Medicare and Medicaid: Additional Oversight Needed of CMS's Demonstration to Coordinate the Care of Dual-Eligible Beneficiaries
Published: 2015-12-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Medicare and Medicaid programs spent an estimated $300 billion on dual-eligible beneficiaries—those individuals who qualify for both programs—in 2010. These beneficiaries often have complex health needs, increasing the need for care coordination across the two programs. In 2013, CMS began the Financial Alignment Demonstration, with the goal of integrating Medicare and Medicaid services and financing and improving care coordination. Thirteen states are participating.
GAO was asked to examine care coordination under the demonstration. GAO examined (1) how integrated care organizations—which are health plans or other entities—are implementing care coordination and (2) what, if any, challenges organizations have encountered in implementing care coordination and the extent to which CMS oversees these care coordination activities. GAO interviewed officials from CMS and, during site visits to a nongeneralizable sample of the first five states to implement the demonstration, interviewed state officials, organizations, advocacy groups, and providers. GAO also reviewed CMS guidance outlining CMS's oversight role and the measures it uses to monitor the demonstration.
section_title: What GAO Found
paragraphs: Due to the flexibility that states have in designing their Financial Alignment Demonstrations, the integrated care organizations that GAO interviewed in California, Illinois, Massachusetts, Virginia, and Washington implemented care coordination for dual-eligible Medicare and Medicaid beneficiaries in a variety of ways. For example, these organizations assigned care coordinators to beneficiaries using different approaches, such as assigning them by geographic proximity to the beneficiary or to the beneficiary's primary care provider. Care coordinators also used a range of interactions with beneficiaries in order to coordinate care, including by mail, e-mail, telephone, or in person.
The organizations GAO interviewed described facing challenges that affected their ability to coordinate care, such as difficulties in locating beneficiaries. Specifically, organizations noted that certain characteristics of dual-eligible beneficiaries, such as high levels of transience, can make it challenging to coordinate their care—one of the key goals of the demonstration. GAO's interviews with beneficiary advocacy groups and providers raised questions about the extent to which care coordination is actually occurring.
The Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health and Human Services (HHS), collects information that assesses the extent to which care coordination is occurring, but not all of this information is comparable across the states. To inform its oversight, CMS has established a framework of monitoring activities, and one key component of this oversight is the monitoring of core and state-specific measures for each of the two demonstration models that states can implement: (1) the capitated model, where organizations receive a capitated payment to provide integrated care, and (2) the managed fee-for-service (MFFS) model, where states are eligible for retroactive savings resulting from initiatives to integrate care with existing fee-for-service providers. CMS collects different sets of core measures from the capitated and MFFS model states. Two out of 10 core measures in the capitated model provide information on the extent to which care coordination is occurring, while no core measures in the MFFS model examine this area. The states in our review had state-specific measures that explored aspects of care coordination, but they were not comparable across the states or both demonstration models. In addition, CMS added comparable, demonstration-specific questions to the Consumer Assessment of Healthcare Providers and Systems, a survey that CMS requires all organizations for the capitated model, and states for the MFFS model, to complete annually. While the results of the surveys are still forthcoming, information from these questions may be able to provide CMS with important information about whether beneficiaries are meeting with their care coordinators across both models. Federal internal control standards state that monitoring should be designed to help an agency accomplish its goals. Because not all of the information that CMS collects to examine the extent to which care coordination is occurring is comparable, CMS does not fully know whether it has achieved its goal of providing coordinated care to dual-eligible beneficiaries. Establishing additional measures that would allow CMS to obtain these data could help it better understand the reasons why care coordination is or is not occurring and thus help the agency to strengthen the demonstration.
section_title: What GAO Recommends
paragraphs: GAO recommends that CMS develop new comparable measures and align existing measures to strengthen oversight of care coordination. HHS proposed actions that it plans to take in response to GAO's recommendations, as discussed in the report.

