we find that they are really committed to trying to work with us to make this happen. And I think 

11 

one of the reasons is because we are trying to make it tailored and 

flexible to their needs. 

Senator GRASSLEY. If I could have 10 seconds just for a rhetorical 

comment. I appreciate what you said, but I just have to point out 

that CMS is working for Accountable Care Organizations, working 

on that, which presumably targets the 57 percent of the high-cost 

beneficiaries while you encourage States to target the 43 percent 

of high-cost beneficiaries. So I have to ask a question that I do not 

expect an answer to at this point, but it is as much for my colleagues: Who is in charge of making sure that we find the best solutions for the 100 percent of the population? 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Rockefeller? 

Senator ROCKEFELLER. Thank you, Mr. Chairman, and good 

morning to you, Ms. Bella. I also respect what you are doing, and 

you are working on the most complex problem that health care has 

to offer, in my judgment, and it is yet unsettled. 

Let me just say I am not going to have time to ask the questions, 

a series of rapid-fire questions, so let me just say that my overall 

concern is that HHS is saying certain things that they are doing 

as a matter of policy, but, when it comes to the MOUs with the 

States, it is changing. There is slip-back. And I will follow up with 

written questions to you on this. 

To me, Medicare-Medicaid managed care is a model that has not 

been shown to work for even small numbers of dual-eligibles because of the varying range of intensity of services required to meet 

their special care needs. Why aren’t new and innovative models of 

care actually being developed? Why aren’t, for example, you testing 

a Medicare-only option for duals? 

I am going to continue. We should be letting the policy—providing high-quality, better coordinated care for duals—determine 

what our approach is, not cost saving. Not cost saving. It is very 

clear. 

Why is CMS pushing for an arbitrary savings target for dualeligibles under the capitated model in each State and letting that 

drive the policy? Now, that expands in complexity when you say, 

for example, with the State of Arizona, where there is a demonstration project you are looking at, Arizona is enrolling nearly 82 percent of their folks, duals, and Washington is enrolling nearly 92 

percent. And it just baffles me. Where is the robust evaluation plan 

for these State demonstrations? How can you do it? If you have 

that many people involved in a demonstration project, it is not a 

demonstration project. It is the inevitable formulation of policy. 

And I do not think that is what a demonstration effort is meant 

to bring out. 

So how can the demonstrations be effectively evaluated if the 

vast majority of a State’s dual population is enrolled, as is the case 

in many examples? Ohio has taken theirs down from 82 to 60 percent recently, but that brings up a new series of problems. 

So could you just sort of speak to those for a second? 

Ms. BELLA. Sure, I can start with your last question first. We 

have an external evaluator, RTI. We plan to have a very rigorous 

evaluation of the demonstrations, both across the demonstrations 

12 

and within each State. We have a commitment to having an ability 

to evaluate people in the demonstration with a comparison of people not in the demonstration. 

Senator ROCKEFELLER. But what if most people are in the demonstration? 

Ms. BELLA. We work closely with our evaluators to establish appropriate out-of-State comparison groups, looking at a variety of 

factors that enables us to feel like we have an ability to detect 

what was really the result of the demonstration. 

Senator ROCKEFELLER. Ms. Bella, I respect your words and I respect you, but I am not comforted by your words, by your answer. 

We have to have a way of breaking it down. It is just an enormous 

mass of people, in fact, up to one-third of the entire 9.4 million 

dual population in the country. And I do not think you can tell me 

that you can take a huge demonstration project with hundreds of 

thousands of people in it, and then sort of break it down within 

that huge number. It does not make sense to me. But you can explain that to me either now or later. 

Ms. BELLA. Sure. Your preference. I am happy to also come and 

talk to staff and sit down and share with you our evaluation plans. 

We have to have a rigorous evaluation. We have a rigorous evaluation. We have external folks helping us do that, and no State is 

going to get approved where we do not feel like we can rigorously 

evaluate it. 

And so that is a commitment that we have made, and we are 

happy to provide additional detail as to how that might play out. 

Senator ROCKEFELLER. What about the cost-saving factor? 

Ms. BELLA. These are not driven by cost savings. If this was a 

cost-savings initiative, we would have had a national savings target. We would have a savings target now. We do not. We have an 

obligation to learn what works for this population and to do it in 

a way that puts people first. 

And our other interest is in not continuing demonstrations in 

perpetuity, and the Innovation Center allows us to test and learn 

and modify and begin to take things to scale. But for those who go 

to scale, we have to see improvements in quality and cost. And so, 

cost is there. It is sort of that elephant in the room. It is always 

there. It is not driving our efforts. Never have we spoken of these 

as cost-containment vehicles. We see them as opportunities to improve coordination and quality, which should lead to cost efficiencies. But cost is not the driver here. 

Senator ROCKEFELLER. My time is up. I will need to follow up 

with you on your answers so far. 

Ms. BELLA. Certainly. 

Senator ROCKEFELLER. And there is another round of questions. 

Ms. BELLA. Thank you, Senator. 

The CHAIRMAN. Thank you, Senator. 

Senator Hatch? 

Senator HATCH. Thank you, Mr. Chairman. 

I want to start by applauding you and those who work with you 

for all the hard work you have done to improve care for those patients eligible for both Medicare and Medicaid. We all know we can 

do better than the status quo, but changing the status quo is always a tremendous challenge, and you are making your best efforts 

13 

to do it. And I want to thank you for both the thoughtful solutions 

and the tremendous energy that you have invested in this important task. Now, I do not want to continue to praise you for fear it 

might hurt you. [Laughter.] But I think you get the point. I think 

you are great. 

While I am supportive of the goals of the demonstrations, in 

order for them to be truly successful, I want to make sure we get 

a few things right. While we are solving problems for the duals, I 

want to make sure that we are not creating problems elsewhere. 

Medicare Part D has been a huge success in offering beneficiaries 

a choice of plans to fit their needs as well as a competitive bidding 

structure to keep costs in check. Now, Ms. Bella, under the demonstrations, prescription drug benefits will be paid for with a riskadjusted, predetermined rate which would be based on the national 

average Part D bid amount. I am concerned that moving millions 

of duals out of the competitive bidding system could undermine the 

integrity of the Part D program, and this is especially concerning 

because the opportunity to deliver benefits to the duals population 

is an incentive for drug plans to place competitive bids. 

Earlier this year, the Medicare Payment Advisory Commission, 

or MedPAC, sent a letter to CMS expressing concerns to this effect. 

Why did CMS decide not to require demonstration plans to submit 

competitive bids in the same way that other Part D plans do, including PACE and dual-eligible Special Needs Plans? Would CMS 

consider implementing a process for drug plans to begin submitting 

competitive bids by the second or third year of the demonstration? 

I just wonder if you could answer those questions for me. 

Ms. BELLA. It is an important area for us to be watching, certainly: Part D. I mean, Part D is something that we have kept intact for these demonstrations in terms of all the beneficiary protections and in terms of how we integrate that financing stream into 

the rate. 

I would say your concern about, are we undermining the market, 

is one that we are watching. We believe there are still incentives 

for drug companies to bid competitively, because they still want to 

be under the benchmark to receive low-income-subsidy individuals, 

or dual-eligibles who opt out, or any Medicare beneficiary who is 

not in those categories who still wants to look for lower premiums. 

So, we do think the competitive reason, the competitive incentive, 

is still there, but we are in close consultation with our Office of the 

Actuary and our colleagues in the Medicare components to ensure 

that the demonstrations are doing no harm to the financial competitiveness of that program. That is something that we are monitoring. 

If we do see that it is having an unintended effect other than 

what we had expected, then we will have to make modifications to 

ensure that it is effective for both the demos and for the rest of the 

Part D program outside of the demonstrations. 

Senator HATCH. Let me just ask you this question. CMS has now 

approved demonstration proposals from three States, with MOUs 

signed with Massachusetts, Washington, and Ohio. A big incentive 

for States to implement these demonstrations is the opportunity for 

States to share in the savings that come from better care management. 

14 

Now, could you walk us through exactly how that financing of 

shared savings would work, and also how CMS plans to monitor 

the savings as the demonstrations are really implemented? 

Ms. BELLA. Sure. Are you interested in both models? Okay. In 

the capitated model, what we do is, we look at where we think the 

savings are by integrating care and coordinating and reducing inefficiencies, and we develop a savings target. That savings target is 

applied to the amount that each payer would contribute, and so, 

while you might expect savings to accrue from Medicare maybe in 

the earlier years, you start to expect savings from Medicare in the 

later years of the demo. 

By putting the savings target available to both payers up front, 

you create a system where they work together in a way where the 

timing works together of when you expect to see savings in the program. And so there are no Medicare dollars going to States in this 

model. Simply, each payer is paying less toward the capitated rate 

than they would have otherwise. 

In the managed fee-for-service model, what we do is, we have a 

formula that looks at expected Medicare savings. We have a 

threshold for expected Medicare savings. We look to see if States 

met that threshold. We look to see what their Medicaid increases 

were, so we offset any Medicare savings with any increase in Federal Medicaid expenditures, so we make sure we are not creating 

opportunities to game the trust fund. And then, if quality thresholds are met, States can share in a portion of the savings that accrued to Medicare as a result of the investment the State made in 

Medicaid. 

Senator HATCH. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Hatch. 

Senator Bingaman? 

Senator BINGAMAN. Thank you very much, and thanks for being 

here to testify. 

Let me ask about this Initiative to Reduce Avoidable Hospitalizations that you have. I am trying to just understand: are there 

things about being a dual-eligible beneficiary that increase the likelihood that you will be hospitalized even though you do not need 

to be hospitalized? 

Ms. BELLA. I think this is the poster child case for misaligned incentives in the program, when you have Medicare paying for the 

hospitalization and Medicaid paying for the nursing home stay, and 

when there is an incentive for someone to have a 3-day stay in a 

hospital to come back out and receive the higher Medicare rate 

when they go back into the nursing home. So we do feel that the 

way the two programs are misaligned does increase the likelihood 

or increase the incentive for unnecessary transfers between hospital and nursing home settings for Medicare-Medicaid enrollees. 

Senator BINGAMAN. Let me understand that a little better. You 

are saying that there is an incentive to move the patient from the 

nursing home to the hospital because of higher reimbursement, or 

the other way around? How does that work? 

Ms. BELLA. I should say I am not such a cynic that I think that 

that is the all-driving force, but I think it is a pretty powerful force. 

Let us say that there are things in the nursing home that you 

15 

would like to think would be taken care of in the nursing home, 

like pressure ulcers or dehydration or things like that. Oftentimes, 

people with those conditions are taken to a hospital instead of provided care at the nursing home. When they go into the hospital, if 

they are in the hospital for 3 days and they come back out and they 

go back into that nursing home, they get the Medicare rate, which 

is higher than the Medicaid rate. And so, there is an incentive to 

see a bit of a churning going on. And what we are trying to do in 

this initiative is support the use of care management resources on 

site in the nursing facility that can take care of those problems so 

people are not going back and forth. 

Senator BINGAMAN. So there is an incentive for the people who 

are running the nursing home to have that patient moved out of 

the nursing home to the hospital for 3 days in order that, when 

they come back, they are under the Medicare rate? Is that what 

you are saying? 

Ms. BELLA. Correct. 

Senator BINGAMAN. Okay. And what is needed to fix that problem? Is that something we have to study for 6 years before we can 

fix it? Or is this something that you can fix by saying, this cannot 

happen anymore? 

Ms. BELLA. Let us hope we do not need 6 years. I think this is 

a start, by seeing how much of it is driven by the fact that we need 

more care resources on-site in the facilities, and then how much 

can we do—when can we make changes in payment policies that 

take away those incentives for this churning that we are seeing? 

And so, this initiative will offer us an opportunity to do both of 

those things. 

In addition, in our demonstrations, when we make one entity responsible for both sets of dollars, we take away that incentive for 

that shifting. And so, to the extent that people in nursing homes 

are participating in these demonstrations that we have been talking about, we should be able to address it that way as well. 

Senator BINGAMAN. The concern I have—I represent New Mexico; we are not in your group of States that are participating in the 

demonstration. So I guess 25 States are, 25 States are not. States 

like my State that are not, are you still able to assist them in solving a problem like the one we just discussed or not? 

Ms. BELLA. Absolutely. Our job is to be a resource for all States. 

So we have our office; we have something called an Integrated Care 

Resource Center, which is available to help States share best practices, get in touch with other States, those sorts of things; and we 

have this State Data Resource Center. All three of those sets of resources are available to all States. 

We actually have had conversations with Julie Weinberg, the 

Medicaid Director in your State, about, even though we are not 

working together in a demonstration, how can we work to support 

some of the efforts that New Mexico is trying to advance? So the 

short answer is ‘‘yes,’’ that is a job of this office, and when we learn 

things—for example, in the Nursing Facility Initiative, especially 

because this is rapid learning—we are not going to wait 31⁄2 years 

to know what works or not, we will be pushing that information 

out, encouraging adoption in other States. 

Senator BINGAMAN. Thank you very much, Mr. Chairman. 

16 

The CHAIRMAN. Thank you. 

Let me ask, when this hypothetical patient goes back to the 

nursing home and receives the higher Medicare payment, how 

many days does that patient receive the higher Medicare payment? 

And what is, on average, the differential in amount? 

Ms. BELLA. The differential, I would have to get back to you. 

The CHAIRMAN. Rough guess? 

Ms. BELLA. A third? Probably a third or more. 

The CHAIRMAN. And how many days is that—— 

Ms. BELLA. One hundred. 

The CHAIRMAN. One hundred days extra. A third more for 100 

days. That is a problem. Okay. 

Next is Senator Wyden. 

Senator WYDEN. Thank you, Mr. Chairman. 

Mr. Chairman, I asked for a minute before my 5 minutes begins 

on Medicaid to discuss the plans of Senator Bingaman, because I 

think we all respect him so much, and we have been discussing his 

accomplishments over the last few days. But everybody wants to 

know what Senator Bingaman is going to do next. [Laughter.] 

I think we learned a lot last night because, for those of us who 

saw him on Colbert last night, this is a man with a future in comedy. [Laughter.] 

Because all over America, people are tweeting this morning 

about where they can get to see Senator Bingaman in action. And 

I just want to take a minute, because I know everybody is asking 

about his plans, but I urge you to go to YouTube. It was hilarious. 

It was truly hilarious. [Laughter.] 

So to begin my 5 minutes, if I may—— 

The CHAIRMAN. I might say, Senator, if you ask Senator Conrad 

about Senator Bingaman’s plans, Senator Conrad will tell you that 

Senator Bingaman has invited all of us out to his house in Santa 

Fe when he leaves, and we are all to visit him in Santa Fe. 

Senator NELSON. Can he put us all up? 

The CHAIRMAN. I think he can. [Laughter.] 

Thank you. Go ahead. 

Senator WYDEN. Thank you very much, Mr. Chairman. 

Ms. Bella, first of all, we want you to know we appreciate your 

good work, in Oregon especially, because of the transformational 

waiver that we got where, in effect, we are going to be able to beef 

up quality at reduced cost. And, as you know, Oregon has really 

financially committed to that agenda. 

That is why I want to examine with you where we are with respect to these demonstrations for the duals, because Oregon has 

come to the conclusion that it is not financially viable for them to 

be part of the demonstration, and they note—and they say this specifically—that your technical advisory group that you had for the 

duals, not one person thought, as part of that technical advisory 

group, that the system could work for a low-cost State, a State with 

low fee-for-service reimbursement rates and high Medicare Advantage rates. 

So we now have the situation where there is no flexibility for a 

State like ours where spending is less than the States that are here 

today, and, in effect, we are going to be put at a disadvantage 

when calculating the baseline for these demonstrations, the very 

17 

States that are the future, the States that are most innovative and 

most creative, as you see with the application for our Medicare 

waiver. 

My sense is that you very much want to help States like ours, 

but that there is essentially almost a bias at OMB against these 

kind of innovative efforts. 

What is your thought about how we are going to get around this? 

Because, if we are in a situation where your own technical advisory 

group says that the baseline support is not going to work for a lowcost State, and you all to your credit are recognizing that we are 

in the vanguard, how do we get out of this vise? 

Ms. BELLA. We knew when we were developing these models that 

they would not work for all States, and I think we have discovered 

that the financing for a low Medicare fee-for-service State such as 

Oregon is a challenge. And the health plans there look at what 

they receive today through Medicare Advantage, which is considerably higher than fee-for-service or what they would receive through 

these demonstrations, and so we understand that. 

I think what we need to do—Minnesota finds itself in a similar 

position. We have been working with Minnesota on some administrative and regulatory efficiencies that do not address the payment 

issue at this point. Senator Wyden, we are early in learning, I 

think, and doing this analysis and validating the hypothesis as far 

as some of the challenges for a State like Oregon. And what I can 

commit to you is to continue working with the State to make sure 

that they have opportunities, and certainly opportunities that recognize the potential for quality and cost in that State. 

Senator WYDEN. I look forward to that, and I hope we can get 

this cleared out, because it almost undermines the initial thinking 

behind the transformational waiver. In other words, Oregon got 

that waiver, Oregon wanted to build the next step, and to face this 

kind of discrimination literally for doing a good job and doing a better job, in effect, than the States that got the green light, just does 

not make any sense. 

You referenced a negative impact with respect to policy for the 

duals when you were here before: the multiple cards for Medicare 

and Medicaid. Last year, Senator Kirk of Illinois and I introduced 

the Medicare Common Access Card Act. It is legislation that has 

been supported by senior groups, by the tech sector. It would upgrade the Medicare card seniors use by employing smart card technology, pretty much like the one that is used by the Department 

of Defense personnel. 

Would you have an opinion on generally the proposition of trying 

to move in this kind of direction and the fact that this could particularly be of benefit to the duals population, given what you said 

before? 

Ms. BELLA. Certainly, we are interested in ways to use technology to streamline and make systems easier for beneficiaries. I 

would be happy to go back and learn more about your legislation 

and then make a comment for the record. 

Senator WYDEN. Great. One last question, if I might. You also 

talked about State access to Medicare data, and I am very much 

in favor of that. The States are having to jump through hoops to 

gain access to it. Senator Grassley and I have introduced legislaVerDate Nov 24 2008 16:45 Dec 19, 2013 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 R:\DOCS\85983.000 TIMD
18 

tion that would open up the Medicare database so that the public, 

free of charge, could have that information, and obviously that 

would be another way to get it to the States. Wouldn’t that be, 

again, consistent with your philosophy of trying to empower States 

to use this data? 

Ms. BELLA. We certainly are trying to do everything we can to 

put data and tools into States’ hands, making sure we protect the 

privacy of the beneficiaries. 

Senator WYDEN. Very good. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Burr? 

Senator BURR. Thank you, Mr. Chairman. 

Ms. Bella, welcome. I think you are very familiar with North 

Carolina’s Community Care Program, and for my colleagues, Community Care is a demonstration or a waiver under the Medicaid 

program now serving 1.3 million North Carolinians in a patientcentered approach that has achieved significant savings over the 

life of it. And it extends a proven medical home model to dualeligibles that we are currently in the process of trying to get the 

approvals for from CMS. 

Let me ask you, Ms. Bella, what would disqualify a State from 

participating in the demonstration program? Is there something 

out there that is an automatic disqualifier? 

Ms. BELLA. There is no automatic disqualifier. I think one of the 

fundamental things we need to see in these programs is total integration of services. So we need to see that the medical, the behavioral health, the long-term care, the substance use, all of those 

things, are together. That is a challenge in some States. 

Senator BURR. If there is not a disqualifier, is it possible for a 

State not to be disqualified for a demonstration project but not be 

approved for a project that they have proposed? 

Ms. BELLA. It is certainly possible that all of these 25 States will 

not be approved. I mean, there are things that—there are reasons 

why the financing does not work, for example. There are some 

States that, quite frankly, are not doing the appropriate job engaging stakeholders, and so they do not have any buy-in into what 

they are doing, and that weighs a lot with us. There are some 

States that are not fully integrating the set of services. So there 

are reasons why States would not move forward, but there are no 

automatic disqualifiers. At least in the States that, where they are 

today, if they were going to automatically be disqualified, they 

would have already been disqualified. But we do have something 

called a set of standards and conditions that we expect all States 

to meet. 

Senator BURR. And North Carolina submitted their plan in May, 

and I commend CMS. They continue to discuss with North Carolina, negotiate about a way to move forward. 

I think I heard you say earlier to my colleague Chuck Grassley 

that we need to translate what is working, because the needs of a 

dual-eligible with a disability are similar to the needs of a Medicare beneficiary under the age of 65 with a disability. 

Ms. BELLA. I said a Medicaid individual under 65, a Medicaidonly. 

19 

Senator BURR. So if North Carolina currently covers the under65 with a disability under the Community Care, what would be so 

troublesome on the part of approving a plan that now covers the 

same population that is over 65? 

Ms. BELLA. So the challenge with these State proposals is they 

take time. This is complex. You know, in North Carolina’s case, 

there are lots of other issues we are working on with North Carolina, and North Carolina was involved with CMS on a 646 demonstration that involved duals, and there had to be discussions 

about, does that demonstration continue or how does it work with 

our demonstration? 

In North Carolina’s case, the biggest difference in taking what 

they are doing for Medicaid-only today is understanding how the 

networks and Community Care of North Carolina are going to 

bring in the Medicare piece, because that has been a difference. 

Senator BURR. So let me ask you this. It seems like there is a 

way for a State like North Carolina—I will not comment on Oregon; I do not know it. You discussed this process that CMS goes 

through to determine, here is what we would have spent, here is 

what we think you are going to spend, and, if the differential is 

great enough, we are willing to try this. There are other conditions, 

I realize, but strictly from a cost standpoint, why would you not say 

to a State like North Carolina, ‘‘Here is what we are willing to 

spend for this population. Go ahead and implement your plan. And, 

if you go over our amount, then you are stuck with the tab. If you 

save money, we split the savings.’’ 

Ms. BELLA. Well, North Carolina has not indicated to us that it 

wants to go at risk in that way. North Carolina has asked, could 

it participate in Medicare savings, and so we are going through 

this process with North Carolina to make sure that the protections 

to the trust fund, when we are going to make a payment to a State, 

and the quality mechanisms, are in place. 

Senator BURR. Well, I am trying to suggest to you possibly a new 

line of thought to break through with some of the States that are 

out there. They have not been disqualified. They have legitimate 

plans. They have not been approved. You are hearing, from members on both sides of the aisle, the frustration over the cost. And 

in North Carolina’s case, I can only say this—and I think those at 

CMS would agree: the success of Community Care has not only 

saved significant amounts of money, it has changed the health outcome of the individuals who are under the plan. It has brought 

what every member says is the future of health care, and that is 

a medical home model, to 1.3 million people, and we would like 

now to expand it to dual-eligibles. 

So I would encourage you to maybe throw some new things on 

the table. Maybe North Carolina will accept a risk-based proposal 

to do it. If they feel strongly enough in implementing the plan, it 

is worth a try, but to sit and not do either continues to eat up more 

money, continues not to achieve the health outcomes that we want, 

does not implement the medical home model. And I think you hear, 

in a bipartisan way, we want to move this thing forward. We do 

not want to do anything that jeopardizes the system. But where we 

are is not a comfortable place. 

Thank you. 

20 

Ms. BELLA. Thank you. 

The CHAIRMAN. Thank you, Senator. 

Senator Cantwell? 

Senator CANTWELL. Thank you, Mr. Chairman. 

Ms. Bella, you mentioned the rebalancing in your testimony, and 

one of the things I am interested in—well first, you know, about 

this discussion in general, I like to say this is Washington, and people like to regulate. But in Washington, my Washington, we like 

to innovate. And the innovation that we are doing in health care 

is not just about savings for us. I mean, we have had to do it over 

decades, and we have proven that innovation does drive better outcomes and lower costs. 

So what we want is, we do not want to be held back because we 

have had to do it to guarantee care. So I just want my colleagues 

to know, as challenging as these things might seem to us, it is an 

ethos now. It is beyond an ethos. We have proven success. We want 

to move forward, and we hope the rest of the country will do the 

same, because we are tired of paying for more expensive health 

care for the rest of the Nation as well and having our system jeopardized by the fact that we get paid less and so people do not want 

to practice there. But we have still innovated. 