section_title: Letter
paragraphs: About 10 million of Medicare’s approximately 50 million beneficiaries are  also eligible for Medicaid, a joint federal-state program that finances  health insurance coverage for certain categories of low-income or  disabled people. Dual-eligible beneficiaries accounted for less than one- fourth of each program’s population but over one-third of each program’s  spending—more than $300 billion—in 2010, the most recent year  available. Dual-eligible beneficiaries are often in poorer health and  require more care compared with other Medicare and Medicaid  beneficiaries. They typically receive their benefits through each program  separately, which can lead to fragmented care because the programs  have different rules for provider reimbursement and benefits and may  have conflicting financial incentives. For example, incentives may exist for  providers to shift beneficiaries from one type of service to another to  increase their payments. These types of program misalignments can  result in unnecessary hospitalizations, which can reduce quality of care  and increase costs. Recently, the federal government, states,  researchers, and advocates have focused increased attention on care  coordination for dual-eligible beneficiaries as a key strategy for improving  the quality of care while simultaneously reducing costs.
Specifically, beginning in 2013, the Department of Health and Human  Services’ (HHS) Centers for Medicare & Medicaid Services (CMS) began  implementing the Financial Alignment Demonstration through its  Medicare-Medicaid Coordination Office, which will integrate Medicare and  Medicaid services and financing and improve care coordination for dual- eligible beneficiaries. Ultimately, CMS believes the Financial Alignment  Demonstration will reduce spending and improve the quality of care for  dual-eligible beneficiaries. The demonstration allows states, through  contracted integrated care organizations, to test models of care that  emphasize care coordination, including care coordinators, health risk  assessments, individualized care plans (ICP), and interdisciplinary care  teams (ICT). CMS is required by law to evaluate the quality of care  furnished under these models. In addition, the Secretary of Health and  Human Services may, through rulemaking, expand the duration and  scope of a model under specified conditions. As of August 2015, CMS  had approved 13 states to participate in the 3-year demonstration, and  the agency estimates that approximately 441,000 beneficiaries are  enrolled.
You asked us to examine care coordination under CMS’s Financial  Alignment Demonstration. Specifically, we examined  1.  how integrated care organizations are implementing care coordination  for beneficiaries in the Financial Alignment Demonstration and  2.  what, if any, challenges the organizations have encountered in  implementing care coordination and the extent to which CMS  oversees these care coordination activities.
To describe how integrated care organizations are implementing care  coordination for beneficiaries in the Financial Alignment Demonstration,  we reviewed CMS guidance. We also selected a nongeneralizable  sample of five states—California, Illinois, Massachusetts, Virginia, and  Washington—and examined their demonstration planning documents. We  selected these states because they were the first five states to begin  enrolling beneficiaries on or before September 1, 2014. Because the  demonstration parameters are complex and involve many requirements,  we focused our review on the four care coordination requirements for the  demonstration, which are specified in CMS and state guidance: (1) a care  coordinator, (2) a health risk assessment, (3) an ICP, and (4) an ICT. We  also interviewed officials from CMS’s Medicare-Medicaid Coordination  Office about the care coordination requirements in CMS guidance and  how these requirements were being implemented by states involved in  the demonstration. We conducted site visits to each state and interviewed  state agency officials; officials from the CMS regional office; staff at  integrated care organizations, including care coordinators; staff from  beneficiary advocacy groups; and primary care providers. We selected 11  integrated care organizations to interview within the five states (2 in  Illinois, Massachusetts, Virginia, and Washington, and 3 in California) by  identifying organizations that had the highest level of enrollment in the  demonstration as of August 2014 (except for Washington, where we used  enrollment data as of February 2015). At most of the organizations in our  review, we also observed ICT meetings conducted by organization staff.  To obtain the perspective of beneficiaries, we asked officials from the five  states to identify one beneficiary advocacy group that was a stakeholder  in developing each state’s demonstration, and we interviewed staff at that  group. In addition, we spoke with seven primary care providers located in  California, Illinois, and Massachusetts about their experiences with the  demonstration. We developed structured interview protocols to gather  consistent information from CMS, the states, integrated care  organizations, beneficiary advocacy groups, and primary care providers  about their perspectives in implementing care coordination in the  demonstration. Our findings are limited to the five states in our review and  are not representative of all states and integrated care organizations  participating in the Financial Alignment Demonstration.