Anyway, my point is, the rebalancing that you mentioned to 

community-based care and the provisions of the Affordable Care 

Act, we have already shown savings in rebalancing from nursing 

home care to community-based care. How do you think that rebalancing fits with this concept of the dual-eligibles? How would you 

integrate those two? 

Ms. BELLA. Well, the rebalancing is a critical part of what we are 

doing here. The point is, the system has an institutional bias, and 

so what we are trying to do is make sure we kind of take that 

head-on and promote models that are able to have financial accountability, but also flexibility to provide services to people in settings that are least restrictive and most appropriate and in line 

with their choices. 

Senator CANTWELL. So this would be like you would coordinate 

with the rebalancing? 

Ms. BELLA. Well, if you are talking about the formal programs—— 

Senator CANTWELL. Yes, the formal programs. 

Ms. BELLA [continuing]. And rebalancing incentives and all of the 

other programs coming out of Medicaid, yes. In any given State, we 

want to make sure that this is all coordinated and that we are 

looking at the same types of measures to look at indicators of success and understand that we are measuring dollars the same way 

as far as what is flowing to the community and what is flowing to 

institutions. So we are aligned with our colleagues back at CMS 

who are implementing the other more formal rebalancing programs. It is a goal of these demonstrations, though, and it is a 

measure that we look at as an outcome measure, to understand 

how these demonstrations made an impact in terms of home- and 

community-based services. 

Senator CANTWELL. And so, for some place like Washington State 

that did rebalancing 20 years ago or something like that, we would 

21 

be able to better integrate immediately a program on dual eligibility because the rebalancing is already so built into our system. 

Ms. BELLA. Correct. And this goes into looking at the Statespecific approaches. When we work with MaryAnne and others 

back in Washington, the opportunity for savings from rebalancing 

is different in a State like Washington that has been doing it 

longer than in other States. And so we have to take all of that into 

account when we develop these models so we understand how we 

are improving both quality in the rebalancing and the cost perspective. 

Senator CANTWELL. Okay. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Cardin? 

Senator CARDIN. Thank you, Mr. Chairman. 

Ms. Bella, thank you very much for your work. I want to follow 

up on the comments that have been made about incentives that 

lead to more expensive care. The point that you raised about the 

incentive to use hospital care over nursing home care because of 

the reimbursement structure is certainly troublesome. Over half of 

the cost of dual-eligibles is in long-term care, so I want to talk a 

little bit about long-term care. 

The incentives for a dual-eligible beneficiary tend to steer them 

toward nursing home care, when less intensive care may be appropriate and acceptable. Because of the reimbursement structure and 

their financial capacity, many beneficiaries have no option besides 

a nursing home. I know of other Medicare-eligible beneficiaries 

with alternative resources; they will use assisted living or even 

home care, which is less costly, because they have the ability to do 

that. 

So what can we do within the Medicare and Medicaid systems 

to provide greater incentives for less intensive services for dualeligibles? Every time we try to deal with this as a separate issue, 

CBO scores it as providing more services to the financially challenged, and, therefore, it is scored as a cost rather than a savings. 

How does this issue fit into your game plan? 

Ms. BELLA. That is a great question, and it goes back to what 

we were talking about with the rebalancing. States have made 

great strides in terms of providing home- and community-based 

services—supportive services, assisted living, home care, personal 

care, respite care—so that more and more people are able to be 

served in the community. And that is what Medicaid brings to this: 

the ability to fund those services in a way that Medicare does not. 

And so you see in the States, over time, the spending for the less 

costly services in the home and community increasing, while the 

institutional costs are decreasing because we are transitioning or 

keeping people out of those facilities. 

The incentives are still misaligned, though, in terms of, oftentimes those are not automatic in Medicaid, and you have a certain 

number of waiver slots which translates into the number of people 

that can be served, whereas the nursing home is a mandatory benefit. And so we still have some work to do in that regard. 

How it factors into these programs is just that it is a fundamental underpinning and expectation that these demonstrations 

22 

are going to make a dent in the spending between institutional and 

home- and community-based care, and we are measuring that, we 

are monitoring that, and we expect States to commit to certain outcomes where we are going to make those changes in that spending 

curve. 

Senator CARDIN. I would just say you also have a fundamental 

problem if you start to move toward assisted living, which is how 

you deal with the directed costs of health care and housing, whereas, in nursing home care, that is not an issue. So it does require 

a creative approach. 

Ms. BELLA. Yes. 

Senator CARDIN. Let me raise a related problem. We have a program in Maryland called HouseCalls, which is run by XLHealth. It 

is not part of a demonstration project. HouseCalls sends nurses to 

the homes of patients with chronic conditions soon after their discharge from a hospital or nursing facility, so that they can ensure 

compliance with discharge instructions and identify any issues that 

might lead to readmission. HouseCalls has been able to successfully reduce the readmission rate for their patients. In the under65 private health plans, insurers are providing a similar benefit, 

because they know they can reduce hospital readmissions by giving 

better services to those who are vulnerable after being discharged. 

The difficulty again here is scoring. If these services are not part 

of a capitated plan or a demonstration project, how can we offer incentives to provide that level of care, which we know will reduce 

the number of readmissions, but which the Congressional Budget 

Office will not score as savings when we try to do it? Do you have 

any suggestions as to how we can implement that type of policy 

other than as part of a specific demonstration project? 

Ms. BELLA. That is a very good question. I think we are increasingly finding opportunities to do things like that, that do not score 

in non-capitated environments, through some of the Accountable 

Care Organizations, through the bundled payments, and through 

other mechanisms. 

An array of the Center for Medicare and Medicaid Innovation 

(Innovation Center) initiatives—Independence at Home, Comprehensive Primary Care, Multi-Payer Advanced Primary Care, 

and many others—will help us build the evidence base to determine whether such models are effective at lowering costs and improving care. The Innovation Center commitment to rapid-cycle 

evaluation is unprecedented and provides CMS a new opportunity 

to share results with Congress and others, allowing them to make 

evidence-informed decisions about the health and long-term care 

changes that are critical to improving outcomes while lowering 

costs. As evidence from these models becomes available, CMS is 

happy to work with you and your staff on your policy proposals. 

Senator CARDIN. I know there is interest in Maryland in moving 

forward on that. We have a good track record with the under-65 

population showing that savings can be achieved. And I would appreciate further discussion on this to figure out creative ways that 

we can advance these ideas. 

Thank you. 

Ms. BELLA. Thank you. 

The CHAIRMAN. Thank you, Senator. 

23 

Senator Carper? 

Senator CARPER. Thanks, Mr. Chairman. 

Welcome, Ms. Bella. It is great to see you. Thank you for your 

service and thanks for being here with us today. 

Senator Hatch, earlier in the hearing you mentioned to the chairman your interest in maybe bringing the Secretary of the Treasury 

to talk with us a little bit about the fiscal cliff. 

Senator HATCH. It would be great if we could. 

Senator CARPER. I think one of the things that most of us know 

in this room is that whatever agreement is struck by the President 

and the Speaker—my hope is that they will reach an agreement— 

it is going to involve trying to find ways to get better health care 

results for less money or better health care results for the same 

amount of money. And the other half of the bargain is going to be 

to figure out how to raise some revenues and at the same time do 

it in a way that fosters economic growth. 

This hearing—and this program—is really a poster child for better health care results for less money and answering the question, 

can we actually get better health care results for less money or the 

same amount of money? I think the answer is ‘‘yes.’’ And to the extent that we can do it in this particular program, we help the 

States. As an old Governor, I can tell you the States are getting 

killed on Medicaid costs. It is just sucking away money from K–12. 

It is sucking away money from post-secondary education, and we 

have to find ways to stem that loss. 

We operate under two imperatives—well, more than two, but at 

least two that I want to focus on. One of those is a moral imperative, and the moral imperative is to look out for the least of these. 

And the relevant description, in the Book of Matthew, the least of 

these it refers to is, you know, ‘‘When I was hungry, when I was 

sick, when I was thirsty, when I was naked, or imprisoned, did you 

visit me?’’ Well, the Bible does not say anything about duals, the 

dual-eligibles being the least of these, but they are, and we have 

a moral imperative to look out for them. 

At the same time, even if the President and the Speaker strike 

a deal and we are able to come in with legislation to back it up 

next year, we are still going to have huge budget deficits. Huge 

budget deficits. And everything that we do in the Federal Government, whether it is health care, whether it is transportation, it is 

defense, it is education, it is housing, virtually everything we do, 

we are going to have to look at it through that prism. How do we 

get better results for less money or the same amount of money? 

As I put on my old hat—and former Governor Rockefeller wore 

this hat at one time—we know that the States are the laboratories 

of democracy. You have 50 States, and I used to say to my own cabinet when I was Governor, some State somewhere, whatever problem we are wrestling with, some State somewhere has figured out 

how to solve this problem. And the challenge for us in Delaware 

was to find out who solved it, and to find out how they solved it, 

and is that solution transferable, replicable, exportable back to my 

State and to other States? 

We actually created within the National Governors Association a 

mechanism called the Center for Best Practices. It is a clearinghouse for good ideas. And if, say, Utah has an idea on this or some 

24 

other subject that actually works for you, well, we could find out 

about it. We could find out who to contact in Utah, learning about 

it, is it replicable, is it exportable, and so forth. 

That is a great incentive for States. States compete with one another in a very fruitful way. But one of the ways we compete is for 

jobs, and we want to grow jobs and economic opportunities in my 

State. One of the key factors for job growth, and companies wanting to be located in States, is health care costs. It is other things. 

It is regulations, it is taxes, it is all kinds of things. But it is inclusive. Quality health care outcomes for less money. So there is a 

great competition for States. As States are trying to balance their 

budgets, compete for jobs, and so forth, there are all kinds of market forces that are really encouraging States to look for better results and to be our partner. 

Here is my first question. That was a long preamble. My first 

question is, what are we doing or what are we not doing that can 

help us actually foster more participation, more successful participation, in these programs? How can we be a better partner in the 

legislative branch? Please start with that. 

Ms. BELLA. Well for us, you have done the greatest service by 

creating this office and by giving us the opportunity to try to dabble in many different areas—program alignment, data and analytics, and models and demonstrations—and to just give us this opportunity to continue to inform you along the way as the work progresses and as we learn things that we think might be worthy of 

permanent change. 

Senator CARPER. We had a hearing in the Homeland Security 

and Governmental Affairs Committee about a year ago. We had the 

Medicaid Directors from several States in, and one of the questions 

we asked of them was: In Medicare, we are doing a pretty good job, 

a better job every year, of going out in recovery audit contracting, 

and monies that are mis-paid, mistaken payments and so forth in 

Medicare, we are going out and recovering them and returning that 

money to the Medicare program. We are doing almost nothing in 

Medicaid. And we asked a question of the Medicaid Directors: Why 

is that? The guy from New York who runs the Medicaid program 

there came back and said, ‘‘Well, you only gave us like 60 days to 

go out and recover the money, and that is really not enough time. 

We need more time.’’ I said, ‘‘How much? Six months? What do you 

need?’’ He said, ‘‘A year.’’ So that is what we did. Guess what? 

They are starting to recover money for the Medicaid programs. 

Half of it comes back to the Federal Government, half of it comes 

back to the State governments. That is the kind of thing I am looking for. That is the kind of thing that I am looking for, and whether you have ideas here or not, that is what we need. 

The other thing I wanted to say is, where is the nexus between 

what we are doing here with the PACE program and what we are 

doing here with the duals? What is the nexus with the federally 

qualified community health programs? How do they intersect? And 

how are we making sure that we are maximizing utility from both, 

the contribution from both? 

Ms. BELLA. Well certainly, the Federally Qualified Health Centers are important parts of the safety net system and the delivery 

system in States. Some States rely more heavily on them than othVerDate Nov 24 2008 16:45 Dec 19, 2013 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 R:\DOCS\85983.000 TIMD
25 

ers, and so, as we develop these models and these demonstrations 

with States, the FQHCs will have a different role to play in each 

of them, but we expect that they are a vital part of the delivery 

system for States in putting together these demonstrations. 

Senator CARPER. I would urge you to think about that some more 

beyond this, and my hope is your staff here will be thinking about 

that. 

The other thing is, in Delaware, federally qualified community 

health centers are all using electronic health records. They have 

the ability to go back and forth with our acute-care hospitals for 

the most part, and to better coordinate the delivery of health care. 

I just want to make sure that we are taking every advantage of 

those kinds of opportunities. 

And lastly, Albert Einstein, Mr. Chairman, used to say, ‘‘In adversity lies opportunity.’’ There is a huge amount of adversity here, 

a lot of churning here, trying to figure out how do we work with 

this new law, how do we work with the States and coordinate with 

the providers and so forth, but there is great opportunity here. 

There is great opportunity. We have to seize the day, which we say 

in Latin, ‘‘Carpe diem,’’ but which we say in Delaware, ‘‘Carper 

diem.’’ [Laughter.] 

The CHAIRMAN. Every day is ‘‘Carper diem’’ in Delaware, as well 

as in this committee and in the Senate. 

I think Senator Rockefeller would like to ask a couple more questions. 

Senator ROCKEFELLER. Thank you, Mr. Chairman. 

Ms. Bella, I think what, sort of generally, I am worried about is 

that MedPAC, for example, wrote a letter in July, stating, ‘‘Even 

if the Commission agrees with CMS’s stated guidelines, there is no 

assurance that the final structure of the demonstration within any 

given State will be fully consistent with CMS’s guidelines.’’ 

I care a lot about CMS’s guidelines. I want to make sure that 

they are enforced, and that gets into the question, you know, in 

North Carolina and other States we can save a lot of money if we 

do this or if we do that. That is not the primary role at the beginning as demonstration projects are evaluated. 

Then you have sort of transparency here, you know. CMS has to 

be the model that sets the standards that every State or parts of 

States or demonstration variations reach. 

Now, you have large numbers of people enrolled in certain 

States, and then you said, well, we have this third-party group that 

comes in and sort of evaluates what they are doing. But that does 

not tell me that CMS is putting out or laying down what the standards have to be before States start doing these experimentations 

and demonstration projects. I mean, I really think that is important. And then MedPAC does, too, and I have a lot of respect for 

them. 

Let me just give you an example. Maria is going to be furious at 

me. Lock-ins, consumer protections—fifty-eight percent of duals 

have cognitive impairments. Now, this is the question of people 

making the decision whether they are going to be a part of it or 

not. Numerous duals face language barriers, do not understand. 

They have low literacy rates, or they are blind. And yet only nine 

26 

States plan to provide access to independent advocates to make decisions, help people make decisions and navigate changes. 

Now, again, everything comes back to CMS guidelines, meeting 

that standard. That is what, you know, the Secretary says, and 

that is what the deal is. 

In Texas, people are writing all kinds of responses, which are 

being totally ignored by Texas, and I think by CMS, because Texas 

is kind of staying away from all of that. 

One of the things that is going on in Washington, as I understand it—and with all due respect to one of the great, great States 

of America—is a lock-in plan. Not true? Okay. Well then, can you 

further take me to the fact that there will not be, either at the beginning of the process or at the end of the process, a lock-in plan 

involved in this whole process? 

Ms. BELLA. There is no lock-in in these demonstrations. States 

may propose them. CMS has said, and will continue to say, there 

will be no lock-in to this demonstration. People can opt out of the 

demonstration, or change a plan in the demonstration, monthly. 

Just like dual-eligibles have that opportunity to do so today. 

And to your point on—I just want to assure you CMS has guidelines, and we have put those guidelines out. We have further memorialized them in the MOU. They cover Medicare—— 

Senator ROCKEFELLER. How do you do that? 

Ms. BELLA. The MOU is pretty clear on what our guidelines are. 

What we have not been able to talk about today is, we have a readiness review process that is very rigorous. I would be happy to 

share it with you. It is 73 pages of things that plans have to do 

to prove to us they are ready. That gets into network adequacy and 

provider accessibility. It gets into call centers to make sure that 

they can address all the folks you were just talking about. In addition, the readiness review happens before plans can accept enrollment. But we do not stop there. We have implementation monitoring. So there are milestones that have to be met before the next 

round of beneficiaries goes into demonstration plans. This is not 

like Part D where everybody goes in one day and the whole population is in. We phase it in because we want to be careful and deliberate about it. We want to make sure these milestones are hit. 

Then we have ongoing implementation monitoring, where the 

State and CMS share this role, but it is a very rigorous process. 

The combined demonstration that we have here is much more rigorous than what we have independently today for these dualeligibles where no one is helping coordinate or navigate their care. 

And to the extent that this provides you any comfort, I mean, 

States are expected to provide new resources. Those come in the 

forms of independent enrollment brokers—independent choice 

counselors. We are supporting, CMS is supporting, funding for 

State Children’s Health Insurance Programs and Aging and Disability Resource Centers to help beneficiaries. States are expected 

to use ombudsman. As you see in Ohio, it is very specific about the 

role of an ombudsman for this program and then all of the other 

resources that exist. But these programs will not succeed if we are 

not effective at reaching beneficiaries, and so I can assure you CMS 

has standards, and we have expectations, and I am not sure what 

27 

number of States you were referencing there, but expect to see all 

of these demonstrations contain those important provisions. 

Senator ROCKEFELLER. Okay. Well, my time is up. I will follow 

up with a series of questions with you, and we can talk and all the 

rest of it. You know, 9.4 million dual-eligibles, the most complicated subject in health care, and then the assumption that 

States are just going to kind of do the great job they have, or have 

all kinds of creative ideas, you know—Medicaid has worked pretty 

well, but this is an example where the Federal Government has to 

lay down standards. And you are doing that, but I just worry, with 

this enormous proliferation of populations and then breakdowns of 

demonstrations within populations, that these standards will not 

be met. And it is not, how much will they cost? What will have to 

be done to this program will be much more expensive than what 

goes on today. But that is okay to know that at the beginning, because then we have to make adjustments to that. But guidelines, 

quality guidelines, have to be the commanding principle. That is all 

I am saying. 

[The questions appear in the appendix.] 

The CHAIRMAN. Thank you, Senator. 

I just found this interesting. We had an earlier discussion about 

the differential between Medicare reimbursement and Medicaid reimbursement for patients in nursing homes. The data I have is 

from MedPAC. On a per day basis, Medicare pays between $427 

and $395 a day to nursing home patients. Medicaid pays—the national average is $160. So it is about 21⁄2 times difference between 

the two. 

Okay. Now I will call the second panel. Thank you, Ms. Bella, 

very, very much. I really appreciate that. 

Senator ROCKEFELLER. And you did not answer my ‘‘all Medicare’’ question—that was my first question. 

The CHAIRMAN. She will for the record. Thank you. 

[The information appears in the appendix on p. 63.] 

The CHAIRMAN. Okay. I would like to call up the next panel, and 

I would like to introduce them as they come up to the table, asking 

each to restrict his or her statement to 3 minutes to enable us to 

ask questions—for the panelists to speak, for members of the committee to ask questions—because I think there is a vote scheduled 

at 12 o’clock. 

The second panel includes: Tom Betlach, the Director of the Arizona Health Care Cost Containment System; MaryAnne Lindeblad, 

Director of the Washington State Health Care Authority; and John 

McCarthy, Director of the Ohio Department of Job and Family 

Services, Office of Health Plans. 

Senator Cantwell, I believe you want to make an introduction. 

Senator CANTWELL. I will go quickly, Mr. Chairman, because I 

know we want to get to those questions. I just want to introduce 

and thank Ms. MaryAnne Lindeblad for being here today from 

Washington State. As many of you know, this dual-eligible issue 

and innovation I think go hand in hand, and Washington is a State 

with Microsoft and Boeing, and we always think a lot about innovation, but we also have Group Health and the Everett Clinic. And 

Ms. Lindeblad, who is Director of the Washington State Health 

Care Authority, has many years of experience and a master’s in 

28 

public health from the University of Washington, and she has had 

time in her career at DSHS in our State, and, in her current role, 

she has served as Assistant Secretary for the Aging and Disability 

Administration in the Department of Social and Health Services. 

So I am just thrilled that she is here today to add to this discussion with her many years of experience. I thank her for her chairmanship of the current Medicaid Managed Care Technical Advisory 

Group and the Executive Committee for the National Academy of 

State Health Policy and Long-Term Care. And I would just add 

98118 is the most diverse zip code in all of the United States, and 

that is Washington State. So when it comes to this issue of language and it comes to the communication issue, I guarantee you, 

we are on top of it. We have to be. 

Thank you. Thank you, Mr. Chairman. And again, thank you, 

Ms. Lindeblad, for traveling here to testify. 

The CHAIRMAN. Yes, thank you, Senator, very much. 

Okay. Mr. Betlach, you are first. 

STATEMENT OF THOMAS J. BETLACH, DIRECTOR, ARIZONA 

HEALTH CARE COST CONTAINMENT SYSTEM, PHOENIX, AZ 

Mr. BETLACH. Thank you, Mr. Chairman, members of the committee. Thank you for the invitation to discuss Arizona’s use of 

managed care to improve the lives of individuals enrolled in both 

the Medicare and Medicaid programs. Arizona has maintained a 

system of managed care for its entire membership, including dualeligible members, since joining Medicaid in 1982. Arizona also offers the unique perspective of a State that has one-third, or 40,000, 

of its dual-eligibles in their Medicaid health plan for both Medicare 

and Medicaid. 

Thirty years of experience have shown it is precisely our frailest 

members who are most in need of the care coordination managed 

care offers. Medicare managed care for dual-eligible members is not 

an experiment but, rather, a documented success. In Arizona, 82 

percent of our elderly and physically disabled population that is at 

the risk of institutionalization is dually-eligible. The model of care 

for this population in many States is nursing home placement. 

Over the past decade, Access and its health plans have progressed 

from 40 percent of its members in the home or community to 73 

percent, saving $300 million this past year. For members at risk 

of institutionalization with a developmental disability, 98 percent 

live at home or in the community, contributing to Arizona’s 

number-one ranking by United Cerebral Palsy. 

More importantly, keeping people out of institutions increases 

member satisfaction and offers a higher quality of life, providing 

the right kinds of care coordination to keep people at home as a 

Medicaid skill set. 

Recently, Avalere Health compared national data for duals enrolled in traditional Medicare fee-for-service to dual-eligibles served 

by Access Health Plan for both Medicare and Medicaid. Aligned Access duals exhibited a 31-percent lower rate of hospitalization, a 

43-percent lower rate of days spent in a hospital, 9-percent lower 

emergency room use, and 21-percent lower readmission rates. 

Alignment works. Equally important, Arizona has proven passive 

enrollment works. When Medicare Part D was created, Arizona enVerDate Nov 24 2008 16:45 Dec 19, 2013 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 R:\DOCS\85983.000 TIMD
29 

couraged its Medicaid plans to become Medicare Advantage Special 

Needs Plans. In 2006, approximately 39,000 members were passively enrolled in their Medicaid plan to provide better continuity 

of care for Part D implementation. Arizona’s strong transition planning and protocols successfully ensured member protections with 

minimal disruption during this process. 

Given our documented success in improving the delivery system 

for dual-eligibles, Arizona enthusiastically participated in the dual 

demonstration initiative. After extensive stakeholder engagement, 

Arizona submitted a proposal that sought to increase dual alignment from 40,000 to 100,000 beneficiaries on January 1, 2014. I applaud the passionate and consistent leadership Melanie Bella has 

provided to bring about change. Despite her efforts, the process has 

moved slowly. 

The current system is indefensible and unsustainable. We should 

not wait any longer to build upon a proven model. One of the significant concerns we have is what happens when we are successful 

3 years from now. Forty-seven years ago, Congress designed a system of care that required low-income elderly and disabled Americans to receive their health care from two distinct massive and 

complicated systems. The result is what one would expect: a fragmented, complicated, bureaucratic delivery system with higher 

costs, poorer outcomes, and no single point of accountability. 

As we rapidly approach the golden anniversary for Medicaid and 

Medicare, it is time for Congress to act in partnership with the 

States to develop a new system that will eliminate fragmentation 

and confusion while better meeting the needs of dual-eligible members and their families. 

Thank you again for the opportunity to share briefly our experiences in Arizona. 

[The prepared statement of Mr. Betlach appears in the appendix.] 

Senator ROCKEFELLER [presiding]. Please, go ahead. 