To determine what, if any, challenges the organizations have  encountered in implementing care coordination and the extent to which  CMS oversees these care coordination activities, we interviewed staff at  integrated care organizations located in the five states in our review about  challenges they have encountered. We also interviewed CMS officials  from the Medicare-Medicaid Coordination Office about the agency’s  oversight and monitoring of selected states’ demonstrations. In addition,  we reviewed CMS guidance about the agency’s role and responsibility for  demonstration oversight, as well as CMS guidance describing the  measures that CMS regularly requires organizations and states to report  as part of the agency’s monitoring. We determined whether these  measures assessed the extent to which care coordination is occurring in  the demonstration—that is, whether care coordinators are meeting with  beneficiaries, health risk assessments are being completed, ICPs are  being developed, and ICT meetings are occurring. We compared these  oversight activities to CMS’s goals for the demonstration and the  standards described in Standards for Internal Control in the Federal  Government. We did not evaluate whether the demonstration had  achieved cost savings or improved the quality of care.
We conducted this performance audit from June 2013 to December 2015  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Characteristics of Dual- Eligible Beneficiaries
paragraphs: Dual-eligible beneficiaries are a particularly vulnerable group. In general,  these individuals are among the poorest and sickest beneficiaries  enrolled in Medicare and Medicaid. For example, compared to other  Medicare beneficiaries, they are more likely to be disabled; report poor  health status and limitations in their activities of daily living, such as  bathing and toileting; and have cognitive impairments, mental disorders,  and certain chronic conditions, such as diabetes and pulmonary disease.  Therefore, dual-eligible beneficiaries tend to have higher rates of service  use and consequently, higher spending, compared to other Medicare and  Medicaid beneficiaries. (See fig. 1.)
Although dual-eligible beneficiaries have a higher rate of service use  compared to other Medicare and Medicaid beneficiaries, as a group, they  vary in terms of their need for health care services, reflecting differences  in the prevalence of disabilities and other health conditions. Under  Medicare, dual-eligible beneficiaries have coverage for most acute care  services, such as care provided by physicians or inpatient hospitals, post- acute skilled nursing facility care, and prescription drugs. Under state  Medicaid programs, dual-eligible beneficiaries also have coverage for  long-term nursing facility care and home and community-based services.  These beneficiaries may also qualify for payment of Medicare premiums  and cost sharing. Medicaid is the health care payer of last resort,  meaning that Medicare pays to the extent of its liability before Medicaid  makes any payments. Because dual-eligible beneficiaries receive care  through separate programs with different benefits and payment  processes, they are likely to be treated by many different health care  providers that may not coordinate their care, which can lead to increased  costs and poorer patient outcomes.
section_title: Past Initiatives to Coordinate Care for Dual- Eligible Beneficiaries
paragraphs: Prior to the implementation of the Financial Alignment Demonstration in  2013, the Medicare and Medicaid programs were separately responsible  for covering certain services for most dual-eligible beneficiaries, and there  may not have been an incentive for one program to help control costs in  the other program. As we previously reported, any savings that were  achieved often resulted from services that were largely paid for by  Medicare, such as reductions in the number and length of hospital stays,  and therefore accrued to the Medicare program. Therefore, state  Medicaid programs did not have an incentive to better coordinate care or  reduce spending since they did not benefit from any savings that were  achieved. However, increasingly there have been efforts to try to improve  integration of care between these two programs. For example, one  specific effort to integrate care for dual-eligible beneficiaries was the  establishment of dual-eligible special needs plans (D-SNP) in 2003. D- SNPs are a type of Medicare Advantage plan exclusively for dual-eligible  beneficiaries that provide specialized services targeted to the needs of  their beneficiaries, including a health risk assessment and an ICT for  each enrolled beneficiary. About 1.9 million of the dual-eligible population  was enrolled in D-SNPs in 2014.
section_title: Financial Alignment Demonstration: Design and Implementation, Care Coordination, and Sources of Potential Savings
subsections: section_title: Design and Implementation of the Demonstration
paragraphs: CMS’s goal for the Financial Alignment Demonstration is to integrate  Medicare and Medicaid services and financing and improve care  coordination for beneficiaries, therefore resulting in improved care and  savings to Medicare and Medicaid. CMS gave the states flexibility in  designing their demonstrations because of the different needs of their  target populations, the geographic coverage areas, and the number of  eligible beneficiaries. For example, while Massachusetts chose to limit its  target population to dual-eligible beneficiaries from age 21 through 64,  California, Illinois, and Virginia chose to include all dual-eligible  beneficiaries aged 21 and older as their target populations. CMS required  states to involve dual-eligible beneficiaries and other stakeholders, such  as beneficiary advocacy groups, in the development of their  demonstrations to help design a person-centered system of care.
Before any state’s demonstration becomes operational, CMS oversees a  multistep approval process of the state’s demonstration design. First,  states interested in participating in the demonstration submit proposals to  CMS that provide a description of the demonstration’s design. CMS then  reviews the proposals and works with the states to develop a  memorandum of understanding that further outlines the parameters of the  demonstration, which both the state and CMS sign.
As part of their proposals, states generally opted to test one of two  models—the capitated or managed fee-for-service (MFFS) models.  Under the demonstration’s capitated model, following CMS approval of  the memorandum of understanding, the states work with CMS to select  qualified integrated care organizations to participate in the demonstration.  Then, the state, CMS, and an integrated care organization enter into a  three-way contract, and the integrated care organization receives a  prospective blended capitated payment, which includes both Medicare  and Medicaid payments, to provide coordinated care across both  programs. CMS reduces payment rates to organizations up front each  year based on a predetermined Medicare and Medicaid savings estimate,  with the amount of savings increasing each year, typically from 1 percent  in the first year to 4 percent in the third year of the demonstration. For  example, in Massachusetts, contracted managed care health plans  provide care coordination services and integrate care between the two  programs and receive one combined payment from both Medicare and  Medicaid for each enrollee. For states opting for the MFFS model,  following CMS approval of the memorandum of understanding, the state  and CMS enter into an agreement by which providers continue to receive  fee-for-service reimbursement for both Medicare and Medicaid services.  The state is then eligible for a portion of any retroactive savings resulting  from state initiatives designed to improve quality and reduce spending for  dual-eligible beneficiaries. One state, Washington, is using Medicaid  health home agencies to coordinate Medicare and Medicaid services  among existing fee-for-service providers for dual-eligible beneficiaries.
The organizations in the capitated model, and the states in the MFFS  model, then undergo a CMS review to ensure they are prepared to begin  enrolling dual-eligible beneficiaries. Once they have passed CMS’s  review, they can begin enrolling beneficiaries. In general, under the  capitated model, eligible beneficiaries—those dual-eligible beneficiaries  who meet the state’s age, geographic residency, and other requirements  for the demonstration—can enroll voluntarily into the demonstration and  choose a participating integrated care organization. Dual-eligible  beneficiaries who choose not to enroll voluntarily can be assigned by the  state Medicaid agency to a participating organization, in a process known  as “passive enrollment.” Once a beneficiary is enrolled into the  demonstration, the state will send the beneficiary’s contact information to  the relevant integrated care organization. The state or CMS may also  provide Medicaid or Medicare claims data, medical history,  hospitalizations, and pharmacy use for the beneficiaries. The organization  then typically assigns a care coordinator and begins coordinating the  beneficiary’s care. In the MFFS model, beneficiaries are automatically  enrolled in the demonstration, and following enrollment, the care  coordinator will perform outreach to the beneficiary and give the  beneficiary the option to elect to receive care coordination services.  Under both models, beneficiaries can opt out of the demonstration at any  time.
Implementation of the Financial Alignment Demonstration began in July  2013 when the first state, Washington, began enrolling beneficiaries.  Since then, CMS has approved 12 other state demonstrations and all but  one of these states has begun enrolling beneficiaries. Two states— Connecticut and New York—had proposals pending approval from CMS  as of September 2015. (See fig. 2 for a demonstration map.) The  agency is no longer accepting new proposals from states.
One of the key goals of the demonstration is to improve care coordination  for beneficiaries using a person-centered care delivery model based on  the preferences and needs of the beneficiary, which CMS anticipates will  improve the quality of care and reduce costs. CMS requires states and  organizations participating in the demonstration to incorporate a care  coordinator role, a health risk assessment, an ICP, and an ICT into their  care delivery model for the demonstration. (See table 1.)