STATEMENT OF MARYANNE LINDEBLAD, DIRECTOR, WASHINGTON STATE HEALTH CARE AUTHORITY, OLYMPIA, WA 

Ms. LINDEBLAD. Thank you. Chairman Baucus, committee members, and distinguished guests, it is my great pleasure and distinct 

honor to report on Washington State’s HealthPathWashington, 

which is a forward-looking Medicare-Medicaid initiative aimed at 

integrating primary and acute care, behavioral health, and longterm care services and supports. It is a more cost-effective structure that will save Medicaid dollars, but its real purpose is to improve care and the overall health status of our clients. 

The initial strategy will begin in April next year with newly developed and community-based health homes for up to 30,000 of the 

State’s highest-need dual-eligibles. While the dual-eligibles only account for 13 percent of our State’s Medicaid caseload, they account 

for 30 percent of our costs, so this is a priority project on several 

levels, including the need to provide more effective care for this 

population. Many, if not most, experience significant challenges 

caused by disability, mental illness and/or chemical dependence, 

which complicate delivery and payment mechanisms. 

30 

Today, Washington is already moving forward to implement 

HealthPathWashington’s multi-pronged approach to improve beneficiary experience in accessing care, promote person-centered 

health action planning, promote independence in the community, 

improve quality of care, assist beneficiaries in getting the right 

care at the right time and place, reduce health disparities, improve 

transition among care settings, and achieve cost savings for the 

State and Federal Government through improvements in health 

and functional outcomes. 

By using two financial models, our first strategy will focus on incorporating high-risk dual-eligibles into health homes as part of a 

managed fee-for-service financial demonstration. 

The second strategy, which is still being negotiated with CMS 

and with counties that are going to take a leadership role, will offer 

dual-eligibles a fully capitated combined Medicare-Medicaid managed care benefit. Both strategies will rely on a predictive modeling 

system called PRISM. It stands for Predictive Risk Intelligence 

System. PRISM is a system developed by our State to sift health 

care data and assign risk scores that identify those clients in need 

of chronic care management and timely interventions that will provide more effective care. 

Stakeholders have been invited to participate in our program 

through a number of methods. We have included them in a variety 

of ways—interviews, forums, presentations, focus groups, webinars—and have asked them to submit written comment on our 

draft design plan and to continue to comment. 

Of particular importance to all was the preservation of consumer 

choice and development of adequate consumer protections. For example, while both of the State’s strategies rely on passive enrollment, they also support optional disenrollment at any time. We will 

continue to work with stakeholders and other interested and impacted parties as the work on the project now moves from the design phase to the implementation and planning phase. Materials 

for outreach, education, and training will be developed and shared 

with our HealthPathWashington advisory team, a group of 35 

members representing advocates, providers, health plans, and 

beneficiaries that continues to meet regularly to assist with the implementation of this financial demonstration. 

Concern about duals is not new. Since Governor Gregoire chaired 

the National Governors Association, the NGA has included, as part 

of its standing health policy, language in support of State-Federal 

coordination with respect to duals. As recently as this month, members of the NGA Executive Committee met with President Obama 

and Vice President Biden at the White House and raised the importance of working together on dual-eligibles. 

In a nutshell, the problem that duals face traces back to the fact 

that almost all care and payment for Medicare and Medicaid beneficiaries are handled through separate systems and financial models. Services are fragmented, care is not well-coordinated, and there 

exists a lack of accountability to make sure that healthy outcomes 

are measured or achieved and that individuals receive the right 

care at the right time and place. 

HealthPathWashington targets these concerns and provides realistic solutions—a better-planned, better-coordinated, cost-effective 

31 

system that will provide a healthier dual-eligible population, significant cost savings, and an improved care structure. 

Thank you. 

[The prepared statement of Ms. Lindeblad appears in the appendix.] 

Senator ROCKEFELLER. I thank you. 

Mr. McCarthy? 

STATEMENT OF JOHN B. McCARTHY, DIRECTOR, OHIO DEPARTMENT OF JOB AND FAMILY SERVICES, OFFICE OF 

HEALTH PLANS, COLUMBUS, OH 

Mr. MCCARTHY. Chairman Baucus and members of the committee, thank you for the invitation to discuss Ohio’s ongoing effort 

to create and implement an Integrated Care Delivery System for 

Medicare and Medicaid enrollees. 

My name is John McCarthy, and I oversee the Office of Medical 

Assistance as Medicaid Director for the State of Ohio. An office 

within the Ohio Department of Job and Family Services, OMA is 

currently in the process of becoming our State’s first cabinet-level 

Medicaid agency—a move aimed at bringing comprehensive reform 

and quality improvement to Ohio’s health care landscape. Better 

care planning and coordination for Medicaid’s dual-eligible population is central to this work. 

Approximately 182,000 Ohioans are covered by both Medicare 

and Medicaid. However, the absence of any significant degree of coordination in the delivery of benefits between the two programs has 

contributed to a diminished quality of care. Frankly, the current 

system is confusing and difficult to navigate, and no single entity 

is accountable for the whole person. Additionally, despite substantial investments, Ohio’s long-term care services and supports remain in the third quartile of States, and such spending will prove 

unsustainable with the rapid aging of Ohio’s population. This has 

led to the fact that individuals enrolled in both programs make up 

14 percent of Ohio’s Medicaid enrollment, but they account for 34 

percent of all expenditures. Clearly a ‘‘hot spot’’ in the discussion 

involving care quality and cost containment, the time has come to 

improve coverage for individuals enrolled in both Medicare and 

Medicaid. 

In its efforts, Ohio is hoping to achieve the following: one central 

point of contact for enrollees, person-centered care that is maintained seamlessly across services and settings of care, and a system 

that is easy to navigate for both enrollees and providers. 

Of course, in order for any initiative of this kind to prove effective, it must place the individual first. That is why we have made 

every effort to emphasize the need for real person-centered care 

that moves seamlessly across services and care settings alike. 

A series of enrollee protections have also been included to ensure 

that high standards for care are maintained on a consistent basis. 

With at least two plans in all regions, beneficiaries will have the 

power to choose what avenue of care best fits their needs. Eligible 

individuals also reserve the ability to opt out of the Medicare portion of the initiative if they so choose. ICDS plan member advisory 

groups will also be established and a unified grievance and appeal 

process will be implemented in order to further assure individuals 

32 

that their needs and concerns are being heard. Finally, strong safeguards will be put into action to ensure quality management and 

proper oversight over all aspects of this initiative. 

However, the number-one protection for individuals in the program is that they are guaranteed continuity of care for 1 year with 

all providers, except for assisted living and nursing facility providers, where they are guaranteed 3 years. Providers have also 

been protected from rate reductions from the Medicaid rates for 

those same periods. 

The power of choice for beneficiaries is a common theme throughout the proposal, and that is no different in the enrollment stage. 

Individuals will have opportunities to make choices during the 

process, such as consulting over the phone with an enrollment contractor, during regional education and enrollment forums, or 

through one-on-one in-person enrollment counseling. 

It is important to note that Ohio has engaged with stakeholders 

and advocates throughout the design and development phases of 

this demonstration project. In order to ensure success and maintain 

a truly collaborative process, we will continue to reach out to providers, advocates, and individuals throughout the implementation 

and operational phases of this project. 

Thank you again. 

[The prepared statement of Mr. McCarthy appears in the appendix.] 

Senator ROCKEFELLER. Thank you very much, all of you, for 

being here and for the work that you do on the real front lines, 

called ‘‘the rest of America.’’ 

I am not going to deviate from my previous line of questioning 

because I am not satisfied with the responses that I got, so I am 

going to try it out on you all. And it is this business of lock-in. People can get locked in without having it a rule because they passively become a part of it simply because they qualify or they meet 

certain criteria. But they do not know because—you know, I mentioned they do not speak English or they are blind or have different 

impairments. They do not really know what this is all about, even 

dual-eligibles. I probably could give a rather short statement about 

what it actually means to them. And I brought up Senator 

Cantwell’s Washington, and I said there are lock-ins in there, and 

I was pushed back strongly on that. 

But I am not sure that I am wrong, because, if people are passively included simply because they meet certain criteria, that does 

not mean that they are there because they want to be there or that 

they have the chance to opt out either at the beginning of the program, which would be less likely for those who have some of the 

disabilities that I referred to, or as the demonstration developed 

more in its work with CMS. 

Can you talk with me about how you work as States with CMS 

on the question of guidelines and on questions like lock-in/lock-out 

passive enrollment? How do you do that? Anybody? 

Ms. LINDEBLAD. I would be happy to answer what Washington 

is doing, and I think it is unique in its own right. So, one of the 

things that we have done with the program that we are starting 

in April next year is that, while individuals are passively enrolled—and we use that term—there has to be a face-to-face interVerDate Nov 24 2008 16:45 Dec 19, 2013 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 R:\DOCS\85983.000 TIMD
33 

action with that individual before they are really officially enrolled. 

So, when we talk about these health homes, a health home coordinator needs to meet with the individual, develop their health action 

plan. So that first step, that is a cooperative development between 

the individual and the care coordinator. They set their individual 

health care goals during that assessment. And at that point, that 

assessment is billed for, and that is when the person is truly enrolled. 

So, until they have that face-to-face, until they have a better understanding of the program—and if someone has limited English 

speaking, there will be interpreters there. We will help them 

through that. But they will have that face-to-face with an individual whom we are hoping will have had some connection with the 

client, even in the past. 

So, when we do this passive enrollment and assign a person to 

a care-coordinating entity, that care-coordinating entity will have 

history on that individual, will know which community of resources 

that individual is already accessing, and try to link them with a 

care coordinator who is part of that. So for us, it is really important 

that the member is engaged in that decision about whether they 

want to be in the program or not. 

Senator ROCKEFELLER. But you do have interpreters available? 

Ms. LINDEBLAD. Absolutely. We have a very strong—— 

Senator ROCKEFELLER. And you do have people, maybe they do 

not need interpreters, but they are confused about the program, 

and you have people available. 

Ms. LINDEBLAD. People to help them. 

Senator ROCKEFELLER. That is my point, you see? And Senator 

Cantwell—and we tease about this, but Washington is a superior 

State. You always have been. 

Ms. LINDEBLAD. We think so. 

Senator ROCKEFELLER. You are. [Laughter.] 

I mean, you have services, you are innovative, you are ahead. Oregon is the same way. In many ways, Minnesota and Wisconsin are 

very advanced in their thinking, et cetera. But most States are not. 

All States are going to face huge budget cuts, because we are facing 

them here, and that will be passed on down to you, and maybe 

some of those interpreters will disappear—not because you want 

them to, but because you do not have the money to pay them. And 

that is where we are doing demonstrations and trying to pick out 

what works best. 

And then I further asked, if you have a big population in one 

demonstration, how is it that, within that population, you pick out 

a variety of approaches and then treat each of those as something 

that you can hold up to CMS standards but then hold back to CMS 

for approval? 

Ms. LINDEBLAD. And just let me clarify that too. We do not think 

that we will have more than 50 percent of our duals population actually enrolled in one of the programs. So, with this first initiative 

that we are starting in April of 2013, we hope up to 30,000 individuals will enroll in that out of 115,000; and then with the second, 

probably, again, at most maybe 20,000 additional. So we are not 

looking at even more than half the population of the dual-eligibles 

being enrolled. We are going to be taking a very targeted approach. 

34 

Senator ROCKEFELLER. Okay. In my final few seconds, could you 

help me understand how you pick out an approach for this group 

and a different approach for that group in a demonstration as a 

way of finding how to make the dual-eligible coordination work 

best? How do you do that? I mean, 20,000 is a lot of people; 600,000 

is a lot of people. 

Ms. LINDEBLAD. Well, again, in Washington, what we are doing 

is looking at two different models, as I mentioned, and so looking 

at one that is—— 

Senator ROCKEFELLER. Models that you have come up with 

yourself? 

Ms. LINDEBLAD. That we have developed, right. One is more of 

a fee-for-service health home model; the other model will be 

through fully integrated managed care. So we have something to 

compare and look to. 

Mr. BETLACH. In Arizona, we are also developing different models based upon the population, so we will have a different model 

for individuals who are at risk of institutionalization who require 

home- and community-based services and long-term care support 

services. We will have a different approach in terms of the model 

of how we want to deal with members who have serious mental illness in terms of how we want to approach that population. So we 

are obviously looking at the fact that this is not a homogeneous 

group of individuals, and we need to target the development of our 

delivery system based upon the needs of that population. 

Senator ROCKEFELLER. And my final interruption. How are you 

made aware of and how do you use, if they have been sent to you, 

the standards that CMS insists on? 

Mr. BETLACH. Well, in terms of Arizona, we have not gotten to 

the level of specificity for the memorandum of understanding to see 

how that fits within our overall structure. But in terms of having 

some preliminary conversations, they understand the model and 

approach that we want to use with the different populations that 

we are serving. 

Senator ROCKEFELLER. So a verbal back-and-forth. 

Mr. BETLACH. So far. We just had the initial conversations 

around the MOU. I mean, we are a 2014 State. We are not as far 

along as Washington and Ohio. 

Mr. MCCARTHY. In Ohio, we have been working with them on all 

of the measurements going back and forth, and they proposed some 

measurements. We actually proposed more than they had given to 

us. And we have been working very collaboratively between the two 

to set up what is it we are going to be measuring along the way 

for health outcomes, nursing home diversion, and other areas. 

Right now it is over 40 measures that we are going to be measuring as we move through the program. 

Senator ROCKEFELLER. Okay. My time is way more than up. Senator Cantwell? 

Senator CANTWELL. Thank you, Mr. Chairman, and thank you 

for your line of questioning. I know you really are trying to be a 

guardian for the less fortunate here, and I think one of my most 

memorable Senate moments will be, you know, your 3 a.m. speech 

before the health care committee on the passing of that legislation 

about exactly how these policies do affect individuals. So I take 

35 

your line of questioning as welcoming, because I think we certainly 

understand the challenge. And there are challenges. I mean, Washington would be the first to admit it. 

Ms. Lindeblad, when we talk about communication to this population, we get that it is a challenge, right? 

Ms. LINDEBLAD. It is. 

Senator CANTWELL. I mean, are we talking about 72 different 

languages in our State? Or is it more than 72? 

Ms. LINDEBLAD. It is something like that, and what we do is, we 

will be targeting the top 10 or 12 where most of the population is 

and then bring in interpreters as needed for other languages, but 

making sure that all materials are translated into the top languages, and then assisting folks if it is a very unusual or rare language, absolutely. 

Senator CANTWELL. But when we say communication, we get 

that this is—it is huge for us. 

Ms. LINDEBLAD. It is. 

Senator CANTWELL. It is. As I said, we are the most diverse zip 

code in the entire country, and some of these school districts have 

already struggled with it when it comes to the delivery system. But 

isn’t the point here that right now, for the Medicaid population, 

they are not being managed in the sense of you basically get, as 

you were saying, a medical home or a caregiver to take a Medicaid 

enrollee who could be a youth who is, you know, on SSI and not 

doing a very good job of managing their own care? I guarantee you 

they are probably not. And all of a sudden, now they have an advocate. Is that—— 

Ms. LINDEBLAD. That is absolutely true. And, when you think 

about the diversity of the population, not just in language but in 

a variety of other ways in terms of what their health care needs 

are in the system, you are right, now they will have an advocate, 

someone who can help them navigate through often a very complicated, difficult system. 

Senator CANTWELL. So I would say that, currently, they are 

being bumbled around. They do not have anybody. They are knocking their heads against the wall many times on this. 

Mr. Betlach, you mentioned that Arizona saved $300 million in 

your switch to community-based care, going from 40 percent of 

your community-based care to 73 percent. 

Mr. BETLACH. For the elderly and physically disabled, that is correct, Senator. 

Senator CANTWELL. Which is great. You know, we wish all States 

would move toward that rebalancing. But you were mentioning 

that to think that Medicare alone could be the sole answer for 

these dual-eligibles, you basically think that is wrong, because 

there is no way, dealing with this Medicaid population, particularly 

as it relates to community-based care—— 

Mr. BETLACH. It is not a Medicare skill set in terms of, it is 

something that the States have developed through their Medicaid 

programs for home- and community-based placement and support. 

Behavioral health is similar, where especially members with serious mental illness, that is more a Medicaid skill set in terms of 

knowing what is needed for community supports, and also providing an array of other services for individuals. 

36 

Senator CANTWELL. Thank you. 

So I think, Mr. Chairman, that these questions are the right 

questions. You are right: some States are further ahead, but I 

think we should ask them about how to guarantee those safeguards. But I think this is one of our biggest challenges, but also 

biggest opportunities to deliver better care and to be more costeffective in how we deliver it. So I hope that we will build in whatever safeguards we need to build in, and I think you are right: 

build them in. But even in our rebalancing proposal that was part 

of the health care law, I think now, what are we, up to like 8 or 

9 States that have now said, okay, we want to try to do rebalancing, and some of them I never would have predicted. So the 

good news is that we have models that we can follow, and we can 

keep pushing the envelope in various stages here. So I thank the 

chair. 

The CHAIRMAN. Thank you, Senator. 

Senator Carper, I understand you have another question. 

Senator CARPER. I do. And has the vote started? I think the vote 

may have started. 

The CHAIRMAN. It has started. 

Senator CARPER. Okay. First of all, Mr. McCarthy, where do you 

live? 

Mr. MCCARTHY. I live in Dublin, OH. 

Senator CARPER. Okay. Are there any Ohio State fans around 

there? 

Mr. MCCARTHY. I am surrounded by them. [Laughter.] 

Senator CARPER. Do they have any idea you are from Indiana undergraduate and graduate school? 

Mr. MCCARTHY. Yes, they know that, and I have had numerous 

discussions with the Governor about that. [Laughter.] The State of 

Indiana has three number-one college teams as of today. 

Senator CARPER. That is great. All right. I will not get into why 

Montana—we are 1–AA in Delaware, and we lose to teams like 

Eastern Washington University, which I never heard of until 2 

years ago. And I am not sure—this is a team that plays on a red 

football field, and they managed to win a national championship. 

I do not get it. They beat Montana; they beat us. It is not fair. 

Okay. Let me talk about greater—first of all, thanks a lot for 

being here, and thank you for being some of the laboratories for democracy. As an old Buckeye myself, we are delighted that you are 

here. 

Greater care coordination and care managers, or at least patient 

navigators, are important folks, as we know, in the patientcentered medical homes and Accountable Care Organizations. And 

let me just ask how you are working in your own States to integrate your innovative programs for duals with medical homes and 

with the Accountable Care Organizations. Can you all take a shot 

at that? 

Mr. MCCARTHY. Sure. In Ohio, we took the path of going down 

the road of patient-centered medical homes for individuals with severe and persistent mental illness first because, actually, what we 

were concerned about as we were bringing up medical homes for 

people with chronic conditions, what we saw was individuals’ practices were looking at how to get the behavioral health providers 

37 

into the acute-care providers’ offices to provide services. But, as we 

know, looking through our data, that is not where a person with 

behavioral health issues goes for services, because, when you look 

at it, if a person has serious and persistent mental illness and a 

chronic condition, they are not getting the services. 

So what we did in Ohio is, we brought up behavioral health 

health homes first, where the behavioral health providers are actually out front and they are bringing the acute-care providers into 

their offices. We have incorporated that model into our proposal 

that we have put forward, because we know many of the individuals whom we are going to be serving—I know we have talked 

about the elderly, but many of them have behavioral health issues. 

And so that is an integral part of our project. 

Senator CARPER. Okay, good. Please? 

Ms. LINDEBLAD. And certainly for Washington, our first model is 

absolutely predicated on the use of health homes, medical homes, 

and we have experience in some pilots that we have done over the 

last few years, both on the behavioral health side and on disabled, 

under-65 disabled, where we have had great successes using a 

health home model in terms of not only bending the cost curve, but 

I think, interestingly enough, finding statistically significant differences in the mortality of the individuals whom we served in 

those programs. 

Mr. BETLACH. It is a must in Arizona as well. You know, we—— 

Senator CARPER. Sorry. State that again? 

Mr. BETLACH. It is a must in Arizona as well. We mandate it 

from our health plans in terms of the structure to work with, not 

only a primary care physician, but also to be a critical tool in terms 

of providing information back to those providers. So the managed 

care system is really doing the most in terms of leveraging care coordination and care management, particularly for the populations 

like the high-cost behavioral health population as well as specifically the long-term care population. So it is a must in terms of our 

structure and our delivery system. 

Senator CARPER. Okay. Thanks. 

How do you all plan to ensure that your demonstration programs 

will include the most high-risk and high-cost duals in your States? 

That is my first question. 

The second half of that would be: would it be beneficial to your 

respective programs to have the option of including coordinated 

care models such as the PACE programs for your duals? 

Mr. BETLACH. Well, in Arizona, we leverage managed care, so we 

do not have the PACE model in Arizona. And just to give a comparison, I think the PACE numbers nationally are about 25,000 

members. In Arizona, we have 40,000 alone who are aligned in 

terms of getting both their Medicare and their Medicaid from the 

Medicaid plan. So, just to give you some idea of the scope of that. 

And, obviously, by having that alignment, the plans have all the 

data on who their high-cost members are. Because you have that 

information, you can see who is using the emergency department 

too much; you can see who has. And it was in my data in terms 

of where you can stem the readmissions in the hospital. 

So we all talked about fragmentation, and clearly, by having that 

single point of accountability, you really then can leverage the 

38 

managed care organization to drive better outcomes for the member. 

Senator CARPER. All right. 

Ms. LINDEBLAD. And I think in Washington, when I talked about 

the PRISM system, that is a predictive—— 

Senator CARPER. About the prison system? 

Ms. LINDEBLAD. PRISM system. 

Senator CARPER. Okay. 

Ms. LINDEBLAD. Not prison. PRISM. [Laughter.] 

The PRISM system. That is actually a tool, a predictive modeling 

tool, that we have developed in Washington that will help us 

focus—and we actually will be managing those highest-cost individuals or those individuals whom we are predicting will be 50-percent 

higher cost using this model. And we have used this model for a 

number of years in various settings, and the care management 

strategy is predicated on identifying individuals, so absolutely, they 

will be the highest-cost, highest-need individuals to be served in 

our program. 

Senator CARPER. Okay. Last word, Mr. McCarthy? 

Mr. MCCARTHY. And in Ohio, we actually left the PACE program 

outside of our proposal because, as Senator Rockefeller was talking 

about, it gives a person—you can opt out of our duals proposal into 

the PACE program, and so it is another way to do an evaluation 

of what is going on. We have two PACE programs in Ohio currently, one in the Cleveland area and one in the Cincinnati area. 

Senator CARPER. Okay, thanks. 

Mr. Chairman, this was great. Thanks. 

The CHAIRMAN. It was a very good hearing, and I thank all of 

you so much. You traveled distances and suffered inconvenience to 

get here, even temporarily no lights, but thank you very much for 

your participation. And I thank the Senators too. There are about 

4 minutes left on the vote. 

The hearing is adjourned. Thank you. 

[Whereupon, at 12:12 p.m., the committee was adjourned.] 

(39) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD


85983001.eps
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85983.002

The non-partisan Congressional Budget Office tells us that 40 percent of the long term growth in federal 

health care programs is due to the growth in health care costs. But 60 percent can be linked to the 

aging of population. In fact, 10,000 Americans will turn 65 each day over the next two decades. 

We cannot stop the aging of America, but we can work to lower health care costs. 

Streamlining Medicare and Medicaid so they work better together will pay dividends. It will improve the 

health of vulnerable Americans, and increasing efficiency will also save the federal government money. 

How are we going to increase efficiency? First, we need to rework our payment models so providers, 

states and the federal government have incentives to work towards the same goal. We need to remove 

incentives for providers to game the system. Everyone should be rewarded for lower costs as well as 

held accountable for poor or unnecessary care. 

Second, we need to coordinate care so that doctors, hospitals and other providers are working together 

as a team. Dually-eligible folks often have multiple chronic diseases, requiring multiple doctors. If 

providers don't communicate, they can deliver unnecessary care. This leads to increased costs and can 

harm patients. 

Third, we need to get rid of conflicting rules and cut red tape in the areas where Medicare and Medicaid 

interact. For instance, when a dual needs a wheelchair, Medicare and Medicaid have two very different 

rules. These rules are complicated and at times delay needed care. 

Accomplishing these goals will go a long way in improving care and saving money. 

Our witnesses are here today to discuss efforts to streamline these two programs. last year, Melanie 

Bella, the director of the office at CMS responsible for dually-eligible beneficiaries, testified before the 

Finance Committee. She outlined CMS's plans for a demonstration project where states would test new 

ways to provide health care to duals. 

Today, the Committee looks forward to an update on these efforts from Director Bella and three states 

participating in the demonstration project: Washington, Arizona and Ohio. As these demonstrations 

move forward, we need to keep in mind three key principles. 

One, the focus can't be on cost cutting alone. We must focus on streamlining Medicare and Medicaid in 

a smart way to improve how care is delivered. If we do this right, duals will be healthier and the 

programs will save money. 

Two, we must maintain or strengthen the protections beneficiaries enjoy today. Let me repeat that: We 

must maintain or strengthen the protections beneficiaries enjoy today. 

Three, we need to rigorously evaluate the projects to learn what worked and what didn't. 

So let us focus on these principles. let us streamline these programs and improve care for these 

vulnerable Americans. And as President Truman advised, if we act with determination, these difficulties 

will only be challenges to solve. 

### 
41 


85983.003

STATEMENT 
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85983.004

U.S. Senate Committee on Finance 

"Improving Care/or Dually-Eligible Beneficiaries: A Progress Update" 

December 13, 2012 

Chairman Baucus, Ranking Member Hatch, and Members of the Committee, thank you for the 

invitation to continue our discussion about the Center for Medicare & Medicaid Services' (CMS) 

efforts to improve and integrate care for individuals who are enrolled in both the Medicare and 

Medicaid programs (Medicare-Medicaid enrollees), commonly referred to as "dual eligibles." I 

appreciate your ongoing interest in the work of the CMS Medicare-Medicaid Coordination 

Office to provide high quality, coordinated care for Medicare-Medicaid enrollees. 

I am pleased to report that CMS continues to make progress in our efforts to create a more 

streamlined system that delivers appropriate, quality, cost-effective care. The MedicareMedicaid Coordination Office has been working on a variety of initiatives to meet its mandate 

and to further partner with States and other stakeholders to improve access, coordination, and 

cost of care for Medicare-Medicaid enrollees. Since I last appeared before this Committee on 

September 21, 2011, CMS has announced agreements with States to test new models to better 

align the Medicare and Medicaid programs and undertaken numerous initiatives to further its 

work to improve care coordination and quality of care for Medicare-Medicaid enrollees, 

including providing new tools to gain a better understanding of the population, increasing access 

to Medicare data, and partnering with organizations to reduce avoidable hospitalizations. 

Background 

The Medicare and Medicaid programs were originally established in 1965 as separate programs 

with different purposes. Medicare provides health insurance for qualified individuals over the 

age 65 and people with disabilities. Medicaid provides coverage for low-income families 

including children, pregnant women, parents, seniors and people with disabilities. While 

Medicare and Medicaid are separate programs, a growing number of people depend on both 

programs for their care, creating a greater need for both programs to work together. Today, more 
43 


85983.005

than 9 million Americans' are enrolled in both the Medicare and Medicaid programs; nearly twothirds are low-income elderly and one-third are people who are under age 65 with disabilities. In 

many cases, they are among the poorest and sickest people covered by either program. 2 

Currently, the majority of Medicare-Medicaid enrollees must navigate three sets of rules and 

coverage requirements (Original Medicare, a Medicare Prescription Drug Plan, and Medicaid) 

and manage multiple identification cards, benefits, and plans. As a result of this lack of 

coordination, care often is fragmented or episodic, resulting in poor health outcomes for a 

population with complex needs. It also leads to misaligned incentives for payers and providers, 

resulting in cost-shifting, unnecessary spending and an inefficient system of care. 

Through the leadership of this Committee, the Medicare-Medicaid Coordination Office was 

established by Congress, in section 2602 of the Affordable Care Act, to integrate more 

effectively the Medicare and Medicaid benefits and improve the coordination between the 

Federal and State governments for individuals enrolled in both Medicare and Medicaid. 

A major focus of our work is to improve beneficiaries' experience with both the Medicare and 

Medicaid programs. To that end, CMS continually engages with many national and local 

advocacy organizations to incorporate their input and the beneficiary perspective in its work. In 

addition to meeting with these organizations on a regular basis, CMS partnered with California, 

New Mexico, New York, Oregon, Pennsylvania, and Wisconsin to conduct beneficiary focus 

groups to assess and increase understanding of the beneficiary experience and needs in both 

programs. As we work to better coordinate services and improve beneficiary health outcomes, 

CMS will continue to work with these organizations and other stakeholders to ensure the 

beneficiary perspective is always informing every aspect of our work. 

Financial Alignment Initiative 

In July 2011, CMS launched the Financial Alignment Initiative to more effectively integrate the 

Medicare and Medicaid programs to improve the quality and costs of care, as well as the overall 

1 Ba.c;cd on the Centers for Medicare & Medicaid Services"(CMS) Enrollment Database, Provider Enrollment. Economic and 

Attributes Report. provided by eMS Office for Research, Development and Information, July 2010. 

2 Kaiser Family Foundation, Medicaid's Role for Low-Income Medicare Beneficiaries, May 2011 Report available at 

hUp://www.ktlorgimedicaidJupload/4091-08.Jldf[hcrcinafter Kaiser, Medicaid's Role May 2011 Report]; Kaiser Family 

Foundation. 
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beneficiary experience. Through this Initiative, CMS offers States the opportunity to test two 

models to align payment and service delivery between the Medicare and Medicaid programs 

while preserving or enhancing the quality of care furnished to Medicare-Medicaid enrollees. The 

first is a capitated model in which a State, CMS, and health plan or other qualified entity will 

enter into a three-way contract through which the health plan or other qualified entity will 

receive a prospective blended payment to provide comprehensive, coordinated care. The second 

is a managed fee-for-service model under which a State and CMS will enter into an agreement 

by which the State would invest in care coordination and be eligible to benefit from savings 

resulting from such initiatives that improve quality and costs. Both models are designed to help 

beneficiaries by improving health care delivery, encouraging high-quality, efficient care and 

better stream lining services and achieving State and Federal health care savings. 

All approved Demonstrations will include critical beneficiary protections that will ensure highquality care is delivered. In addition, for the prescription drug benefit, approved Demonstrations 

. will be required to meet all Medicare Part D requirements regarding beneficiary protections, 

protected classes, and network adequacy. No participating States will be permitted to alter 

Demonstration standards in a manner that is less beneficiary-friendly or reduces access. 

CMS recognizes the diversity of States in serving the Medicare-Medicaid enrollee population, 

and the Demonstrations afford an opportunity to test better coordination of services in a 

multitude of settings. Since the Committee's previous hearing on this issue, CMS has announced 

agreements with the first States to test models to improve health care for Medicare-Medicaid 

enrollees. CMS is partnering with Massachusetts3 to provide care under the capitated model and 

with the State of Washington4 under the managed-fee-for-service payment model. CMS 

continues to work with 23 other States5 that have submitted proposals. 

3 http://v,;ww.cms.go\,/Medicarc-Medicaid-Coordination!Mcdicare-and-Medicaid-Coordination/Medicare-MedicaidC oordination-OfTicc.'DownloadsfMassMOt j .pdf 

4 http://\v\v\\,.cms.gov/Medicarc-Jlvledicaid-Coordinatlon/Mcdicare-and-Mcdicaid-CoordinationiMedicare-MedicaidCoordination-OfficeiDownloads/WAMFFSMOlI,Ddf 

5 At the time this testimony was submitted. both Washington and Massachusetts have approved Demonstration agreements. 

eMS continues to work with the follo\.ving States on their coordinated care approaches: Arizona, California, Colorado, 

Connecticut, Hawaii, Idaho, Illinois, Iowa, Michigan, Minnesota., Missouri, New York, North Carolina., Ohio, Oklahoma, 

Oregon, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, and Wisconsin. 
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To support these Demonstrations, on August 23, 2012,6 CMS announced a new funding 

opportunity for participating States to provide support through Aging and Disability Resource 

Centers (ADRC) and State Health Insurance Assistance Program (SHIP) infrastructure for direct 

person-centered counseling and State information-sharing over a three-year period. This 

opportunity is being jointly coordinated by CMS and the Administration for Community Living. 

Massachusetts - Capitated Medicare-Medicaid Demonstration 

On August 23, 2012, Secretary Sebelius announced that Massachusetts is the first State to partner 

with CMS in this Demonstration to test the capitated model and provide Medicare-Medicaid 

enrollees with a more coordinated, person-centered care experience. Massachusetts and CMS 

will contract with Integrated Care Organizations (lCOs) to oversee and be accountable for the 

delivery of Medicare, Medicaid, and expanded services, such as dental care, vision and durable 

medical equipment, as well as behavioral health services and community supports, for 

participating Medicare-Medicaid enrollees aged 21 to 64. The new program is scheduled to 

launch in 2013, and will help provide 110,000 Medicare-Medicaid enrollees with access to these 

expanded services. In addition, all ICOs will include Medicare-Medicaid enrollee participation 

in their governance structure. 

Medicare-Medicaid enrollees participating in the new demonstration will have the ability to 

shape and direct their care through a person-centered model built around their needs and 

preferences. Care will be delivered through teams that include a primary care provider, care 

coordinator, independent long-term services and supports coordinator, and other care providers 

at the discretion of each beneficiary. The beneficiary and hislher team will develop, implement 

and maintain individualized care plans. Medicare-Medicaid enrollees will have access to the 

new and enhanced services previously described to promote alternatives to long-term 

institutional services. 

Washington State - Managed FFS Medicare-Medicaid Demonstration 

On October 25,2012, CMS announced that the State of Washington would become the first State 

partner to test the Managed FFS Demonstration model, building on its planned Medicaid Health 
46 


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homes to provide better coordinated care and enhanced services for Medicare-Medicaid enrollees 

with chronic health conditions or a serious and persistent mental health condition. More than 

20,000 Medicare-Medicaid enrollees in Washington will be eligible to receive improved care 

through integrated service delivery across primary, acute, prescription drugs, behavioral health 

and long-term services and supports. Washington will be eligible to receive a performance 

payment depending on its performance on beneficiary experience, quality and savings criteria. 

Leveraging its innovative predictive risk model, 7 Washington will be able to identifY MedicareMedicaid enrollees' health care needs and target those with chronic conditions or serious and 

persistent mental health conditions. Medicare-Medicaid enrollees will be able to shape and 

direct their care with access to a care coordinator, working with a multidisciplinary care team, 

who is responsible for their overall care coordination and comprehensive care management. 

Enrollees will be free to choose whether to receive these new services, and will continue to have 

access to the same Medicare and Medicaid benefits. 

Open and Transparent Development of Proposals for the Financial Alignment Initiative 

eMS is fully committed to an open and transparent process for these Demonstrations. As a 

result, a robust public engagement process was required as part of the demonstration proposal 

process. States held public forums, workgroups, focus groups, and other meetings to obtain 

public input on the development of their demonstration proposal. Each State was required to 

publicly post a draft Demonstration proposal for a 30-day public comment period prior to 

submitting a proposal to eMS. After this 30-day period, States worked to address and 

incorporate public feedback in proposals before officially submitting their proposal to eMS. 

Once a State formally submitted its proposal to eMS, eMS then posted the proposal to the eMS 

website for a subsequent 30-day public comment period in order to solicit stakeholder feedback. 

eMS continues to accept and discuss public comments on the development of these 

Demonstrations proposals. All Memoranda of Understanding and Final Demonstration 

Agreements will be made public and eMS will continue to engage with the public on this work. 8 

'Washington's modeling system is calledPredictive Risk Intelligence System (PRISM). More information is available here: 

http://v\'\\"w.aging\\ashin2t()n.orQjdocs/strategic~p!annin!:!;PRISM~Explained.pdf 

8 Massachusetts: https:!/\\"\\"\Y.cms.l!O\o/Medicare-Mcdicaid-Coordination/Mcdicarc-and-Mcdicaid-CoordinationlMedicareMedicaid-Coordination·()tliceiDo\\ nloads/MassMO U. pdf 
47 


85983.009

Evaluation o/the Demonstrations 

CMS is funding and managing the evaluation of each approved Demonstration. CMS has 

contracted with an external independent evaluator, RTI International, to measure, monitor, and 

evaluate the overall impact of the demonstrations, including impacts on Medicare-Medicaid 

enrollees, expenditures and service utilization. The evaluator will design unique, State-specific 

evaluation plans for each individual State participating in the Demonstration, as well as an 

aggregate analysis that will look at the Demonstration overall including Demonstration 

interventions and impact on key subpopulations within each State. The MOUs for Massachusetts 

and Washington provide examples of the types of areas that will be measured in all 

Demonstrations, including beneficiary experience of care, care coordination, care transitions, 

support of community living, access to services, and the caregiver experience, among many 

others. The evaluations in Washington and Massachusetts will also use comparison groups to 

identify and analyze the impact of the Demonstrations. 

In addition, in the capitated model, a CMS-State contract management team will ensure access, 

quality, program integrity, and financial solvency, including reviewing and acting on data and 

reports, conducting studies, and taking quick corrective action when necessary. CMS will apply 

Part D requirements regarding oversight, monitoring, and program integrity to Demonstration 

plans in the same way they are currently applied for Part D for sponsors. CMS is working with 

individual States to develop a fully integrated oversight process, using the process currently 

employed in the Medicare Advantage and Part D programs as a starting point. 

Initiative to Reduce Preventable Hospitalization among Nursing Facilitv Residents 

On March 15, 2012, the Medicare-Medicaid Coordination Office and the Center for Medicare 

and Medicaid Innovation announced the Initiative to Reduce Avoidable Hospitalizations Among 

Nursing Facility Residents. Through this initiative, CMS is partnering with seven organizations9 

Washington: htin:! /W\VW ,ems. 20v/Mcdicare~Med icaid-C oordinatiQn/Med icar.,!;-and-Mcdicaid¥(, oordination/rvkd ican>MedicaidCoordination-OfficclDownloadsiWAMFFSMOll.pdf 

9For a fuHlist of the selected participants in the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility 

Residents, please go to: http://www . innovations.cms.govT i !es/fact~shee1!rahnfr-factsheet. pdf 
48 


85983.010

to implement strategies to reduce avoidable hospitalizations for Medicare-Medicaid enrollees 

who are long-stay residents of nursing facilities. 

These avoidable hospitalizations can be disruptive, dangerous and costly. Research shows that 

nearly 45 percent of hospitalizations among Medicare-Medicaid enrollees in nursing facilities are 

potentially avoidable, meaning they could have been prevented with adequate monitoring and 

treatment in the nursing facility setting. 1

0 

The initiative directly supports eMS' ongoing work to reduce avoidable hospitalizations for 

Medicare-Medicaid enrollees. The goals of this initiative are to: 

• Reduce the number of and frequency of avoidable hospital admissions and readmissions; 

• Improve beneficiary health outcomes; 

• Provide better transition of care for beneficiaries between inpatient hospitals and nursing 

facilities; and 

• Promote better care at lower costs while preserving access to beneficiary care and 

providers. 

On September 27, 2012 eMS rumounced the seven selected organizations, including two 

universities, hospital networks, and other professional organizations, to participate in the 

program. The selected organizations are partnering with eMS to implement evidence-based 

interventions to accomplish these goals and will implement and operate proposed 

interventions over a 4-year period. In addition, each organization is required to partner with a 

minimum of 15 Medicare-Medicaid certified nursing facilities in the same State where the 

intervention will be implemented. Nursing facility participation is voluntary. 

The initiative did not prescribe a specific clinical model for these interventions. However, all 

interventions must: 

• Improve beneficiary safety by better coordinating management of prescription drugs 

• Bring onsite staff to collaborate and coordinate with existing providers, including 

residents' primary care providers and the staff of the nursing facility. 

IOWalsh. E .. Freiman. M .. Haber, S., Bragg. A.. Ouslander, J .. & Wiener, J. (2010). Cost Drivers for Dually 

EligibJe Beneficiaries: Potentially Avoidable Hospitalizations from Nursing Facility, Skilled Nursing Facility, 

and Home and Community Based Services Waiver Programs. Washington, DC: eMS, 
49 


85983.011

• Demonstrate a strong evidence base for the proposed intervention and potential for 

replication and sustainability in other communities and institutions across the country. 

• Supplement (rather than replace) existing care provided by nursing facility staft: 

• Allow for participation by nursing facility residents without any need for residents or 

their families to change providers or enroll in a health plan. Residents will be able to optout from participating, if they choose. 

As an example, one selected organization, Healthlnsight of Nevada, will use tools to assess 

beneficiaries' risk levels to assign each beneficiary the appropriate level of enhanced care and 

attention in order to reduce acute care transfers. It expects to implement an intervention in 25 

nursing facilities across the State. Another organization, the Alabama Quality Assurance 

Foundation, will implement an intervention in 23 facilities by supplementing the facilities' staff 

with registered nurses who will train staff on managing workplace demands and increasing 

awareness of residents' status and needs. Upon implementation, we estimate the awarded 

interventions will initially reach more than 17,000 beneficiaries over the four years of the 

initiative. As with the Financial Alignment Initiative, CMS has contracted with an external 

independent evaluator to measure and evaluate the overall impact of this demonstration on the 

quality of care received by Medicare-Medicaid beneficiaries and the costs to the two programs. 

Fostering a Better Understanding of Medicare-Medicaid Enrollees 

In the last year, CMS has undertaken numerous efforts to improve access to and the quality of 

data that exists to support better care for Medicare-Medicaid enrollees. A lack of such data has 

been a long-standing barrier to care coordination. 

New Tools to Support Better Research to Understand Medicare-Medicaid Enrollees 

The Chronic Condition Data Warehouse (CCW) is a research database designed to make 

Medicare, Medicaid, Assessment, and Part D Prescription Drug Event data readily available to 

support research designed to improve the quality of care and reduce costs and utilization. 

Traditionally, researchers and both Federal and State governments use the CCW to understand 

beneficiaries' utilization, demographics, spending and other key factors to support a more 

efficient delivery of services. 
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85983.012

This November, CMS made avrulable new diagnostic conditions flagsll (coding used to identify 

characteristics/demographics) to represent those conditions prevalent among Medicare-Medicrud 

enrollees. These diagnostic condition flags facilitate and streamline research on beneficiary 

conditions and allow for a more targeted use of resources. 

Historically, conditions focused on prevalent characteristics in the Medicare-only, over-65 

population. With the newly released condition 'flags, both State and Federal policymakers will 

be able to focus efforts on mental health conditions more prevalent among Medicare-Medicaid 

enrollees, as well as better understand the population with intellectual and developmental 

disabilities. For example, bipolar disorder and schizophrenia are newly added condition flags 

that can now be used to better understand this population and take into account the full 

beneficiary experience. 

Integrated Medicare-Medicaid Data Set 

In addition, CMS developed a new Medicare-Medicaid integrated data set. 12 This data set 

supports all States by providing preliminary tools to determine and understand new opportunities 

for care coordination, including information on eligibility, enrollment, beneficiary conditions, 

service use and expenditures for both the Medicare and Medicaid programs. The data set will 

better assist researchers, as well as Federal and State policymakers, to identify regions, 

populations or necessary interventions to improve the quality of care for Medicare-Medicaid 

enrollees. 

II These new condition flags are: I) Attention deficit, hyperactivity, and conduct disorders, 2) Anxiety disorders, 3) Bipolar 

disorder, 4) Type I major depression 'and Type 2 depressive disorders,S) Personality disorders, 6) Post-traumatic stress disorders, 

7) Schizophrenia 8) Schizophrenia and ollier psychotic disorders. and 9) Tobacco use disorders. http://w\\,w.ccwdata,orgfchronicconditionsfindex.htm#NewAigos 

"The Medicare-Medicaid Linked Enrollee Analytic Data Source (l\1MLEADS) http://www,ccwdata.oro/data. dictionarieslilldex.htm#linkedfiles. 
51 


85983.013

Medicare-Medicaid Enrollee State Profiles 

As part of these improved data efforts, eMS released Medicare-Medicaid EmoJlee State Profiles 

(State Profiles ).13 CMS hopes these State Profiles will help provide policymakers, researchers, 

and other interested parties with yet another opportunity to foster program improvement. The 

information released includes a national summary and overview of data methodology underlying 

the analysis, along with individual profiles for each of the 50 States and the District of Columbia. 

State-level profiles contain demographic characteristics, utilization and the spending patterns of 

the Medicare-Medicaid emollees and the State Medicaid programs. The national summary 

provides a composite sketch. of the popUlation including demographics, selected chronic 

conditions, service utilizations, expenditures and availability of integrated delivery programs. 

eMS expects to update the State Profiles annually and continually engage with States and other 

key stakeholders to improve the data to better inform policy. 

Medicare Data to States to Support Care Coordination 

State access to Medicare data facilitates more informed policy and program decisions for 

Medicare-Medicaid enrollees. 

To that end, eMS established a process for States to access Medicare data to support care 

coordination, while also protecting beneficiary privacy and confidentiality by assuring 

compliance with the Privacy Act and Health Insurance Portability and Accountability Act. 14 To 

date, 28 States have received or are in the process of actively seeking Medicare Parts A and B 

data, 15 and 24 States are in the same position regarding Medicare Part D data. 16 Other States 

continue to request access and are working with eMS to receive data use agreements. 

13 http://\\'\\'w.cms.govlMedicare-Medicaid-CoordinationlMedicare~andkMedicaid~Coordinatjon/Medicare-MedicaidCoordination-Officc/StateProfiles.html 

\4 http://www.cms.gQvJMedjcare~Medicajd~Coordination/Medicar-e-an d-Medicaid-CoordinationiMcdicare-\.1edicaidCoordination-OfficeIMedicareDataforStates.html 

15 As of November 20.2012. these States are Arkansas, California. Colorado, Conneeticu~ Indiana. Illinois, Iowa. Kansas, 

Louisiana. Massachusetts, Maine, Michigan, Minnesota, Missouri, North Carolina. New York, Ohio, Oklahoma. Oregon, 

Pennsylvania. Rhode Island, South Carolina. Tennessee, Texas, Virginia. Vermont. Washington. and Wisconsin. 

" As of November 20,2012, these States are Arizona. California. Connecticut, Massachusetts, Maine. Michigan, Missouri, North 

Carolina. New York, Ohio. Oklahoma. Oregon, Pennsylvania. Rhode Island. Tennessee, Texas, Virginia. Vennont. Washington, 

and Wisconsin. 
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85983.014

Supplementing this work, this month, CMS has made available the State Data Resource 

Center (SDRC) to provide more tools to support data use. This Center furthers work from the 

Integrated Care Resource Center (ICRC), and expands resources and efforts to guide States in 

their use of the Medicare data. The SDRC is open to all States and will further support States in 

their development of coordinated care initiatives. 

The Integrated Care Resource Center 

Through the ICRC, CMS is supporting States in developing integrated care programs and 

promoting best practices for serving Medicare-Medicaid enrollees and other beneficiaries with 

chronic conditions. This center provides technical assistance to all States, including those that 

are implementing or improving programs for Medicare-Medicaid enrollees using existing 

statutory vehicles in Medicaid and Medicare, as well as those planning new demonstration 

programs under new authority. States are able to contact the center with questions and support 

needs; the center then works with the States to answer questions, provides technical assistance, 

and works with CMS to meet States' needs. To date, the ICRC has worked with nearly twothirds of the States to implement best practices for Medicare-Medicaid enrollees, navigate use of 

new Medicare data, and support development of Medicaid health homes. 17 

Conclusion 

The Medicare-Medicaid Coordination Otlice has been diligently working to improve the 

beneficiary experience with the Medicare and Medicaid programs as well as the partnership with 

States and other stakeholders to improve the quality, coordination, and cost-effectiveness of care 

for this vulnerable population. These initiatives have been designed to enhance care 

coordination and advance person-centered care programs, focus on increased access to needed 

beneficiary services, promote keeping individuals in their homes and community, support a 

much needed focus on improving the quality of care received by beneficiaries, and achieve 

health care savings for both States and the Federal government through better care management. 