Under the demonstration, any savings will be shared equally by Medicare  and Medicaid, regardless of whether the savings were achieved primarily  by Medicare or Medicaid. Although CMS projects that approximately 60 to  70 percent of savings from the demonstration will come from reductions in  costly Medicare-covered services, such as fewer hospital admissions  (including readmissions), and approximately 1 to 5 percent of savings will  come from fewer emergency room visits, the agency requires that as part  of a more integrated approach, both the Medicare and Medicaid programs  adjust their payment rates to plans based on aggregate savings  percentages.
section_title: Organizations Participating in CMS’s Financial Alignment Demonstration Implemented Care Coordination in a Variety of Ways
paragraphs: Organizations in the five states in our review used state- and CMS- required care coordinators, health risk assessments, ICPs, and ICTs to  coordinate care. Due to the flexibility states have in designing these  elements in their demonstrations, implementation varied among the  organizations in these five states.
subsections: section_title: Care Coordinator
paragraphs: Staff from organizations in our review reported different ways that they  assigned care coordinators to beneficiaries. Some organizations assigned  care coordinators on the basis of geographic proximity to the beneficiary  or the beneficiary’s primary care provider. Others assigned care  coordinators a mix of low-, moderate-, and high-risk beneficiaries, or  assigned care coordinators based on the coordinator’s qualifications and  areas of expertise.
Care coordinators varied in their qualifications and backgrounds, and in  the types of care they coordinated. Organization staff said care  coordinators had degrees or licensures in fields such as nursing, social  work, or behavioral health. Staff from the organizations said they hired  care coordinators with backgrounds in care management and  assessment, and who were comfortable reaching out to and engaging  with beneficiaries. In addition, some organizations had separate care  coordinators assigned to handle medical needs versus behavioral health  needs, but others had care coordinators who were responsible for  coordinating care across medical, behavioral, and social realms.
Care coordinators for the organizations in our review reported interacting  with beneficiaries, using a range of methods and in a variety of settings,  to conduct health risk assessments, develop ICPs, and lead ICTs. Care  coordinators we spoke with reported interacting with beneficiaries by mail,  e-mail, telephone, and in person, but most care coordinators said they  interacted with beneficiaries by telephone or in person. Some care  coordinators told us they interacted by telephone regardless of a  beneficiary’s risk level, while others used a mix of telephone and in  person methods depending on the beneficiary’s risk level and needs.  Some care coordinators in the latter group used in person interactions for  higher-risk beneficiaries and telephone interactions for low-risk  beneficiaries. Locations of the in-person visits also differed; while in- person visits were often conducted in a beneficiary’s home, care  coordinators described meeting beneficiaries in other settings as well,  such as parks, libraries, homeless shelters, clothing drives, and provider’s  offices.
section_title: Health Risk Assessment
paragraphs: The organizations in the five states we reviewed differed in how they  conducted the health risk assessment. For example, they differed in how  they identified high- and low-risk beneficiaries, a process that typically  occurs when the beneficiary is enrolled in the demonstration, but before  the health risk assessment is conducted. Staff at some of these  organizations said they confirm or adjust the initial risk category assigned  by the state through the health risk assessment process. Conversely,  staff at organizations in states that do not assign an initial risk category  said they begin their health risk assessment process by identifying high-  and low-risk beneficiaries through an initial health screening and then  administering the health risk assessment.
Additionally, based on our interviews, we found that organizations in the  five states varied in their methods for conducting the assessment. Not all  of these organizations used their own staff and instead contracted with a  vendor to conduct the assessments. For the organizations conducting  their own assessments, the staff responsible also differed depending on  the organization. For example, some organizations had the beneficiary’s  care coordinator conduct the assessment, while others used other types  of staff, such as assessment coordinators.
The organizations we reviewed also used different health risk assessment  tools. For example, the Illinois demonstration required organizations to  use a tool that must assess the beneficiary’s medical, psycho-social,  functional and cognitive needs, and medical and behavioral health, while  the Massachusetts demonstration required organizations to use a tool  that not only assesses these needs but also assesses needs related to  housing, employment status, and food security. Staff at some of these  organizations also said they used a supplemental assessment in addition  to the health risk assessment to further identify the needs of their  beneficiaries.