While exploring new models through Demonstrations is a part of this effort, CMS is also 

working to improve and enhance existing care programs that serve this population. A major part 

17 http://www.integratcdcareresourcecenter.com/ 
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of this effort is supporting and developing a better understanding of the Medicare-Medicaid 

eurollee population and the current programs that serve them. In doing so, CMS seeks to 

improve care for Medicare-Medicaid eurollees by providing Congress, States', and other 

policymakers with more robust information about the beneficiary experience, quality, and 

spending. We are committed to continuing to work with Congress, States, advocates, and other 

key stakeholders in furtherance of this needed work. 

I want to thank the Committee for its continued interest in improving care for MedicareMedicaid eurollees. With your support, we will keep working to partner with States and other 

stakeholders to advance high quality, coordinated care for these individuals. 
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85983.016

United States Senate Committee on Finance 

Public Hearing 

"Improving Care for Dually-Eligible Beneficiaries: A Progress Update" 

December 13, 2012 

Questions Submitted for the Record for Melanie Bella 

Senator Max Baucus 

Scope of Demonstrations 

Duals are a highly vulnerable group with complex medical needs and high costs. 

Stakeholders are concerned the demonstration is too large. Most states have 

proposed to enroll all or the majority of their duals in the demonstrations. If all of 

these state proposals are approved, approximately three million of the nine million 

duals will be enrolled in the demonstration, but CMS is aiming to limit enrollment 

to two million duals. 

Many of the states that originally submitted demonstration proposals to your office 

planned to enroll all or most of the duals in their state in the project. This raises 

concerns that the demonstrations are too large to really be demonstrations. 

1. How many states will start their demonstrations in 2013? How many duals 

will be included in the demonstration? 

Answer: CMS and States are proceeding at a measured pace for each State, and 

implementing safeguards that will ensure the demonstrations protect and enhance 

beneficiaries' access to high quality care. To date, CMS has approved demonstrations in 

three States, including capitated models in Massachusetts and Ohio and the managed feefor-service model in Washington. The earliest enrollment for any capitated 

Demonstration model is expected in July of2013 in Massachusetts. 

The actual number of states with demonstrations that would begin serving beneficiaries in 

2013, and the total eligible populations within those States, is dependent on CMS review 

and approval of Demonstration proposals. 

In addition to the three States that have already been approved for a Demonstration, there 

are 20 States with Demonstration proposals before CMS for review. Two of these States 

are primarily interested in testing better alignment for beneficiaries in capitated programs, 

but without pursuing any increases in enrollment relative to existing programs in those 

States. Of the remaining 18 States, three (CA, IL, WI) are pursuing eapitated 

demonstrations in 2013 and six (NC, NY, CO, MO, OK, CT) are seeking to implement 

the managed fee-for-service models in 2013. 
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In our experience to date, the start dates for each Demonstration have moved later than 

originally proposed to be responsive to public feedback and allow sufficient time for 

preparation, outreach, and education. 

2. How many states will start their demonstrations in 2014? How many duals 

will be included in the demonstration? 

Answer: Following from our discussion above, 10 states are proposing to start a 

Demonstration in 2014. In addition, Washington and New York are pursuing both a 

capitated and managed fee-for-service model, and will be pursuing the capitated model in 

2014 and managed fee-for-service model in 2013. As above, the actual number of states 

that move forward is subject to CMS review and approval. CMS has committed to a cap 

of2 million beneficiaries in the Demonstrations. We believe this is a reasonable limit to 

balance concerns with size and the ability to test models across the nation in different 

delivery systems, States, and target populations. 

3. How can we ensure that the demonstrations are truly testing different models 

and not creating a whole new way of doing business? 

Answer: To better serve people who are dually eligible for Medicare and Medicaid, we 

need to develop and test delivery system changes that improve the quality and 

coordination of care. The Demonstrations recognize the diversity across the States in 

serving the Medicare-Medicaid enrollee population, and afford an opportunity to test 

better coordination of services in a multitude of settings. The Demonstrations have been 

established to test different models, consistent with the parameters and conditions set 

forth in the Affordable Care Act and incorporate the strongest aspects from both 

Medicare and Medicaid to best meet the needs of Medicare-Medicaid enrollees, their 

caregivers, and providers. To that end, each Demonstration Memorandum of 

Understanding (MOU) sets clear end dates and procedures for termination or phase-out, 

should the demonstration fall short of stated objectives. Additionally, CMS has 

established a rapid-cycle evaluation process for all Demonstrations and has contracted 

with an independent evaluator to measure, monitor, and evaluate the overall impact of the 

demonstrations. 

Savings from Managed Care 

Most of the states that submitted proposals to participate in the demonstration will 

rely on managed care plans to coordinate care for duals. Under a managed care 

arrangement, Medicaid and Medicare would pay managed care plans one combined 

payment each month to provide medical services to duals. The managed care plan 

is responsible for negotiating with and paying the individual providers in its 

network. There is uncertainty as to whether savings to the federal and state 

governments will be achieved by this approach. If savings are achieved, therc is 

further uncertainty if these savings will be a result of actual care coordination and 

greater efficiency or if managed care plans would simply cut provider payments. 

Savings from greater coordination and efficiency is the goal, but it's unclear how we 

will know the source of the savings. 
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85983.018

4. When evaluating demonstrations that use managed care, can you be certain 

savings will be achieved through increased efficiency and care coordination 

rather than simple cuts to provider payments? 

Answer: Improving the quality of care for beneficiaries is the highest priority of these 

demonstrations. Demonstrations are designed to improve the quality of care while 

maintaining access to benefits and ensuring robust provider networks. Demonstration 

plans will undergo a rigorous review to determine provider networks are sufficient to the 

needs of Medicare-Medicaid enrollees using the strongest of either Medicare or Mcdicaid 

standards; we believe such robust networks will only be achievable with payment of 

adequate provider rates. 

CMS' monitoring and evaluation efforts will be able to assess the effects of the integrated 

financing and delivery model versus rate changes through multiple mechanisms: 

• CMS will collect encounter data from the plans to assess changes in utilization 

patterns over time. 

• Our evaluator will conduct key informant interviews with State staff and 

stakeholders, site visits to health plans, and case studies to further understand the 

interventions in each Demonstration, including gains made through efficiencies 

and care coordination. 

Auto Enrollment/Opt-out 

Almost all of the states participating in the demonstration proposed to auto-enroll 

dually-eligible beneficiaries into managed care plans, with an option for 

beneficiaries to then opt-out of the managed care plan if they choose. This means 

dually-eligible beneficiaries are identified and then randomly assigned to a managed 

care plan. After this enrollment occurs, beneficiaries would have a limited time 

period to dis-enroll from the assigned plan. Beneficiary advocates and some 

Democrats are very concerned this policy tramples on beneficiaries' rights and 

protections. They argue that duals' access to their doctors will be limited and 

confusion among duals will occur. Staff believes these concerns may be legitimate, 

but testing auto-enrollment/opt-out to determine its effectiveness is warranted 

through this demo. 

5. How will the auto-enrollment work from a beneficiary's perspective? 

Answer: Beneficiaries in States pursuing the capitated model will be notified at least 60 

days prior to potential enrollment to select a new integrated health plan under the 

Demonstration and of their ability to choose not to participate. Beneficiaries who do not 

make an active choice will be enrolled in a health plan .. Medicare-Medicaid enrollees 

will retain the same rights they have under Medicare Part D and Medicare Advantage 

programs to disenroll at any time from the Demonstration and exercise their choice to 

enroll in original Medicare with a Prescription Drug Plan or a Medicare Advantage plan 

not participating in the Demonstration. 
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6. What protections are you putting into place to ensure duals' rights are not 

trampled? 

Answer: The Demonstrations will incorporate the most robust beneficiary protections 

from Medicare and Medicaid and will integrate and enhance the current protections to 

create a more accessible, seamless system of care for Medicare-Medicaid enrollees. 

Continuity of care provisions will ensure beneficiaries have access to their existing 

doctors and other providers for a specified period of time while they transition into 

demonstration plans, and Demonstration enrollees will retain all Medicare Part D 

beneficiary protections. 

In addition, beneiiciaries will receive clear, understandable notices that have been 

reviewed by advocacy organizations and field tested with beneficiaries. Outreach and 

education will proceed through multiple channels at multiple points in time and will take 

into account the prevalence of cognitive impairments and mental illness in this population 

as well as the incidence oflimited English proficiency. Independent resources, such as 

choice counselors and enrollment brokers, will assist beneficiaries in making enrollment 

choices. We will also leverage existing resources, such as State Health Insurance 

Programs and Aging and Disability Resource Centers, to provide one-on-one counseling 

on enrollment options. Special training for 1-800-Medicare operators will enable them to 

effectively assist beneficiaries. 

Evaluation Process 

A major goal of the demonstration projects is to evaluate what works and what 

doesn't work when caring for duals. CMS has stated that every demonstration 

program will be evaluated on the program's ability to improve quality and reduce 

costs. An important part of analyzing a program's success is comparing two 

similarly situated groups - one that received the new intervention and one that did 

not. However, there may not be sufficient number of duals in each state to serve as 

a comparison group during the evaluation of the demonstrations, especially if most 

or all beneficiaries in a state are enrolled in demonstrations. Additionally, eMS 

must evaluate on an ongoing basis and must impartially assess what policies are not 

viable. 

7. How will CMS evaluate whether demonstration projects are working? 

Answer: CMS is funding and managing the evaluation of each approved Demonstration. 

CMS has contracted with an external independent evaluator, RTI International, to 

measure, monitor, and evaluate the overall impact of the Demonstrations, including 

impacts on Medicare-Medicaid enrollees, expenditures, and service utilization. The 

evaluator will design unique, State-specific evaluation plans for each individual State 

participating in the Demonstration, as well as an aggregate analysis that will look at the 

Demonstration overall including Demonstration interventions and impact on key 

subpopulations within each State. The evaluation will use a mixed methods approach to 

capture and analyze quantitative and qualitative information. 
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The Memorandums of Understanding for Massachusetts, Ohio, and Washington provide 

examples of the types of areas that will be measured in all Demonstrations, including 

beneficiary experience of care, care transitions, support of community living, access to 

services, and shifts in service utilization patterns, among many others. Additional quality 

measures, as well as qualitative evaluation components such as beneficiary focus groups 

and key informant interviews, will be included in the State-specific evaluation plans. 

CMS will apply Medicare Part D requirements regarding oversight, monitoring, and 

program integrity to Demonstration plans in the same way they are currently applied for 

Medicare Part D for sponsors. 

8. Will you have a comparison group of duals who are not participating in the 

demo? 

Answer: The evaluation contractor will compare pre- and post-demonstration changes in 

outcomes of interest for the demonstration group with pre- and post-demonstration 

changes in a comparison group. The approach to comparison group identification will be 

State-specific; all comparison groups will be comprised of Medicare-Medicaid enrollees 

not participating in the Demonstration. 

The evaluation contractor will draw a comparison group of Medicare-Medicaid enrollees 

from statistically similar regions of the Demonstration State, or from one or more 

comparison States. Where comparison States are used, the evaluation contractor will use 

cluster analysis to identify the potential comparison States that are most similar to the 

Demonstration State. 

9. Will the evaluation process be on-going? 

Answer: Yes. The Center for Medicare and Medicaid Innovation has assembled the 

Rapid-cycle Evaluation Group to ensure that evaluations of CMS Demonstrations and 

models are designed to rapidly assess program effectiveness and evaluate the impact on 

the outcomes, quality, and cost of care. The Financial Alignment Demonstration 

evaluation will involve ongoing reporting and analysis throughout the Demonstration 

period, as well as a final impact analysis that will be performed at its conclusion. 

10. How will CMS determine if the demonstrations are succeeding or failing 

and what will CMS do in either event? 

Answer: The evaluation process described in the responses above, plus a wide array of 

day-to-day monitoring mechanisms, will inform CMS' determination on the success or 

failure of each demonstration. 

Under Section 3021 of the Affordable Care Act, the Secretary of Health and Human 

Services may expand the scope and duration of the testing of a model if she finds that a 

model reduces spending without reducing the quality of care, or improves the quality of 

care without increasing spending, and would not deny or limit the coverage or provision 

of benefits. The chief actuary of CMS must certify that such expansion would reduce (or 

not increase) net program spending. Additionally, the Affordable Care Act requires that 

the Secretary terminate or modify any demonstration failing to meet those objectives. 
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In addition, each approved Demonstration MOU specifies terms under which CMS and 

the State may extend or terminate the Demonstration if they are succeeding or failing. 

For examples, please see: Ohio MOU, page 16 available at: 

https:llwww.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-MedicaidCoordination/Medicare-Medicaid-Coordination-Office/Downloads/O HMOU. pdf; and 

Washington MOU, page 24 available at: http://www.cms.gov/Medicare-MedicaidCoordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-CoordinationOffice/Downloads/W AMFFSMOU.pdf. 

Rural Challenges 

About 30% of duals live in rural areas. One model for the demonstration gives 

states the option of a capitated payment model, where the state, the federal 

government and a managed care plan enter into a three-way contract to provide 

benefits to duals. Managed care and other care coordination models may not be 

available in rural areas. For example, in Montana, there is not a comprehensive 

network of Medicaid managed care plans. Therefore, proposals that would require 

duals to enroll in Medicaid managed care would not work in Montana. Proposals to 

improve care for duals should keep the challenges that rural areas present in mind. 

11. What do we need to keep in mind to make sure the needs of rural duallyeligible beneficiaries are also met? 

Answer: Tn September 2011 and August 2012, staff from the Medicare-Medicaid 

Coordination Office participated in rural health listening sessions on issues related to dual 

eligibility. The session highlighted several important themes to keep in mind, including: 

• Supporting the informal caregivers who playa critical role in helping people 

maintain their independence in the community 

• Recognizing the challenges of travelling long distances to see providcrs, and 

considering alternatives such as telemedicine; 

• Exploring current flexibilities within current integrated, person-centered care 

programs, to better serve Medicare-Medicaid enrollees in rural communities; and 

• Engaging with rural providers to better understand capacity issues related to 

specialty and HCBS providers in providing coordinated care for beneficiaries. 

12. Should we look for delivery models other than managed care in rural areas? 

Answer: The managed fee-for-service financial alignment Demonstration model is 

designed to promote greater coordination of care in fee-for-service environments. Feefor-service financing is especially prevalent in rural areas. Our first approved managed 

fee-for-service Demonstration model is in Washington State and it includes the rural 

areas ofthe state. 

Takeaways from the Demonstration 

CMS announced the financial alignment demonstration in July 2011. States that 

are participating will begin in either 2013 or 2014. These demonstrations are set to 
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run for three years. CMS's stated goals of the demonstration are to improve the 

quality of care and the overall beneficiary experience and to reduce costs. Some 

have raised concerns that this demonstration will continue after the initial three 

years at the request of states and managed care plans. 

13. What should we be watching as the demos progress? 

Answer: CMS will have fonnal internal and external evaluation and oversight 

mechanisms in place that will capture critical information for CMS, Congress, and other 

stakeholders to be watching as the Demonstrations' progress. 

Key objectives of the Demonstration are to improve the beneficiary experience in 

accessing care, deliver person-centered care, promote independence in the community, 

improve quality, eliminate cost shifting between Medicare and Medicaid, and achieve 

cost savings for the State and Federal government through improvements in care and 

coordination. In addition to these key objectives, we should also be looking for changes 

in the State-Federal dynamic - from one where each payor is trying to cost shift to the 

other to one where the programs are aligned in a manner that is most beneficiary friendly 

and programmatically efficient. Additionally, we should be looking at the way 

advocates, providers, and other interested stakeholders feel they are able to interact with 

CMS and the States, with the expectation being that the demonstrations are transparent 

and there are multiple and meaningful mechanisms for obtaining ongoing stakeholder 

(including beneficiary) input. 

14. At the conclusion of these demonstrations, what do you hope to learn? How 

will you help Congress make policy for duals? 

Answer: At the conclusion of the Demonstrations, CMS hopes to learn many new 

things that will help increase access to person-centered, seamless care programs for 

Medicare-Medicaid enrollees such as: 

• How and what it takes to improve the beneficiary's care experience with the 

Medicare and Medicaid programs; 

• Effective methods of communication with beneficiaries to increase their 

awareness of and satisfaction with the programs; 

• Through the capitated Demonstration model, test the hypothesis that holding one 

entity accountable - from a delivery and payment perspective - leads to better 

beneficiary experience and improved outcomes, and a better understanding of the 

elements that contribute to such a testing; 

• In the Managed fee-for-service model, test the hypothesis that aligning the 

incentives between Medicare and Medicaid so that Medicare-Medicaid 

beneficiarics - who have traditionally been excluded from care management 

programs - receive coordinated care that leads to a better beneficiary experience 

and improved outcomes, and determine which elements contribute to such a 

testing; and 

• In both models, further our understanding about how to apply different care 

models to different subpopulations depending on their needs and detennining how 

best to scale. 
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This list is not exhaustive, and as the Demonstration progresses, there will likely be new 

things that develop that we will want to learn more from during its course. 

The Medicare-Medicaid Coordination Office will work with Congress as it learns from 

the Demonstrations, as well as with the efforts outside the Demonstrations to better align 

the incentives across the two programs. As promising practices are identified, the 

Medicare-Medicaid Coordination Office will be in a better position to assess possible 

approaches for improved integration of the Medicare and Medicaid programs. 

Nursing Home 

Avoidable hospitalizations are disruptive, dangerous and costly. Approximately, 45 

percent of hospitalizations of duals are potentially avoidable with adequate 

monitoring and treatment by nursing facilities. CMS is partnering with seven 

organizations to implement strategies to reduce avoidable hospitalization for 

beneficiaries who are long-stay residents of nursing facilities. 

15. When docs the nursing home program begin? 

Answer: The Initiative to Reduce Avoidable Hospitalizations among Nursing Facility 

Residents will begin serving Medicare-Medicaid enrollees in February of2013. 

16. What impact do you expect it will have on improving care for duals and 

reducing unnecessary costs? 

Answer: The Initiative to Reduce Avoidable Hospitalizations among Nursing Facility 

Residents is testing evidence-based interventions that reduce avoidable hospitalizations 

and improve beneficiary care. The goals of this Initiative are to: (1) reduce the number 

of and frequency of avoidable hospital admissions and readmissions; (2) improve 

beneficiary health outcomes; (3) provide better transition of care for beneficiaries 

between inpatient hospitals and nursing facilities; and (4) promote better care at lower 

costs while preserving access to beneficiary care and providers. CMS expects that all 

seven of the partnering organizations will improve quality and safety, and generate 

savings achieved from a reduction in the number of avoidable hospitalizations. 

Senator Orrin G. Hatch 

Shared Savings 

CMS has now approved demonstration proposals from three states with MOUs 

signed with Massachusetts, Washington, and Ohio. A big incentive for states to 

implement these demonstrations is the opportunity for states to share in the savings 

that come from better care management. 
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1. Could you walk us through exactly how that financing of shared savings will 

work and also how CMS plans to monitor the savings as the demonstrations 

are implemented? 

Answer: CMS projects that the Demonstrations can achieve overall savings through 

improved care coordination, reduction of unnecessary or duplicative services, 

administrative efficiencies, and better access to community support services. In the 

capitated financial alignment Demonstration model, we apply a savings factor to the 

Medicare Parts A and B and Medicaid baseline components of the rate (the estimate of 

what would have been spent on Medicare Parts A and B and Medicaid services for the 

Demonstration population if the Demonstration did not exist). This approach is designed 

to allow both payers to share proportionally on their respective contribution to the 

capitation rate and in the savings achieved through the Demonstration. Our evaluation 

will track factors such as enrollment mix and risk adjustment to measure actual savings. 

Savings targets will not be applied to the Medicare Part D component of the rate. 

In the managed fee-for-service model, States will invest in new interventions for the 

targeted Demonstration population. If those interventions result in savings to the 

Medicare program and net overall Federal savings, after accounting for any increases to 

Medicaid spending, the State qualifies for a retrospective performance payment, subject 

to meeting certain quality standards. 

In all approved Demonstrations, shared savings will be reduced if patient quality is not at 

least maintained for the Demonstration population. Our external evaluator will monitor 

for savings and all savings will be subject to review by the CMS Office of the Actuary. 

Data Evaluation 

I am supportive of the goals of these state demonstrations, but I do want to make 

sure that Congress gets good data from them in order for us to make policy 

decisions in the future. So it is critical that we carefully monitor what happens with 

the demonstrations. 

2. I know that CMS has contracted with R-T-I International to evaluate the 

overall impact of the demonstrations, but could you give us the details of 

exactly what R-T -I will be monitoring and what CMS will be looking for? 

Answer: Each Demonstration will have its own State-specific evaluation plan. All of 

the State-specific plans will include a core set of quality measures to enable cross-State 

comparisons where possible. 

RTI will be monitoring and analyzing both qualitative and quantitative information 

throughout the Demonstration. It will monitor and evaluate the extent to which each 

State's Demonstration was implemented as designed, which will include Demonstration 

design features that reflect service delivery and financial integration. Beneficiary 

satisfaction and access to care will be evaluated through mixed (quantitative and 

qualitative) methods as well to capture beneficiary experience and perception of care 

received. Analysis of service utilization data will provide insight to changes in 

beneficiaries' access to and use of Medicare and Medicaid services. RTI will examine a 
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set of core quality measures focused on the needs of Medicare-Medicaid enrollees, such 

as follow-up after hospitalization for mental illness and screening for depression. Costs 

will be examined to learn whether certain types of intervention approaches save more 

than other types of approaches, or whether costs are lower in the Demonstration group 

compared with a comparison group for certain subgroups, such as the individuals with 

severe and persistent mental illness. 

3. Your testimony notes that both Washington and Massachusetts will have 

comparison groups to analyze the impact of the demonstrations, but will that 

be the case for every state that gets a demonstration approved by C-M-S? 

Answer: The evaluation contractor will compare pre- and post-demonstration changes in 

outcomes of interest for the demonstration group with pre- and post-demonstration 

changes in a comparison group. The approach to comparison group identification will be 

State-specific; all comparison groups will be comprised of Medicare-Medicaid enrollees 

not participating in the Demonstration. 

Senator Jay Rockefeller 

1. Why isn't the Medicare-Medicaid Coordination Office testing a fully 

federalized model of care for dually eligible beneficiaries? 

Answer: The Federal government and the States are full partners in the delivery and 

financing of care for dual eligibles. Our Demonstrations are structured to leverage and 

strengthen that partnership with a focus on creating accountability and aligning incentives 

between the payors as opposed to focusing on turning the program over to one payor or 

the other. 

2. Will the Coordination Office pilot a Medicare-only demonstration (that 

includes coverage of long-term care, supports and services) for dually eligible 

beneficiaries? 

Answer: As noted above, we are focusing on creating accountability and aligning 

incentives between the payors, as opposed to focusing on turning the program over to one 

payor or the other. States are our partners in the delivery and financing of care for this 

population, so we have focused our efforts on working with States to design these new 

models of care. That said, these Demonstrations are a full partnership between Medicare 

and Medicaid and are designed in a manner that incorporates the strongest aspects from 

both Medicare and Medicaid to best meet the needs of Medicare-Medicaid enrollees, 

their caregivers, and providers. Improving the quality of care for beneficiaries is the 

highest priority of these Demonstrations. 

Demonstration Size 

According to MedPAC, the Financial Alignment Initiative could include as many as 

3 million dually eligiblc beneficiaries if CMS allows all 26 states to move forward 
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with their proposals. That is nearly one-third of the entire dually eligible 

population (9.4 million)-far too large for a program that purports to be a 

"demonstration." CMS has claimed they plan to enroll a lower, yet still excessive, 

number of beneficiaries (2 million) and will limit the size and scope of state 

demonstrations that reach too far. 

3. What specific enforcement mechanisms will CMS use to guarantee the size of 

state demonstrations do not exceed target thresholds? 

Answer: CMS has committed to a cap of 2 million beneficiaries in the Demonstrations. 

We believe this is a reasonable limit to balance concerns with size and the ability to test 

models across the nation in different delivery systems, Slates, and target populations. 

This approach will allow CMS to provide Congress and others with information to scale 

and advance integrated care for this population. We are proceeding judiciously on a 

State-by-State basis and enrollment will be phased in to ensure it is carefully conducted. 

To that end, CMS has established oversight and monitoring mechanisms as well as 

operational and implementation milestones to ensure the Demonstration will preserve and 

strengthen Medicare-Medicaid enrollees' access to care, quality of care, and benefits. 

CMS ultimately controls how many beneficiaries will be approved to be enrolled in a 

given Demonstration 

4. How can we be sure that hcalth plans will not continue to enroll more and 

more beneficiaries even after targets have been reached? 

Answer: CMS will consider the total number of expected Demonstration participants as 

part of the approval process. In addition, CMS and the States will manage the enrollment 

process. Thus, we do not anticipate any ability for individual health plans to enroll 

numbers of beneficiaries in ways that would result in exceeding our overall limit of2 

million beneficiaries. 

Lock-In Policy 

The prospect of locking dually eligible beneficiaries into plans they did not select for 

themselves due to passive enrollment raises a number of concerns. While the three 

MOUs CMS has approved do not include a lock-in policy, a number of pending 

state proposals have lock-in periods that last up to 6 months. 

5. Can you confirm that CMS will not allow a lock-in policy to be used in any 

state demonstration moving forward? 

Answer: Beneficiaries can opt-out of these Demonstrations at any time. 

6. What specific steps is CMS taking to prevent "practical lock-ins" that may 

occur even if CMS does not technically approve a lock-in policy due to 

beneficiaries' lack of awareness about their ability to opt-out or a change in 

their health plan resulting from passive enrollment? 
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Answer: CMS will work with States to help ensure that robust enrollment assistance and 

options counseling services are available before and during enrollment into any 

Demonstration, and to ensure that beneficiary materials clearly articulate the right to opt 

out. Again, beneficiaries can opt-out of these Demonstrations at any time. 

Educating Beneficiaries 

I am very concerned that the high prevalence of cognitive impairment, limited 

English proficiency and literacy, blindness and mental health conditions among the 

dually eligible popUlation will create challenges in educating and informing 

beneficiaries about potentially drastic changes to their health coverage. 

7. In addition to the resources being made available to State Health Insurance 

Programs (SHIPs) to support counseling and education for beneficiaries in 

the demonstrations, what more is the Medicare-Medicaid Coordination 

Office doing to build a network of conflictfree supportive services-such as 

options counseling, enrollment brokers, the SHIPs, ombudsman programs 

and community-based organizations-for those enrolled in the 

demonstrations? 

Answer: Beneficiaries will receive clear, understandable notices that have been 

reviewed by advocacy organizations and field tested with beneficiaries. Outreach and 

education will proceed through multiple channels at multiple points in time and will take 

into account the prevalence of cognitive impairments and mental illness in this population 

as well as the incidence oflimited English proficiency. Independent resources, such as 

choice counselors and enrollment brokers, will assist beneficiaries in making enrollment 

choices. We will also leverage existing resources, such as State Health Insurance 

Programs and Aging and Disability Resource Centers, to provide one-on-one counseling 

on enrollment options. Special training for 1-800-Medicare operators will enable them to 

effectively assist beneficiaries. Finally, we anticipate providing support such as technical 

assistance and training for independent Ombudsman services, which will provide 

additional support and advocacy for beneficiaries and systemic oversight. 

8. What steps are states and CMS taking to ensure these organizations are 

conflict free? And how will the Medicare-Medicaid Coordination Office and 

participating State Agencies guarantee access to real-time information and 

resourccs about the participating plans to inform this network? 

Answer: CMS and States will use different approaches to verify and ensure that 

enrollment broker, Ombudsman, and options counseling organizations are independent 

and conflict free, largely through existing and new contracting requirements. 

CMS will require all plans to report performance and quality information to both CMS 

and States. This information will be shared, as appropriate, with Ombudsman and 

options counseling partners. 
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Removing Beneficiaries from Part D 

I am concerned that removing millions of duals from Medicare's prescription drug 

benefit (Part D) will limit plan choices for vulnerable populations with complex 

prescription drug needs. It may also reduce incentives for plans to bid low in the 

competitive bidding process to become eligible to automatically enroll LIS 

beneficiaries, thus having cost ramifications for all Medicare beneficiaries. 

9. Why can't you give beneficiaries the option of maintaining enrollment in 

their current Part D plan, or require plans participating in the 

demonstration to submit Part D bids, as PACE and Dual Eligible-Special 

Needs Plans already do? 

Answer: All beneficiaries will have the option to maintain enrollment in their current 

Medicare Part D plan. However, for those beneficiaries in the capitated model, Medicare 

Part D services will be integrated in the Demonstration health plan, as with all other 

Medicare and Medicaid services. We believe this is critical to maximizing the 

opportunities and incentives for care coordination, and it creates for a more seamless 

beneficiary experience. The capitation rates paid to Demonstration plans will reflect the 

results of the competitive bidding process, although the plans themselves will not bid in 

the same way. Moreover, the Demonstrations preserve Part D requirements including the 

strong beneficiary protections, network standards and protected classes. MedicareMedicaid enrollees will retain the right to disenroll from demonstration plans on a monthto-month basis throughout the entire duration of the Demonstrations. 

In the managed fee-for-service model, beneficiaries will select a Part D plan as they do 

today. 

10. You stated in your testimony before the Committee that the CMS Actuaries 

will be monitoring the Part D market for any problems and that you may 

have to reassess if issues arise. But why wait for a problem to develop before 

doing something about it when there are clear steps your office can take to 

prevent issues from arising in the first place? 

Answer: The Demonstrations have been designed in a way that preserves and protects 

the Medicare Part D program, and we are working with the Center for Medicare and the 

Office of the Actuary to monitor closely for this effect as the Demonstrations progress. 

There are a number of countervailing factors that may mitigate concerns about negative 

disruptions in the Part D market. In States where Demonstration plans go into effect, Part 

D plans will still have strong incentives to bid low in order to offer competitive premiums 

to the majority of Medicare beneficiaries who do not receive the low-income subsidy 

(LIS). Low-bidding plans will also be able to receive auto-assignment of LIS 

beneficiaries who are not full dual eligible beneficiaries (those who applied for LIS 

through the Social Security Administration and those deemed into LIS through 

enrollment in Medicare Savings Programs) if the plan bid is below the regional 

benchmark for the low-income premium subsidy amount. Plans with bids below the 
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benchmarks will also be able to offer zero-premium Part D coverage to full dual eligible 

beneficiaries who opt out or are otherwise excluded from the Demonstration. 

Voluntary Enrollment 

11. Given the limited experience among States Agencies and health plans with 

integrating care between Medicare and Medicaid, wouldn't it make more 

sense to use voluntary enrollment along with a robust outreach campaign to 

allow beneficiaries to opt in? 

Answer: State agencies and health plans have a range of experience with integrating 

care between Medicare and Medicaid. eMS will partner with States on coordinated 

outreach activities, and anticipates that many beneficiaries will assertively choose to 

participate in the new integrated care programs through the Demonstrations. All 

approved Demonstration plans will undergo a robust review process to help ensure 

preparedness and readiness to enroll and serve beneficiaries. Beneficiaries who choose to 

opt out may do so at any time. eMS will continue to work with its State partners and 

contracted plans to monitor beneficiary enrollment and disenrollment, and will make any 

adjustments that are necessary to support beneficiary needs. 

12. Why can't states use voluntary enrollment for an initial period of time to 

reach enrollment targets before resorting to passive enrollment? 

Answer: States can use opt-in enrollment for an initial period of time prior to passive 

enrollment. Both of the capitated Demonstrations approved to date (in Massachusetts 

and Ohio) include an initial opt-in enrollment period. 

Readiness 

The Financial Alignment Initiative strives to do too much too quickly. There seems 

to be an extremely short timeline for designing and launching the state 

demonstrations, despite the complexity or coordinating care for the dually eligible 

population. Assessing health plan readiness-from network adequacy to 

organizational infrastructure to in-depth assessment tools and staffing-is a 

complex task that must be carcfully done. Many of the health plans participating in 

these demonstrations will have little to no experience managing care for this 

population. 

13. How can eMS really guarantee that plans will be ready to enroll people--

especially those with the most complex health needs-on day one? 

Answer: As part of the Medicare-Medicaid capitated Financial Alignment model, eMS 

and States want to ensure that every selected Medicare/Medicaid plan (MMP) is ready to 

accept enrollment, protect and provide the necessary continuity of care, ensure access to 

the spectrum of Medicare, Medicaid, and pharmacy providers, and fully meet the diverse 

needs of the Medicare-Medicaid popUlation. As such, plans must first mcet core 

Medicare and Medicaid requirements, State procurements standards and State insurance 

rules ( as applicable). Every selected MMP must also pass a comprehensive joint 

eMS/State readiness review. 
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CMS and Massachusetts developed a State-specific readiness review tool, based on the 

MOU signed on August 22, 2012, applicable Medicare and Medicaid regulations, the 

Commonwealth's Request for Responses from Integrated Care Organizations, and 

stakeholder feedback. The readiness review protocol is available on our website at: 

http://www.cms.gov/Medicare-Medicaid-CoordinationlMedicare-and-MedicaidCoordinationiMedicare-Medicaid-CoordinationOffice/FinancialModelstoSupportStatesEffortsinCareCoordination.html 

CMS is following a similar process with each State participating in the Demonstration. 

The readiness review process includes desk reviews, site visits, validations of the 

provider and pharmacy networks, review of key subcontracted entities, and validation of 

systems and capacity to ensure that each MMP has the ability to offer high-quality, 

coordinated care while adhering to all federal and State requirements. Importantly, there 

will be a specific focus on those areas and processes that directly impact the beneficiary'S 

care including assessment processes, care coordination, provider network development 

and maintenance, and the MMP's staffing and staff training. 

Stakeholder Involvement 

Stakeholder involvement will be crucial both as states design their programs and 

throughout the life of the demonstrations. While the Medicare-Medicaid 

Coordination Office has facilitated stakeholder engagement throughout the design 

process, there seems to be no requirement that this level of engagement will continue 

throughout the entire demonstration. This is a necessary form of oversight that will 

provide early warnings about flaws or concerns with state programs. 

14. Will you require all states and plans to regularly seek input from 

beneficiaries (and those that represent them) and demonstrate how they 

incorporated this input even after implementation is underway? 

Answer: Yes. CMS will continue to require that all States and participating 

Demonstration plans regularly seek input from stakeholders. CMS and States will 

require regular meetings with beneficiary stakeholders and continued opportunities for 

feedback on Demonstration operations. Additionally, plans are required to have 

beneficiary participation on advisory or governing bodies. In the Massachusetts 

Demonstration, for example, the State has established an implementation council through 

which beneficiaries and advocates have a critical role in Demonstration implementation 

and we will encourage other States to implement a similar role for beneficiaries. 

15. How is the Coordination Office responding to states that appear to be 

ignoring stakeholder input throughout the design process? 

Answer: A robust stakeholder process is a core standard and condition for approval. 

States not engaging with stakeholders will not move forward with a Demonstration until 

they do so. 
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The Medicare-Medicaid Coordination Office has repeatedly touted that CMS has 

not set a national savings target for the Financial Alignment Initiative. However, I 

remain concerned that the demonstration programs are more focused on reducing 

costs than improving quality-even though improving quality and care delivery was 

the express intent of the authorizing legislation. Under the capitated model, CMS 

will not allow a demonstration to move forward if it fails to produce upfront savings 

by a state-specific threshold established in the MOU. The Ohio MOU projects that 

the demonstration will achieve savings even in its first year. Please identify the 

savings targets for years one, two and three for all approved state MOUs that are 

based on the capitated model. 

Answer: The savings targets for years one, two and three for approved MOUs based on 

the capitated model are available at: 

Massachusetts MOU, Regarding a Federal-State Partnership to Test a Capilated Financial 

Alignment Model for Medicare-Medicaid Enrollees, page 40 and 46. Available at: 

https:llwww.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-MedicaidCoordination/Medicare-Medicaid-Coordination-Office/Downloads/MassM OU. pdf; and 

Ohio MOU, Regarding a Federal-State Partnership to Test a Capitated Financial 

Alignment Model for Medicare-Medicaid Enrollees, page 39. Available at: 

https:llwww.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-MedicaidCoordination/Medicare-Medicaid-Coordination-Office/Downloads/OHMOU.pdf. 

16. Since the vast majority of the states are pursuing the capitated model, is this 

not establishing a national savings target by default? 

Answer: CMS projects that each approved Demonstration can achieve overall savings 

through improved care management and administrative efficiencies. There will be 

different savings opportunities across states and within each Demonstration model 

(capitated and managed fee-for-service). CMS has not set forth a national savings target. 

17. What are these projections based upon? 

Answer: CMS projects that the Demonstrations can achieve overall savings through 

improved care coordination, reduction of unnecessary or duplicative services, 

administrative efficiencies, and better access to community support services. Savings 

opportunities will vary by State depending on a number of factors, as described above. 

Analytic work, together with input from States and others, will inform the selection of a 

savings estimate. While some States may have lower or higher savings potential than 

other States, CMS anticipates applying consistent savings factors across States with 

comparable ranges of potential savings. 

18. Given that there will be significant start-up costs involved in setting up 

systems and getting beneficiaries stabilized, are year one savings realistic? 
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Answer: We recognize there are indeed upfront costs for organizations to prepare for 

implementation, even before any beneficiaries enroll; however, there are also significant 

areas of inefficiency and overlap and immediate care coordination opportunities, which 

are the basis for anticipating that modest savings are achievable in year one. 

19. Can the Coordination Office and state agencies provide more detailed 

breakdowns of expected savings? 

Answer: We have structured the capitated financing model to achieve proportional 

savings, on a percentage basis, to Medicaid and Medicare Parts AlB. We do not apply 

any savings factor to Part D payment. The savings factors applied in each Demonstration 

are included in the Memorandums of Dnderstandings (MODs) posted on our website l

. 

Risk Adjustment 

About 20% of the duals population needs substantial amounts of long-term services 

and supports. Clearly, we want to limit the financial incentives for plans to make a 

profit by under-serving these beneficiaries-particularly since participating plans 

will not be subject to a medical loss ratio (MLR) requirement. And, yet, at least in 

the Massachusetts demonstration, reinsurance is only available for the first year. 

20. Why aren't you using a reinsurance structure - including risk corridors and 

high-cost risk pools-for the full course of the demonstration? 

Answer: The payment provisions, including the use of a reinsurance structure, reflect 

the unique circumstances that prevail in each State. In the Massachusetts Demonstration, 

the State uses a risk corridor for the first 18 months of experience to protect against 

excessive loss or gains by the participating health plans. In Ohio, participating plans in 

the Demonstration are subject to an MLR requirement. In all approved Demonstrations, 

we will use risk adjustment techniques to match payment to risk and mitigate any 

differences among plans in thc proportion of their enrollees who have high costs. And in 

all approved Demonstrations, CMS will apply risk corridors and reinsurance provisions 

and reconcile Medicare Part D expenditures, just as we do today. Collectively, these 

measures help balance interests by protecting and stabilizing the marketplace while also 

incentivizing plans to manage risk and invest in the types of interventions that help 

people live independently and avoid costly adverse outcomes. 

21. What are you doing to start improving risk adjustment by collecting data on 

beneficiaries' "functional status" (e.g., do they need assistance with 

dressing, bathing, feeding etc.)? 

Answer: The Demonstrations present an opportunity to capture functional status 

information on a systematic basis and develop methods to apply it to risk adjustment. 

CMS is at the early stages in exploring how to better use this information data to foster 

improvement through use of data on beneficiaries' functional status, and will continue to 

work with Congress and others as progress is made to ensure risk is properly adjusted and 

I https:llwww,cms,gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/MedicareMedicaid-Coordination-Office/FinanciaIModelstoSupportStatesEffortsinCareCoordination,html 
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beneficiaries receive necessary long-term services and supports. Massachusetts, for 

example, will capture functional status information in a uniform assessment applicable 

for all demonstration enrollees. 

Senator Charles Schumer 

Improving Care for Dually-Eligible Beneficiaries 

As you know, many individuals dually eligible for Medicaid suffer from multiple 

chronic conditions, including severe mental illness and cognitive impairments, such 

as traumatic brain injury. Some states are proposing to fold existing home and 

community-based (HCBS) waiver programs serving individuals who have complex 

medical and behavioral conditions into their integrated care demonstrations. This 

must be done carefully to ensure that persons already rcceiving long-term services 

and supports and service coordination continue to have access to these services and 

care management tailored to meet their specific needs. 

1. Can you please tell the Committee if the Medicare-Medicaid Coordination 

Office is using objective criteria to evaluate the proposed inclusion of HCBS 

waiver populations into the duals demonstrations, or is requiring states to 

develop such criteria for participating health plans? 

a. If the answer is yes, would it be possible to provide the Senate Finance 

Committee with more details about how such criteria is being 

developed and applied? 

Answer: Yes. CMS is using the standards and conditions required to participate in this 

Demonstration as the consistent starting point for determining whether HCBS waiver 

populations will be included in a State Demonstration, when States have proposed to 

include them. Additional applicable criteria may differ by State, to account for different 

State proposals and pre-Demonstration circumstances. 

CMS will use a range of approaches to monitor and evaluate the performance of the 

Demonstration for HCBS waiver popUlations, as well as other key sub-populations. 

While some of the criteria and approaches will be State-specific, monitoring and analysis 

for all States will include access to and utilization ofHCBS - as well as HCBS relative to 

facility-based care. Quantitative data will be stratified by HCBS waiver populations 

where applicable, and focus group and key informant interview questions will ensure that 

actual beneficiary and stakeholder experiences provide context for the data. 

b. If the answer is no, can you please explain how your office is 

evaluating whether inclusion of these waiver populations would either 

improve care and reduce costs or, at the very least, produce savings 

without putting these individuals at risk of receiving inferior care? 
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2. For states proposing to include Medicare-Medicaid enrollees currently 

receiving home and community-based (HCBS) waiver services in their 

capitated financial alignment demonstrations, are you requiring them to 

maintain the same set of services in the demonstration? 

a. If yes, are you also requiring that states ensure continued access to 

this set of services for enrollees who choose to opt out of the 

demonstration? My concern is to make sure that everyone who 

currently has access to HCBS services or who could qualify to receive 

them in the future -- allowing them to remain in their homes and live 

independently - will not lose access if they choose not to participate in 

the demonstration. 

Answer: Under the Demonstration beneficiaries will receive current Medicare and 

Medicaid services, as well as new and/or enhanced care coordination, protections, and 

services. To that end, beneficiaries in the Demonstration will not lose their access to 

current HCBS services, and in many cases will receive enhanced HCBS services as a 

result of the Demonstration. For example, in Ohio, participating beneficiaries will have 

access to a more robust set ofHCBS benefits and services than they do today. 

Senator Bill Nelson 

Bad Debt 

Medicare bad debt payment help to reimburse skilled nursing facilities (SNFs) and 

hospitals for any unpaid deductibles or other costs incurred while caring for a dualeligible beneficiary. Medicaid is meant to "wrap-around" Medicare for dualeligibles and pay the Medicare deductibles and copays for these enrollees, who by 

definition have limited financial resources. However, many states pay less than the 

Medicare reimbursement levels and therefore do not pay providers these costsharing obligations. 

Medicare bad payments are crucial to providers serving dual-eligible beneficiaries. 

Beginning October 1, Medicare is no longer reimbursing skilled nursing facilities for 

100 percent ofthis uncompensated care. Facilities in Florida are particularly 

affected by the phase-down in bad debt rcimbursement. 

1. In states like mine where Medicaid does not pay for dual eligible SNF co-pay, 

what recourse does the provider have? 

Answer: Federal law allows State Medicaid agencies the option not to pay the Medicare 

cost sharing in certain circumstances. In States that choose this option, SNFs typically 

receive Medicare bad debt payments. eMS is aware of provider difficulties in securing 

payment for services and is continually working with internal and external partners on 

more fully addressing this issue. 
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Senator Tom Carper 

My core principle in reforming our country's health care system is finding ways to 

get better health outcomes while lowering costs. Better health outcomes are 

especially important for duals because these patients, who are often the most 

vulnerable of our Medicare and Medicaid populations, also receive substandard and 

misaligned health care. Among all the programs to help duals, the PACE program 

stands out by consistently providing high quality, team-based care for a set cost. 

Fortunately, states and PACE programs are interested in expanding the program by 

changing requirements that could hclp PACE to serve more duals. 

1. Are you and your colleagues trying to expand the PACE program? 

Answer: CMS is committed to partnering with Congress, States, caregivers, providers 

and others to explore new ways to better coordinate services and improve health 

outcomes for Medicare-Medicaid enrollees. CMS continues to engage in various 

conversations regarding the PACE program with a number of States and the National 

PACE Association through regulatory and sub-regulatory policies. Furthermore, the 

Medicare-Medicaid Coordination Office's FY 2011 Report to Congress suggested 

potential approaches for expanded flexibilities within the PACE program. 

2. What can my colleagues and I do to help CMS increase access to PACE? 

Answer: Potential areas for Congressional exploration were reported in the MedicareMedicaid Coordination Office's FY 2011 Report to Congress, and include: issues of 

eligibility, additional operational partners, alternative settings, and tailored 

multidisciplinary teams within the PACE program. 

Community Health Centers 

I'm especially interested in the role that community health centers play in serving 

our nation's most vulnerable populations. I know health centers in Delaware 

provide comprehensive primary and preventive care to their patients, in addition to 

meeting many of patients' additional needs, such as management of chronic diseases 

and health education, to help their patients stay out of costly care settings like the 

emergency room. This full spectrum of care is important for all patients, but 

especially our dually eligible patients whose resources are limited and whose health 

needs grow more complex as they age. 

3. As health centers serve a significant and growing number of duals, what 

role do you see health centers playing now and in the future as primary and 

preventive health care providers to this important population? For example, 

how are you working to ensure that community health centers will be 

included in demonstration programs to improve health care for duals? 
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Answer: There are a number of ways in which Community Health Centers will be a 

part of the Demonstration, depending on the State and the model. In the capitated 

financial alignment model, CMS is applying network adequacy standards to ensure that 

all health plans have sufficient number of providers and continuity of care protections to 

ensure that beneficiaries can continue to see current providers (including those at 

community health centers) during any transitions into the Demonstration health plan. 

The managed fee-for-service model presents opportunities for additional resources to be 

directed to primary care providers through care management payments or enhanced rates. 

Both examples help CMS ensure that providers such as Community Health Centers are a 

part of the Demonstration. 

Senator John Thune 

It is no secret that South Dakota is a very geographically sparse state. 

1. How do you envision a duals demonstration working in a geographically 

sparse state like South Dakota when there are no Medicaid managed care? 

Answer: The managed fee-for-service financial alignment model is designed to promote 

greater coordination of care in the fee-for-service environments that are especially 

prevalent in rural areas. Our first approved managed fee-for-service model is in 

Washington State and includes the rural areas of the state. 

2. Is thcre a methodology for forecasting savings in these types of states? 

Answer: In the managed fee-for-service model, States will invest in new interventions 

for the demonstration population. If those interventions rcsult in savings to the Medicare 

program and net overall federal savings, the State qualifies for a retrospective 

performance payment, subject to meeting certain quality standards. We assess the 

potential for savings on a state-by-state basis, and are informed by state-specific factors 

such as Medicare and Medicaid expenditures for Medicare-Medicaid enrollees, managed 

care penetration, long-term care service users by type of provider, and rates of avoidable 

hospitalization. 

3. How would that methodology account for the fact that those states do not 

have Medicaid managed care? 

Answer: At its root, our methodology for projecting potential savings from improved 

care coordination and integrated benefits for Medicare-Medicaid enrollees is based on the 

prevalence in the current care delivery system of the principal factors driving high cost, 

suboptimal care, including potentially avoidable hospitalizations, hospital readmissions, 

and the overuse of institutional care compared to community-based long term care 

services and supports. Wc belicve these cost drivers can be addressed in all States, 

including those without Medicaid managed care, through aligning financial incentives 

across Medicare and Medicare and providing Medicare-Medicaid enrollees with a more 

integrated, coordinated care delivery system. 
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THOMAS J. BETLACH 

DIRECTOR 

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM 

IMPROVING CARE 

FOR DUALLY-ELIGIBLE BENEFICIARIES 

TESTIMONY BEFORE THE U.S. SENATE FINANCE COMMITTEE 

DECEMBER 13, 2012 

Chairman Baucus, Ranking Member Hatch, and Members of the Senate Finance Committee, 

thank you for the invitation to discuss Arizona's use of managed care to improve the lives of 

individuals enrolled in both the Medicare and Medicaid programs. 