Based on our interviews, we found that the ICP templates varied by  organization in the five states and therefore differed in length, complexity,  and focus. Some organizations used ICP templates from the state and  others developed their own templates. The ICPs varied in length, from  shorter plans containing three to five goals to longer plans containing  many goals. Staff who used the shorter ICPs explained they did so to  avoid losing the beneficiary’s interest. The complexity of the ICP also  depended on the organization. For example, staff at some organizations  described ICPs that contained goals for the beneficiaries as well as  strategies, timelines, and barriers to meeting those goals. Additionally,  some organizations created ICPs with a mix of short- and long-term  goals, while other organizations said their ICPs contained a small number  of meaningful and achievable goals. Some organizations tailored their  ICPs to focus on the risk level of the beneficiary, with ICPs for low-risk  beneficiaries containing basic educational information on common health  issues such as asthma or diabetes, while ICPs for high-risk beneficiaries  were tailored to identify gaps in their care. Staff at one organization said  the ICPs were not clinical plans but focused on home and community- based services, such as referrals to transportation services.
Care coordinators said they developed the ICP with the beneficiary either  in conjunction with the health risk assessment or after the completion of  the health risk assessment. Some care coordinators used a standard  ICP outline auto-populated with results from the beneficiary’s health risk  assessment as the basis for developing the ICP with the beneficiary.
We also found that implementation of the ICT process varied by  organization in the five states. Specifically, these organizations said that  the frequency and format of ICT meetings depended on the needs of the  beneficiary. Some meetings took place only once, when a beneficiary first  enrolled in the organization, while others took place on a regular basis for  on-going health needs or only in the case of acute events such as  hospitalizations. Additionally, staff from some organizations in our review  said that ICT meetings do not occur for every beneficiary, particularly low- risk beneficiaries, because their health needs may not be complex and  thus they may not need to meet with their ICT. Staff also commented that  communication and meetings among ICT members took place in different  ways. For example, staff at one organization told us they consider  conversations between the organization’s medical director and the  beneficiary’s primary care provider to be a form of ICT communication,  and staff at another organization said ICT meetings can take place  between the care coordinator, the beneficiary, and the beneficiary’s  primary care provider during the beneficiary’s medical appointments.  While we observed some ICT meetings that included the care  coordinator, the beneficiary, and another member of the care team, we  also observed group meetings that covered multiple beneficiaries, which  the organizations also considered to be ICT meetings. Staff from  organizations in our review said that these regularly scheduled in-person  group meetings discussed recently hospitalized beneficiaries or  beneficiaries with health issues, and they typically involved the  organizations’ medical directors, care coordinators, social workers,  pharmacists, and network operations staff. During these types of ICT  meetings, care coordinators summarized a beneficiary’s health status and  meeting participants provided input on how to address the beneficiary’s  needs.
section_title: Organizations Described Challenges in Coordinating Care, and the Extent to Which Care Coordination Occurs in the Demonstration Is Not Fully Known
paragraphs: Organization staff in the five states in our review described challenges  that affected their ability to coordinate care for beneficiaries. Specifically,  these organizations reported challenges related to locating beneficiaries,  engaging beneficiaries and primary care providers, and communicating  with beneficiaries about the demonstration. CMS has established an  oversight framework for the demonstration that includes monitoring  activities. However, while the agency collects information that assesses  the extent to which care coordination is occurring in the demonstration,  not all of this information is comparable.
subsections: section_title: Organizations Described Challenges That Affected Their Ability to Coordinate Care
subsections: section_title: Locating Beneficiaries
paragraphs: Organization staff said it was a challenge locating beneficiaries to initiate  care coordination services because the characteristics of some dual- eligible beneficiaries make it difficult to develop and maintain accurate  contact information. Some dual-eligible beneficiaries are transient  because they are homeless or live in temporary accommodations, such  as a hotel or with relatives. Many may be unreachable by telephone  because they have no or limited access to a telephone. Additionally, staff  told us that behavioral health issues, such as substance abuse, are  prevalent and may affect an individual’s ability to remain in touch with  providers or organizations. Further, organizations have difficulty locating  beneficiaries if the states do not have accurate beneficiary contact  information. Staff from some organizations in our review also told us  that dual-eligible beneficiaries enrolled via the passive enrollment process  were harder to locate, and some beneficiaries were unaware they were  enrolled. Organization staff told us they devoted time and staff resources  trying to locate beneficiaries, some increasing staff or hiring a vendor to  help locate beneficiaries. Furthermore, some organization staff told us  they conducted outreach efforts to community-based organizations that  have prior relationships with dual-eligible beneficiaries and know how to  locate them. Some organizations reported that they had developed  strategies for finding beneficiaries. CMS and some states have discussed  and developed best practices for finding beneficiaries.