Arizona has maintained a system of managed care for its entire membership, including dual 

eligible members, since joining Medicaid in 1982. Arizona also offers the unique perspective of 

a state that has one-third of its dual eligibles in their Medicaid health plan for both Medicare and 

Medicaid. 

Thirty years of experience have shown us it is precisely our frailest members most in need of the 

care coordination managed care offers. Medicaid managed care for dual eligible members is not 

an "experiment" but rather a documented success. 

In Arizona, 82 percent of our elderly and physically disabled population that is at risk of 

institutionalization is dually eligible. The model of care for this population in many states is 

nursing home placement. Over the past decade, AHCCCS and its health plans have progressed 

from 40 percent of its members in the home or community to 73 percent, saving $300 million 

this past year. For members at risk of institutionalization with a developmental disability, 98 

percent live at home or in the community, contributing to Arizona's number one ranking by 

United Cerebral Palsy. 

More importantly, keeping people out of institutions increases member satisfaction and offers a 

higher quality of life. Providing the right kinds of care coordination to keep people at home is a 

Medicaid skill set. 

Recently Avalere Health compared national data for duals enrolled in traditional Medicare feefor-service to dual eligibles served by an AHCCCS health plan for both Medicare and Medicaid. 

The aligned AHCCCS duals exhibited: 

• 31 % lower rate of hospitalization; 

• 43% lower rate of days spent in a hospital; 

• 9% lower ED use; and 

• 21 % lower readmission rate. 
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Alignment works. Equally important, Arizona has proven passive enrollment works. When 

Medicare Part D was created, Arizona encouraged its Medicaid plans to become Medicare 

Advantage Special Needs Plans. In 2006, approximately 39,000 members were passively 

enrolled in their Medicaid plan to provide better continuity of care for Part D implementation. 

Arizona's strong transition planning and protocols successfully ensured member protections with 

minimal disruption during this process. 

Given our docnmented success improving the delivery system for dual eligibles, Arizona 

enthusiastically participated in the Duals Demonstration initiative. After extensive stakeholder 

engagement, Arizona submitted a proposal that sought to increase dual alignment from 40,000 to 

100,000 beneficiaries. 

I applaud the passionate and consistent leadership Melanie Bella has provided to bring about 

change. Despite her best efforts, the process has moved slowly. With over 20 states submitting 

demonstrations and limited resources, delays are understandable. What is disappointing is the 

delay stemming from an inability by stakeholders to fully acknowledge the failures in the current 

system design and the negative impact that has had for this popUlation. 

It is frustrating to hear Medicaid managed care dismissed by some as an option for duals while 

others suggest that states are either ill-intentioned or incapable of achieving success for this 

population. This is not about achieving a budget target. States like Arizona want to move the 

system forward, improve care for our citizens and be responsible with the taxpayers' dollars. 

To think, as I have seen some suggest, that Medicare can be the sole answer for dual members is 

simply wrong. Medicare has very limited knowledge and experience in home and community 

based services, community supports or behavioral health. States have managed these issues for 

duals; states understand their local communities best. 

Equally disconcerting is this notion that states are moving too fast and the demonstrations are too 

big. We have had 47 years of fragmentation. We have decades of comparison data that show the 

shortcomings of the existing system. We know what is not working for the people we serve and 

the taxpayers who are footing the bill. The current system is indefensible and unsustainable; we 

should not wait any longer to build upon a proven model. 

Forty seven years ago Congress designed a system of care that required low-income elderly and 

disabled Americans to receive their healthcare from two distinct, massive and complicated 

systems. The result is what one would expect: a fragmented, complicated, bureaucratic delivery 

system with higher costs, poorer outcomes and no single point of accountability for the 

beneficiary and their family. 

Dr. Alain Enthoven defined "'Fragmentation' in healthcare delivery as the systemic 

misalignment of incentives, or lack of coordination, that spawns inefficient allocation of 

resources or harm to patients. Fragmentation adversely impacts quality, cost, and outcomes." In 

short, we are perpetuating a system that is not only too expensive but is harming patients. 
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One of my favorite articles is "Hot Spots" by Atul Gawande published in The New Yorker. "Hot 

Spots" describes how Dr. Jeffrey Brenner worked to positively change the health care system for 

our neediest citizens in a way that improved outcomes and reduced costs. For us as a nation, 

dual eligible members represent a Hot Spot opportunity. 

As we rapidly approach the Golden Anniversary for Medicaid and Medicare, it is time for 

Congress to act in partnership with the states to develop a new delivery system that will 

eliminate fragmentation and confusion while better meeting the needs of the dual eligible 

members and their families. 

Congress should create a system that takes into account the fact that this population is not 

homogenous and some members rely more on critical services provided by Medicaid like long 

term care support services and behavioral health. The system must ultimately take the best of 

both Medicare and Medicaid to create a program that determines who will be truly accountable 

for improving outcomes for these members while bending the cost curve. 

Thank you again for the opportunity to briefly share our experiences in Arizona with the 

Committee. 
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STATEMENT OF HON. ORRIN G. HATCH, RANKING MEMBER 

U.S. SENATE COMMITIEE ON FINANCE HEARING OF DECEMBER 13, 2012 

IMPROVING CARE FOR DUAllY-ELIGIBLE BENEFICIARIES: A PROGRESS UPDATE 

WASHINGTON - U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance 

Committee, delivered the following opening statement at a committee hearing evaluating 

efforts to improve care and lower costs for patients who are eligible for both Medicare and 

Medicaid programs: 

Thank you, Chairman Baucus, for holding this hearing. It will allow us to get a progress 

update on efforts to improve the care for beneficiaries eligible for both Medicare and Medicaid. 

In an otherwise partisan atmosphere, today's topic is refreshing. It represents an area where 

we can achieve some real bipartisan agreement to lower health care costs and improve patient 

care. 

There are more than 9 million Americans - commonly known as duals - are eligible for 

both the Medicare and Medicaid programs. 

These patients often suffer from multiple chronic conditions and have complex medical 

needs. The $300 billion spent on their care every year is generally separated by complicated 

Medicare and Medicaid payment rules. Unfortunately, the system is not serving taxpayers well, 

and it is not serving patients well either. 

I would note that many promising efforts have been made to address these needs, such 

as various state-driven efforts, the Special Needs Plans in Medicare Advantage and the Program 

of All-Inclusive Care for the Elderly, which is known as PACE. While these approaches have 

made a huge difference, there is much more work to be done. 

I know that our first witness, Melanie Bella from CMS, has been working hard to solve 

these problems. 

Ms. Bella has led the Financial Alignment Initiative to encourage states to design 

solutions that integrate care delivery and funding streams for dually-eligible beneficiaries. She 

is actively working with 25 states to approve and implement these proposals. 

Today, we will hear from two states with approved proposals - Washington and Ohio 

- and another - Arizona - whose proposal is under review. 

I am supportive of state-designed efforts generally, and I applaud Ms. Bella for her 

pragmatic and compassionate approach to a very difficult task. 

However, I do want to make sure that we get the details right. In order to ensure these 

demonstrations are successful, I and six other Members of this Committee sent a letter to CMS 

in June outlining three priorities. 
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First, the demonstrations should be of a size and scope that gives Congress data upon 

which to base future policy-making. Second, these proposals should be consistent with good 

government principles so that contracts are competitively bid on cost and quality across a level 

playing field. And finally, we need to be sure that these demonstrations protect the integrity of 

the Medicare Part D program. 

Again, Mr. Chairman, thank you for scheduling this important and timely discussion. I 

look forward to working with you on this issue and hearing from our witnesses today. 

### 
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Oral testimony for Senate Finance Committee 

MaryAnne Lindeblad, Director, Washington State Health Care Authority 

10 a.m. December 13, 2012 

Dirksen Office Building, Washington. D.C. 

Chairman Baueus, Committee members, Distinguished Guests: 

It is my great pleasure and distinct honor to report on Washington State's HealthPathWashington 

- which is a forward-looking Medicare-Medicaid initiative aimed at integrating primary and 

acute care, behavioral health, and long-term care services and supports. It is a more costeffective structure that will save Medicaid dollars, but its real purpose is to improve care and the 

overall health status of these clients. 

The initial strategy will begin in April next year with newly developed and community-based 

Health Homes for up to 30,000 of the state's highest-need "dual eligibles." While the dual 

eligibles only account for 13 percent of our state's Medicaid caseload, they account for 30 

percent of our costs - so this is a priority project on several levels, including the need to provide 

more effective care to this population. 

By definition these are fellow Washingtonians of very low-income and with few financial 

resources. And there are other concerns. 

Many, if not most, experience significant challenges caused by disability, mental illness and/or 

chemical dependence, which complicate delivery and payment of their care. As a result, this 

population is made up of people who require a variety of services including medical, mental 

health, chemical dependency and long term services and supports and therefore are among the 

most costly segment of the entire beneficiary population. 

In April 2011, Washington State was one of 15 states that received a planning grant from the 

federal government's Centers for Medicare and Medicaid Services (CMS). The grant monies 

were made available for developing an implementation plan that would lead to innovative ways 

to integrate and care for individuals who receive services from both Medicare and Medicaid. In 

the Evergreen state, the number of individuals who are fully eligible for Medicare and Medicaid 

is approximately 115,000. The proposed implementation plan was submitted to CMS in late 

April 2012, and our initial strategy was approved by CMS two months ago, in October 2012. 

Today, Washington is already moving forward to implement HealthPathWashington's multipronged approach to: 

Improve beneficiary experience in accessing care. 

Promote person-centered health action planning. 

Promote independence in the community. 

Improve quality of care. 

Assist beneficiaries in getting the right care at the right time and place. 

Reduce health disparities. 

Improve transition among care settings. 

Achieve cost savings for the state and federal government through improvements in 

health and functional outcomes. 
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Integrating Medicare and Medicaid services means coordinating the delivery, financing, 

technology and human touches experienced by dual beneficiaries. By aligning payment, 

outcome expectations and services, confusion and fragmentation will be diminished. This will 

improve the beneficiaries' experience with service delivery, improve health outcomes and better 

control future costs. 

Two Financial Models: 

• Washington's first strategy will focus on incorporating high-risk dual eligibles into 

Health Homes as part of a Managed Fee-for-Service financial demonstration. (A 90 

percent federal match for health home services is available for the first eight fiscal 

quarters ofa State Plan Amendment.) 

• The second strategy which is still being negotiated with CMS and with counties that 

will take a leadership role - will offer dual eligibles a fully capitated combined MedicareMedicaid Managed Care benefit package in specific counties. 

Both strategies will rely on a predictive modeling system called PRISM - it stands for 

"Predictive Risk Intelligence System". PRISM is a system developed by our state to sift existing 

health care data and assign risk scores that identify those clients in need of chronic care 

management and timely interventions that will provide more effective care. (I've included more 

information on predictive modeling and PRISM in my written testimony.) 

Currently, payment for health care services is chietly tied to the provision of distinct services, 

treatments or interventions and is not oriented to performance-based outcomes. Yet the greatest 

public expenditures and most preventable health outcomes are associated with complex needs 

that cut across the disciplines represented by each delivery silo. Washington State intends to 

demonstrate two distinct solutions, using two separate financial models aimed at integrating care 

for the dual eligible. 

A word about the great stakeholder work that went into our project: The state reached out to a 

wide array of beneficiaries, providers, health plans and advocates - all of who, provided valuable 

insight that helped to inform the strategies outlined in our proposal to CMS. 

Stakeholders were invited to participate through a number of methods including: interviews, 

forums, presentations, focus groups and webinars. Individuals and organizations were also asked 

to submit written comment and feedback on the draft design plan and did so using a variety of 

communication methods including surveys, letters, email, and in-person meetings. Throughout 

the development of its design plan, the state shared approaches and sought comments from 

beneficiaries, their families, advocacy groups, providers, impacted organizations and entities, 

government entities and other key informants. Of particular importance to all was the 

preservation of consumer choice and development of adequate consumer protections. For 

example, while both of the state's strategies rely on passive enrollment, they also support 

optional dis-enrollment at any time. 
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This ongoing dialogue between bureaucrats, the health care industry and the stakeholders -

providers, clients, advocates - will be invaluable in shaping the integration strategies as well as 

identifYing operational and implementation issues that can be resolved in the process. 

The state will continue to work with stakeholders and other interested and impacted parties as 

work on the project now moves from the design to the implementation planning phase. Materials 

for outreach, education, and training will be developed and shared with our 

HealthPath Washington Advisory Team, a group comprised of 35 members representing 

advocates, providers, health plans, and beneficiaries that continues to meet regularly to assist 

with implementation of these Financial Demonstrations. 

In final form, HealthPath Washington is not just about a medical model. Rather, it represents a 

holistic approach - one that embraces different levels and categories of health care - and puts the 

patient, not the program, at the center of the system. 

Washington has a long history of innovation and has achieved progress in rebalancing services 

and supports away from institutional care. 

Concern about duals is not new. Since Governor Gregoire chaired the National Governors 

Association (NGA) 2010-2011, the NGA has included as part of its standing health policy 

language to support state-federal coordination with respect to duals. As recently as this month 

(Tuesday, December. 4), members of the NGA Executive Committee met with President Obama 

and Vice-President Biden at the White House and raised the importance of working together on 

dual eligibles. 

In a nutshell, the problem that duals face, traces back to the fact that almost all care and payment 

for Medicare and Medicaid beneficiaries are handled through separate systems and financial 

models. Services are fragmented, care is not well coordinated, and there exists a lack of 

accountability to make sure that healthy outcomes are measured or achieved and that individuals 

receive the right care at the right time and place. 

From the beneficiaries' perspectives, there is confusion about navigating the systems, and this 

can result in significant cost shifting while making it problematic to avoid high cost care in 

emergency rooms, hospitals, and other institutional settings. 

HealthPath Washington targets these concerns and provides realistic solutions - a better planned 

better coordinated, cost-effective system that will provide a healthier dual eligible population, 

significant cost savings, and an improved care structure. 
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JOHN B. McCARTHY 

DIRECTOR 

OHIO MEDICAID - OFFICE OF MEDICAL ASSISTANCE 

CARE DELIVERY COORDINATION THROUGH 

MEDICAID-MEDICARE INTEGRATION 

THURSDAY, DECEMBER 13,2012 

Chairman Baucus, Ranking Member Hatch, and members of the committee, thank you for the 

invitation to discuss Ohio's ongoing effort to create and implement an Integrated Care Delivery 

System (ICDS) for Medicare-Medicaid enrollees. 

My name is John McCarthy and I oversee the Office of Medical Assistance (OMA) as Medicaid 

Director for the State of Ohio. An office within the Ohio Department of Job and Family Services, 

OMA is currently in the process of becoming our state's first cabinet-level Medicaid agency - a 

move aimed at bringing comprehensive reform and quality improvement to Ohio's health care 

landscape. Better care planning and coordination for Medicaid's dual eligible popUlation is 

central to this work. 

Approximately 182,000 Ohioans are covered by both Medicare and Medicaid. However, the 

absence of any significant degree of coordination in the delivery of benefits between the two 

programs has contributed to a diminished quality of care. Frankly, the current system is 

confusing and difficult to navigate and no single entity is accountable for the whole person. 

Additionally, despite substantial investments, Ohio's long term care services and supports 

remain in the third quartile of states and such spending will prove unsustainable with the rapid 

aging of Ohio's population. This has led to the fact that individuals enrolled in both programs 

make up 14 percent of Ohio's Medicaid enrollment, but they account for 34 percent of all 

expenditures. Clearly a 'hot spot' in the discussion involving care quality and cost-containment, 

the time has come to improve coverage for individuals enrolled in both Medicaid and Medicare. 

In its efforts, Ohio is hoping to achieve the following: 

• One central point of contact for enrollees; 

• Person-centered care that is maintained seam lessly across services and settings of care; 

• A system that is easy to navigate for both enrollees and providers; and 

• Lower care costs through wellness, prevention, coordination, and community-based 

services 
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On April 2, 2012, Ohio submitted its Integrated Care Delivery System (ICDS) proposal to the 

Centers for Medicare and Medicaid Services (CMS). Ohio envisions the creation of a fully 

integrated system of care that provides comprehensive services to individuals enrolled in both 

programs across the full continuum of Medicare and Medicaid benefits. Through this model, we 

anticipate that more individuals enrolled in both programs will receive the medical and 

supportive services they need not only in a more coordinated and integrated fashion, but in their 

own homes and other community-based settings - rather than in more costly institutional settings. 

Ohio has chosen the capitated managed care model offered by CMS. Through this CMS 

Medicare-Medicaid demonstration program, Ohio will develop a robust care-delivery system 

capable of managing the full spectrum of benefits made available to individuals, including long 

term services and supports (L TSS). Our proposed program is a three-year demonstration that 

will take place in 29 Ohio counties separated into seven geographical regions. This plan will not 

only improve care for the approximately 114,000 eligible beneficiaries who reside in these 

counties, but will also playa critical role in reducing duplicative costs and boosting greater 

efficiency in both programs. Implementation of the program is slated to begin in fall of 20 13, 

pending approval from CMS. 

Of course, in order for any initiative of this kind to prove effective, it must place the individual 

first. That is why we have made every effort to emphasize the need for real person-centered care 

that moves seamlessly across services and care settings alike. 

With that said, Ohio selected five health plans through a competitive process to manage the 

benefit package for dual eligible beneficiaries under the ICDS demonstration. Selected plans 

include Aetna, Buckeye, CareSource, Molina, and United. All five of the plans will utilize a 

variety of care management tools to ensure the proper coordination of services. Ohio's ICDS 

health plans will have the responsibility to comprehensively manage the delivery of services to 

individuals enrolled in both programs. Some of the responsibilities include 

• Arranging for care and services by specialists, hospitals, and providers of L TSS and other 

community-based services and supports; 

• Allocating increased resources to primary and preventive services in order to reduce 

utilization of more costly benefits, including institutional services; 

• Covering all administrative processes, including consumer engagement, outreach and 

educational functions, grievances, and appeals; 

• Coordinating service plan development and delivery; 

• Working cooperatively with a financial management services (FMS) vendor and 

consumers in cases involving self directed care; 
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• Using a person-centered care coordination model that promotes an individual's ability to 

live independently and which includes the individual in the development of their care 

plan; and 

• Utilizing a payment structure that blends Medicare and Medicaid funding and mitigates 

the conflicting incentives that exist between Medicare and Medicaid. 

A series of enrollee protections have also been included to ensure that high standards for care are 

maintained on a consistent basis. With at least two plans in all regions, beneficiaries will have 

the power to choose what avenue of care best fits their needs. Eligible individuals also reserve 

the ability to opt out ofthe Medicare portion of the initiative if they so choose. ICDS plan 

member advisory groups will also be established and a unified grievance and appeal process will 

be implemented in order to further assure individuals that their needs and concerns are being 

heard. Finally, strong safeguards will be put into action to ensure quality management and proper 

oversight over all aspects of this initiative. 

However, the number one protection for individuals in the program is that they are guaranteed 

continuity of care for one year with all providers, except for assisted living and nursing facility 

providers where they are guaranteed three years. Providers have also been protected from rate 

reductions from the Medicaid rates for those same periods. 

The power of choice for beneficiaries is a common theme throughout our proposal, and that is no 

different in the enrollment stage. Individuals will have opportunities to make choices during the 

process, such as consulting over the phone with an enrollment contractor, during regional 

education and enrollment forums, or through one-on-one in-person enrollment counseling. 

All individuals who enroll in the demonstration will be provided with a care manager. Through 

the use of an identification strategy, the ICDS plan will prioritize the order in which individuals 

will receive a comprehensive health assessment. Comprehensive assessments will include an 

evaluation of an individual's medical, behavioral, social, and long-term care needs. The Office 

of Medical Assistance will also prescribe a minimum contact schedule to assess risk acuity and 

stratification levels. 

Of course, one size certainly does not fit all when it comes to health care. That is why every 

enrollee will be provided with an individualized, integrated care plan based on the results of their 

comprehensive assessment. Quality assurance will continue throughout the time of care as plans 

will be required to complete evaluations of the impact and effectiveness that their care 

management model has on the health outcomes and consumer satisfaction of our beneficiaries. 

The results of these evaluations will be integrated into the plans' continuous quality improve 

programs. 

Quality will be further assured through the utilization of national measures used by all 

demonstration projects. Ohio-specific measures focused on transition, diversion and balance will 

also be derived and used, in addition to standard measures traditionally associated with Home 

and Community-Based Services. 
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It is important to note that Ohio has engaged with stakeholders and advocates throughout the 

design and development phases of this demonstration project. In order to ensure success and 

maintain a truly collaborative process, we will continue reaching out to providers, advocates, and 

individuals throughout the implementation and operational phases of the project. 

Thank you again Chairman Baucus, Ranking Member Hatch, and members of the committee for 

the opportunity to explain Ohio's ongoing pursuit of an Integrated Care Delivery System for 

Medicare-Medicaid eligible individuals. 
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• In tenns of the average length of stay in a skilled nursing facility, maximum 

number of Medicare-financed post-acute care days is 100. At one point during 

the hearing a witness stated that the average length of a Medicare post-acute care 

stay was 100 days. This is incorrect. As noted above, the maximum number of 

Medicare-covered post-acute care days is 100. Research indicates that the 

number average number of Medicare-covered post-acute care days in Medicare 

fee-for-service is 27 days.' AHCAINCAL members indicate that in Medicare 

Advantage average lengths of stay are lower than in Medicare fee-for-service. 

However, the outcomes of shorter lengths of stay are as yet unclear. For example, 

research has just begun to explore the implications of shorter average lengths of 

stay and preventable re-hospitalizations. 

• Additionally, nursing patients and residents may leave a nursing facility, be 

readmitted to a hospital as inpatients and, after a three-day stay, return to a 

nursing facility which then may bill Medicare for a Medicare-financed post-acute 

care stay. Medicare rates are higher than Medicaid rates. Despite CMS official's 

statement that there is no evidence that nursing homes are engaged in gaming the 

system by prompting a hospital to nursing facility to hospital revolving door 

method, discussion ensued that implies that gaming may be occurring. We 

strongly disagree with such a line ofthinking. To suggest skilled nursing center 

providers are gaming the system in order to maximize Medicare reimbursements 

is false and fails to appreciate the deep-rooted challenges of caring for such a 

medically-frail and needy population. First, there is no question that MedicareMedicaid eligibles are a cost-driver in today's system. Second, as noted by the 

CMS official, there is no evidence that such gaming is occurring. Third, because 

of the new Affordable Care Act hospital penalties for preventable readmissions, 

hospitals have powerful incentives not to re-admit nursing facility patients as 

inpatients. Instead, it appears they are being taken to emergency rooms or placed 

in hospitals for observation stays (see above). In this scenario, Medicare 

financing for a subsequent Medicare-financed post-acute care stay is not be 

available. Fourth, if a patient already in a Medicare-financed post-acute care stay 

is re-admitted, a new Medicare stay docs not ensue, rather the current post-acute 

care simply continues. Finally, AHCAINCAL has initiated a major quality 

initiative designed in partnership with CMS. A key measure in our quality 

initiative is "safely reducing hospital readmissions." Our target is that by March 

2015 we will reduce the number of hospital readmissions within 30days during a 

skilled nursing center stay by 15 percent. More infonnation about our quality 

initiative may be found on our website: www.ahcancal.org. 

• During a discussion about rebalancing efforts, a number of comments were made 

by CMS officials about the merits of horne and community-based services 

(HCBS) over facility-based services. AHCAINCAL fully supports choice and the 

full array of long term services and supports. However, to characterize HCBS as 

I MedPAC. June 2012 Report to Congress. 
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less costly to public payers and more beneficial to HCBS program participants 

presents an incomplete picture. nursing centers appear to playa key role in 

delivering care which better prevents avoidable hospitalizations than HCBS 

programs for certain populations. Recent research shows that HCBS avoidable 

hospitalization rates are two times higher than for the general Medicaid 

population.2 While the Medicaid data used dates back to 2005, the authors note 

that little has changed in HCBS program design since that year and they 

hypothesize the trends remain true. The researchers subdivided the study 

population into four categories: a) persons with intellectual and developmental 

disabilities (lD/DD); b) younger persons with disabilities but not lD/DD; c) older 

adults age 65 and older; and d) other HCBS users who did not fall into any of the 

preceding categories. Of the four subpopulations, older adults using HCBS had 

the highest rates of avoidable hospitalizations.3 Additionally, a CMScommissioned study found that HCBS participants with multiple chronic 

conditions and who are Medicare-Medicaid eligible had twice the avoidable 

hospitalization rates than long-stay nursing home residents.4 AHCAINCAL 

applauds state and federal efforts to expand beneficiary choice but also urges state 

and federal government to closely examine the quality of services and supports 

delivered in HCBS settings. 

Section n. Ongoing Concerns with the Medicare-Medicaid Financial Alignment 

Effort 

On June 6, 2012, AHCAINCAL transmitted a letter to the CMS Medicare-Medicaid 

Coordination Office (MMCO) conveying our concerns and offering possible avenues of 

addressing such challenges. Subsequently, MMCO staff have met with AHCAINCAL 

staff twice and addressed in full or in part several of our concerns. We greatly have 

enjoyed their willingness to engage in an open dialogue. However, a number remain 

outstanding. Below, we provide an overview of our remaining concerns. Many of these 

items are echoed by others in the health care community. 

1. Demonstrations projects should not enroll all or the vast majority of any 

population. The Medicare-Medicaid Financial Alignment Initiative is 

characterized as a demonstration and will use demonstration authorities -

either included in the Affordable Care Act or long-standing Medicaid 

demonstration authority. However, many states have proposed enrolling all or 

the vast majority of their Medicare-Medicaid eligible population in untested 

2 R. Tamara Konetzka, Sarita L. Karon, and D.E.B. Potter. Users Of Medicaid Home And CommunityBased Services Are Especially Vulnerable To Costly Avoidable Hospital Admissions. Health Affairs, 31, 

NO.6 (2012): 1167-1175 

3 Fuller-Thomson E, Yu B, Nuru-Jeter A, et al. Basic ADL disability and functional limitation rates among 

older Americans from 2000-2005: the end of the decline? J Gerontol A Bioi Sci Med Sci. 2009;64:1333-

1336. 

4 Walsh, E. Ph.D. (August 2010) Cost Drivers for Dually Eligible Beneficiaries: Potentially Avoidable 

Hospitalizations from Nursing home, Skilled Nursing home, and Home and Community-Based Services 

Waiver Programs. Prepared for the Centers for Medicare and Medicaid Services. 
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programs operated by plans with little or no experience with the needs of this 

fragile, high-need population. Furthermore, the majority of these plans have 

very little experience with long tenn services and supports which are 

inherently different from acute care services. Long tenn services and supports 

provide foster independence and community connection. Acute care services 

are intended to be restorative and have far more defined outcomes than long 

tenn services and supports. Furthennore, the Kaiser Fanlily Foundation 

releascd an analysis of research on previous efforts (capitated and managed 

fee-for-service) aimed at reducing costs associated with full duals. The 

analysis indicates that virtually 1I0ile of the earlier e.fforts produced 

projected savillgs alld raises 1I0tabie cOllcem about the likelihood of the 

existillg Fillancial Alignmellt Illitiative to produce projected savillgs. 5 The 

analysis goes on to highlight specific action steps likely necessary to make 

such savings achievable. AHCAINCAL strongly believes that CMS should 

limit enrollment by states to a small percentage of the Medicare-Medicaid 

population and only allow expansion when certain benchmarks are met (sce 

below). 

2. Consumer protections should be central to any approach. CMS has 

worked with the states to make a number of improvements to the 

demonstration proposals. For example, in the three MOUs, CMS has required 

states to provide extensive notice to potential enrollees before passively or 

auto-enrolling them into the demonstration. However, a number of concerns 

remain. AHCAINCAL believes that CMS should require: a) tested and 

streamlined processes for appealing denial of services that are consumer 

friendly; b) mechanisms to ensure that federal-state contracts are being 

followed; and c) states should be required to develop a Medicare-Medicaid 

Ombudsman Office as part of the demonstration possibly co-located in the 

State Health Insurance Program (SHIP) entity. Already, the Department of 

Health and Human Services (DHHS) is offering Aging and Disability 

Resource Center (ADRC) grants aimed at expanding ADRC capacity to 

support Medicare-Medicaid eligible considering enrollment in an integration 

program. AHCAINCAL strongly believes DHHS should build on this effort 

by requiring states to implement and operate a Medicare-Medicaid 

Ombudsman Office. 

3. Use of shared savings. The three MOUs indicate that states may use the 

shared savings as they see fit. There appears to be no requirement that such 

funds be reinvested in services or to enhance quality. AHCAINCAL 

suggestion that a percentage of savings should be used to improve access to 

services and enhance quality. 

5 Brown, R. and Mann, David. Best Bets for Reducing Medicare Costs for Dual Eligible Beneficiaries: 

Assessing the Evidence. Mathematica Policy Research. October 2012. 
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4. State readiness for expansion or implementation. Only about four percent 

of older adults are enrolled in Medicaid managed care. 6 And, outside of a 

handful of states, the managed care marketplace has limited long term services 

and supports (LTSS) experience. The majority of states pursuing integration 

demonstrations have little to no experience with enrolling older adults in 

Medicaid managed care plans. Furthermore, Medicaid managed care plans 

have very limited experience with L TSS, particularly among nursing homes. 

As stated during the hearing, the states and CMS are conducting readiness 

reviews of the plans. However, CMS is not conducting a readiness review of 

the states implementing the capitated, risk-based model. Based on the single 

managed fee-for-service (MFFS) approval, it appears that CMS will be 

conducting a readiness review of Washington State. However, the scope of 

this review is unclear. AHCAINCAL believes that for such complex 

undertakings, regardless of whether a state is using the MFFS or capitated, 

risk-based approach, that CMS should conduct a readiness review of the state. 

5. The appropriateness of Medicaid and Medicare capitation rates appears 

unclear. Research on Medicare and Medicaid capitation rate appropriateness 

appears to be very mixed and raises concerns. The recently released Ohio 

MOU appears to have some additional protections, such as the Minimum 

Medical Loss Ratio (MMLR). However, three examples in states with 

considerable Medicare-Medicaid experience are particularly troubling: 

• Recently, CMS conducted a rigorous review of the state of Minnesota's 

integrated Minnesota Senior Health Options programs, one the longest 

standing Medicare-Medicaid integration arrangements. The investigation 

was launched because a plan voluntary repaid the state $30 million-plus 

because they were overpaid using the state's capitation rate setting 

methodology. 

• Additionally, the Commonwealth of Massachusetts Office of the Inspector 

General released a report indicating the Medicaid managed care was 

paying, hospitals for example, over a 100% offee-for-service rates. 

• Third, Wisconsin commissioned its Legislative Audit Bureau (LAB) to 

conduct a study in 2010 to determine the adequacy of its MLTSS rates. 

The LAB analyzed MCOs' financial statements and spending on services 

and administration, and determined that rates based on the experiences of 

pilot counties were insufficient for many of the newer MCOs because the 

participants served by the newer MCOs were generally more costly. Eight 

ofthe nine MCOs had operating deficits in 2009, and three of nine had 

operating deficits in 2010. The report advised Wisconsin to provide newer 

MCOs with up to five years of additional payments for risk-sharing, as 

6 MACPAC (June 2011) Report to Congress: The Evolution of Managed Care in Medicaid. 
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well as making other adjustments to capitated payments to ensure MCOs' 

financial stability. 

• As per a provision in the Children's Health Insurance Program 

Reauthorization Act of2009 (CHIPRA), the General Accountability 

Office was directed to conduct an analysis of CMS' oversight of state 

managed care capitation rate setting. In 2010, GAO found notable 

problems with CMS' oversight and states' application of the managed care 

rules for capitated rate setting. Currently, Congressional leaders again are 

raising serious questions about CMS' capacity to ensure adequate 

oversight and have alleged that states are padding capitation rates to 

increase federal matching. 

• Finally, Congress and MedP AC both have repeated expressed concern 

about Medicare Advantage costs far exceeding Medicare fee-for-service 

levels. 

AHCAINCAL believes that considerable work should be invested to ensure 

accurate rate setting that will cover beneficiary needs, be cost effective and ensure 

network adequacy. Again, such an endeavor would best be achieved by requiring 

states to slowly phase in the demonstrations. 

6. The demonstrations should ensure adequate services without unnecessary 

utilization controls or deeper cuts to fragile provider networks still 

struggling with recession recovery. Following the most serious economic 

conditions since the Great Depression, state fiscal conditions improved in 

2012 and are projected to continue to improve in 2013. However, such 

improvements should be considered in the context of the lingering recovery 

from the recession. Recent research indicates that state fiscal year 2013 

general fund revenues are projected to increase by $27.8 billion while 

additional spending is projected to increase by only $14.6 billion or 2.2 

percent.? Despite such improvements, state budgetary recovery remains 

uncertain and mixed. Twenty-three states still are projecting fiscal 2013 

general fund revenues below fiscal 2008 levels and, while improved over 

2012, the project 2013 state budget cap is $55 billion. Additionally, the 

impact of the recession and resulting budget gaps are unprecedented in 

modem history and states already have exhausted most Medicaid cost 

containment efforts. AHCAINCAL strongly believes that Congress should 

ensure the CMS follows through with its promise of focusing on quality and 

access first through ongoing oversight including General Accountability 

Office studies on quality and access to services among demonstration 

participants. 

7 The Fiscal Survey of States: £\ Report by the National Governors Association and the National Association 

of State Budget Officers. Spring 2012. 
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7. CMS and the states must ensure states have contingency arrangements 

for plan failure or withdrawal. Again, this concern relates to our earlier 

question about state and plan readiness to take on large scale implementation. 

Such plan failure or withdrawal could have disastrous impacts on beneficiaries 

and increase costs as states and the federal government scramble to secure 

providers and coordinate services for people and their families. If capitated 

rates are inadequate andlor plans operate at deficits for an extended period, 

they may exit the managed care program or shut down. There have been 

several instances of such "plan failure" in the Medicaid managed acute care 

market. However, there is limited research concerning failure ofMLTSS 

plans. The authors of one study found that non-profit and provider-sponsored 

plans were less likely to exit. They hypothesized that sponsors of these plans 

may have a sense of social mission or obligation to serve the Medicaid 

population, making them less likely to exit.; However, in many of these 

expansions, the non-profit plans are paltnering with large commercial plans 

which may not have such a mission focus and might pull out. Finally, yet 

another study found that if states required Medicaid beneficiaries with 

disabilities to enroll in managed care, MCOs were more likely to exit, 

probably because the MCOs found, or feared, that the capitated rates did not 

reflect the much higher cost ofthis population .. iI AHCAINCAL believes that 

CMS must require a state readiness review on the state strategy to address 

plan failure. 

8. CMS and States must ensure plans reimburse providers in a timely 

manner that ensures access and overall network operational and financial 

stability. Since 2007, many Medicaid providers have not received rate 

increases while, at the same time, a notable number have experienced 

Medicaid rate cuts. We are concerned about the potential negative 

implications for people's access to services and plan capacity to negotiate 

rates that will be sufficient to attract providers. Many providers are concerned 

that the demonstrations will focus more on savings targets rather than quality 

and care coordination. And, the likely target for savings will be provider 

rates. Further rate reductions could impact access and quality. Blended 

capitation at the plan level coupled with plan negotiated rates raises serious 

questions about how providers will be reimbursed particularly where 

providers have considerably less experience negotiating with plans much less 

on blended payment rates. Of note, we are especially concerned about 

Medicare Advantage rates and providers' capacity to negotiate rates that are 

sufficient to cover costs as well as bad debt. Finally, sustained cash flow is a 

key concern for L TSS providers which are almost entirely reliant upon 
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Medicare and Mcdicaid. In Medicaid managed care states and with MA-PDs, 

providers already struggle with eligibility vcrification issues, prior 

authorizations, and timely paymcnt. AHCAINCAL urges consideration of 

inclusion of prompt pay requirements in the three-way contract arrangements. 

We would be pleascd to discuss our comments or other Committee member concerns and 

questions. Inquiries should be directed to Michael Cheek, Vice President for Medicaid & 

Long-Tenn Care Policy. He may be reached at 202-454-1294 or mcheek@ahca.org. 

i Long, Sharon and Alshadye Yemane. "Final Report: Commercial Plans in Medicaid Managed 

Care: Understanding Who Stays and Who Leaves in a Changing Market." Centers for Medicare 

and Medicaid Services, September, 2004. hltp:llwww.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/Reports/Downloads/Long2.pdf 

ii Kaiser Family Foundation (KFF). "Medicaid Managed Care: Key Data, Trends, and Issues." February 

2012. 
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National Committee to Preserve Medicare 

and Social Security 

National Senior Citizens Law Center 

1444 Eye Street, NW, Suite 1100 

10 G Street, NE, Suite 600 Washington, DC 20005 

Washington, DC 20002 

NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE 

And 

NATIONAL SENIOR CITIZENS LAW CENTER 

Statement for the Record 

United States Senate Committee on Finance 

Improving Care for Dually-Eligible Beneficiaries: A Progress Update 

Thursday, December 13,2012 

The National Committee to Preserve Social Security and Medicare (NCPSSM) and the National Senior 

Citizens Law Center (NSCLC) thank the members of the U.S. Senate Finance Committee for holding a hearing 

to discuss progress of Medicare and Medicaid coordination for dual eligible individuals and the state 

demonstrations. As beneficiary advocates, we support the goals of the Medicare-Medicaid Coordination Office 

(MMCO) and its efforts to improve the health care provided to dual eligible individuals. We believe that the 

demonstrations provide an opportunity to design innovative, person-centered systems of care and hope that 

the demonstrations will fulfill their promise. 

Advocates representing dual eligible individuals have met quarterly with the MMCO to share recommendations 

and concerns about the demonstrations. Most recently, we met with the MMCO regarding a letter 103 national 

and state aging and disability organizations sent to the Center for Medicare and Medicaid Services (CMS) 

requesting each demonstration include a funded, independent ombudsman program. This letter is available at 

http://dualsdemoadvocacy.org/wp-contentiuploads/2012/02/Dual-Eligible-Stakeholder-Reguest-forOmbudsmanmanman-in-State-Demonstrations-102312.pdf. 

In brief, we believe that each Memorandum of Understanding must include a detailed written plan for 

establishing and funding an independent ombudsman. Without a plan in writing, we cannot be certain that 

ombudsman programs will be in put into place. Dual eligible consumers, who are generally very sick and frail, 

need an advocate that can assist them in accessing needed services, monitor overall demonstration activity, 

and identify systemic problems in the demonstrations. 

Further, it is critical that the ombudsman is independent from the managed care plan and has sufficient 

financial resources. We believe states should design ombudsman programs appropriate for their needs, and 

we recommend building an ombudsman program that provides: 1) information and assistance in pursuing 

complaints and appeals; 2) negotiation and mediation; 3) case advocacy assistance in interpreting relevant 

law; 4) reporting on patterns of non-compliance by plans as appropriate and 5) individual case advocacy in 

administrative hearings and court proceedings relating to program benefits. We are encouraged by 

conversations with MMCO that the office supports the concept of an ombudsman. 

In addition to the ombudsman request, advocacy organizations representing dual eligible individuals sent the 

MMCO a list of issues and recommendations that require attention for the success of the demonstrations. This 

document, signed by 33 national aging and disability organizations, is available at 

http://www.ncpssm.org/Portals/O/pdf/dual-eligible-demonstrations.pdf. 

We thank you for your interest in the state demonstrations for dual eligible individuals, and the opportunity to 

submit a statement to the record on this important topic. For additional information or questions, please 

contact Fay Gordon, fgordon@nsclc.org, or Brenda Sulick, sulickb@ncpssm.org. 
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0K9 C NATIONAL (.'. . .. 

DISABILITY RIGHTS '/ / 

NETWORK 

Protection & Advocacy for Individuals with Disabilities / 

Senate Finance Committee 

Hearing on "Improving Care for Dually-Eligible Beneficiaries: A Progress Update" 

December 13, 201210:00 a.m. 

The National Disability Rights Network (NDRN) would like to thank Chairman Baucus, 

Ranking Member Hatch, and the Senate Finance Committee for holding this important 

and timely hearing to assess the progress on improving care for dual eligible 

beneficiaries. We appreciate the opportunity to draw attention to the continuing needs 

of dual eligibles and how the Protection and Advocacy Network could be used to 

address the problems currently being encountered by people with disabilities navigating 

the two systems, ensuring dual eligibles are receiving the services they are entitled to, 

and helping them negotiate divergent appeals processes, NDRN and the network of 

Protection and Advocacy Systems have been involved for years with advocating for the 

health care rights of people with disabilities and monitoring the accessibility of the 

health care system. Although the United States has made progress in care for dual 

eligible beneficiaries, there is still much work to be done. 

Who Are NDRN and the Protection and Advocacy Systems? 

NDRN is the nonprofit membership organization for the federally mandated Protection 

and Advocacy (P&A) systems for individuals with disabilities. The P&As were 

established by the United States Congress through eight separate statutes to protect 

the rights of people with disabilities and their families through legal support, advocacy, 

referral, and education. P&As are in all 50 states, the District of Columbia, Puerto Rico, 

and the U.S. Territories (American Samoa, Guam, Northern Mariana Islands, and the 

US Virgin Islands), and there is a P&A affiliated with the Native American Consortium 

which includes the Hopi, Navaho and Piute Nations in the Four Comer region of the 

Southwest. Collectively, the P&A Network is the largest provider of legally based 

advocacy services to people with disabilities in the United States. 

Medicaid Mandatory Managed Care Legal Problems and Issues 

NDRN and the P&As believe that the P&A Network is uniquely situated to address the 

legal issues and problems that have arisen around dual eligibles, and especially 

through the increased use of Medicaid managed care. We believe the P&As are well 

situated because first P&As are located in every state and territory of the United States 

meaning that a P&A agency is in every place a person can access Medicaid services, 

Second, the P&As continually address issues that arise in both the Medicare and 

Medicaid programs, which means unlike other organizations, the P&As have the unique 

internal knowledge to address problems and issues that can and do arise as a person 

accesses both systems. Third, in addition to the work the P&As do to address 

900 SECOND STREET NE, SUITE 211 • WASHINGTON, DC 20002-3560 

TEL: 202.408.9514' FAX: 202.408.9520' TTY: 202.408.9521 

WEBSITE: WWW.NDRN.ORG • E-MAIL: INFO@NDRN.ORG 
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problems with state and federal health care systems, P&As also work to address issues 

with private health insurance meaning that the P&As can advocate for the rights of a 

person throughout the entire health care delivery system. Fourth, P&A agencies 

already exist, so any additional funding to help perform a task automatically goes into 

the service that will be provided rather than into starting a program from scratch and 

building from the ground up. The following examples show ongoing situations the P&As 

have been, and will be in the future, well situated to address: 

1. PROBLEM: A Managed Care Organization (MCO) has little experience 

providing long-term care and lacks access to specialty providers in the MCO 

network. 

SOLUTIONS: P&A agencies work to educate MCOs and state authorities on long-term 

care and specialty provider issues in their state or territory, as well as helping develop 

contracts to ensure enrollment procedures and plans allow for the: 

• Right to opt-out of a managed care plan for failure to meet long-term care needs 

as determined by the person with a disability. The plan must have the burden of 

proving they can meet needs of individual, and the right to opt out must be 

indefinite not just in initial enrollment phase. 

• Right to petition the plan for access to specific specialty providers or suppliers 

outside of the managed care plan's network (assuming the benefits at issue are 

covered by Medicaid). 

2. PROBLEM: The facilities and equipment of an MCO provider are inaccessible. 

SOLUTION: P&As help MCOs ensure the accessibility of facilities and equipment, but 

can also enforce Americans with Disabilities Act requirements governing medical offices 

and equipment if necessary. Additionally, P&As work to ensure access to sign 

language interpreters to help individuals with hearing loss access health services. 

Finally, P&A agencies work to ensure plans provide adequate due process for people to 

appeal adverse decisions. 

3. PROBLEM: MCO providers have financial and programmatic disincentives for 

providing extra time as may be required for individuals with intellectual or 

developmental disabilities. 

SOLUTION: P&As work with MCO's to eliminate financial and programmatic 

disincentives to help ensure that people with intellectual and developmental disabilities 

have access to health care services in a manner that they can fully participate. 

4. PROBLEM: Person-Centered Service Plans must include important non-medical 

issues to address health issues that MCOs are not familiar with prescribing and 

providers are not in network, for example: 

• Pre-vocational services; 
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• Transportation related to the provision of covered services; 

• Home modifications for accessible and safe living, and 

• Respite care services 

SOLUTION: P&As help obtain needed coverage for these services through the 

rehabilitative and habilitative service options and through Medicaid waivers. P&As can 

also help ensure plans have adequate due process rights to safeguard these important 

services. 

5. PROBLEM: Quality measurements used to evaluate the MCOs are not relevant, 

nor capture, issues related to long-term care. Unfortunately, many MCO quality 

measurements look at issues like number of heart attacks and diabetic services, 

but don't often measure quality related to mental illness or intellectual or 

developmental disabilities services, especially long-term care services. 

SOLUTION: P&As help bring together agencies that can design these measures and 

identify legal requirements to develop these specific quality measures important to 

people with disabilities. 

6. PROBLEM: A lack of federal or state monitoring of MCOs to ensure 

enforcement of legal requirements impacting people with disabilities, as well as 

nonexistent or poor due process procedures: 

SOLUTION: P&As are familiar with all the licensing agencies that need to work together 

to monitor, assess, and report on the transition and implementation requirements. 

P&As ensure adequate accessible grievance and appeal procedures to make 

challenges to health plan decisions timely, meaningful, and easy to pursue for people 

with disabilities. 

Recommendations to Continue to Improve Care for Dual Eligibles 

While great strides have been made on improving care for dual eligibles, much work still 

remains. Specifically, NDRN and the P&A Network make the following 

recommendations: 

1. When proposing or approving proposals to address the health care 

needs of dual eligibles, federal and state authorities need to ensure 

access to accessible facilities and services for people with disabilities. 

If a person with a disability is unable to fully access a health care provider's 

facilities or services, then they will be unable to receive needed medical care, 

or the care they receive will not address the medical needs of the individual 

because some aspects of the care are inaccessible or not understood. All 

plans or demonstrations to address dual eligibles need to include accessibility 

provisions to ensure that people with disabilities are receiving the health care 

they are entitled. 
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2. When proposing or approving proposals to address the health care 

needs of dual eligibles, federal and state authorities need to ensure 

appropriate quality measures of care are included to evaluate the care 

of people with disabilities. 

P&As have encountered new systems to serve dual eligibles that do not 

include proper quality measurement requirements that will reflect the level of 

care people with disabilities are receiving. Without proper measures of care, 

oversight agencies cannot adequately measure the level of care that people 

with disabilities are receiving, which means in many cases that people with 

disabilities are not receiving the care that they deserve or are entitled to 

receive. All plans or demonstrations to address dual eligibles must include 

the design and use of proper measurements of care for people with 

disabilities at the beginning of the process to ensure that the health care 

needs of people with disabilities are being met by these demonstrations and 

proposals. 

3. When proposing or approving proposals to address the health care 

needs of dual eligibles, federal and state authorities need to ensure 

adequate due process procedures are in place for individuals to appeal 

adverse decisions. In addition, consideration needs to be given to 

better coordination of divergent appeals processes faced by dual 

eligibles. 

Without the inclusion of adequate due process provisions, dual eligibles face 

a confusing array of appeals processes across both programs. Consideration 

needs to be given to creation and coordination of a due process system to 

help ensure the rights of people with disabilities are protected in any appeals 

process. 

4. Specific funding needs to be included in proposals and 

demonstrations regarding dual eligibles to ensure appropriate advocacy 

systems are in place to protect the rights of people with disabilities. 

The ability to serve the health care needs of dual eligibles is complicated by 

the fact that they are eligible for two systems of health care with different 

requirements, including appeals processes. In order to ensure that the 

systems designed to serve dual eligibles are truly helping this population 

receive proper health care services funding needs to be included to allow for 

the provision of advocacy services. NDRN and the P&A Network believe that 

the P&A agencies are uniquely qualified to provide these advocacy services, 

but to ensure that such advocacy services exist in every state and territory 
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