When organizations are unable to locate beneficiaries, it can be  challenging for the organizations to coordinate their care, which is one of  the key goals of the demonstration and one that CMS views as essential  to the successful integration of care between Medicare and Medicaid. For  example, staff at some organizations in California told us that, in order to  address the challenge of coordinating services for the beneficiaries they  could not reach, they used a standard ICP outline auto-populated with  any information they had about the beneficiary. We also found that  advocacy groups in four of the five states we reviewed had concerns  about the extent to which care coordination is being provided in the  demonstration. These advocacy groups noted that some of the  beneficiaries with whom they interacted said that they had not been  assigned a care coordinator, participated in an ICT meeting, or worked  with their care coordinator to develop an ICP. One advocacy group told  us that it had worked with a high-risk beneficiary who had been enrolled  in the demonstration for a year but had not yet been contacted by a care  coordinator. Our findings are consistent with the results of a 2015 study  by the Medicaid and Children’s Health Insurance Program Payment and  Access Commission (MACPAC), which found that many of the  beneficiaries who participated in focus groups across three capitated  model states said they did not have a care coordinator and had not  experienced these required components of care coordination.
section_title: Engaging Beneficiaries and Primary Care Providers
paragraphs: Organization staff in the five states in our review said that it is a challenge  to engage beneficiaries to coordinate their care in the demonstration.  Care coordinators pointed out that the demonstration requires effort on  the part of the beneficiary—a willingness to engage with the care  coordinator to use the services available. However, beneficiaries may not  understand how the demonstration can benefit them, and may not be  aware of services available. A beneficiary advocacy group in  Massachusetts said that one goal of the demonstration is to have a  beneficiary-driven care system, but if beneficiaries cannot advocate for  themselves, or are not aware of their options, then they cannot benefit  from the demonstration. Additionally, organization staff said that some  beneficiaries are not interested, while others may be distrustful of the  health care system in general and not comfortable answering questions  about their health from individuals they do not know. Lack of engagement  and understanding of available care options can affect the provision of  care coordination services, including participation in ICTs. For example,  staff we spoke with at a few organizations said that not all beneficiaries  want to participate in their ICT because, for example, they are not  comfortable having their health care discussed in a team setting. CMS  officials said that ICTs are built on the health needs and specific  preferences of the beneficiary and that, while all beneficiaries are to have  access to an ICT, there are no requirements for beneficiaries to  participate in ICT meetings. During our observations of ICT meetings, we  found that not all beneficiaries participated. Specifically, over 17  beneficiaries were discussed during the 9 ICT meetings we observed and  only 8 beneficiaries joined the meetings by phone. CMS officials said that  the beneficiary does not need to be involved every time ICT members  communicate, but should at least be aware of the meetings if he or she is  not participating in them.
Organization staff we spoke with said that engaging primary care  providers in the demonstration has also been a challenge. While primary  care providers are considered a core member of the ICT in the  demonstrations, six of the seven providers we interviewed had never  participated in an ICT meeting and two had never reviewed an ICP.  Organization staff we spoke with said that the busy schedules of primary  care providers, and their varying levels of interest in the demonstration,  made it difficult to engage them in the ICTs. In fact, in many of the ICT  meetings we observed, the beneficiary’s primary care provider was not  present; however, the organization’s medical director was present and  was an active participant in the discussion. Organization staff also said  that a provider’s knowledge of the demonstration can affect his or her  willingness to engage with care coordination activities. Organization staff  and primary care providers said that providers caring for a beneficiary  with multiple health issues are more likely to engage with care  coordinators. Staff of some organizations said they were trying to  increase provider engagement through provider education and provider  incentives, as well as by sending them completed ICPs and results of ICT  meetings, and by scheduling ICT meetings to accommodate providers’  schedules.
section_title: Communicating with Beneficiaries about the Demonstration
paragraphs: Some organizations and beneficiary advocacy groups we spoke with said  that beneficiaries have had difficulty with communication about the  demonstration. Some organizations and beneficiary advocates said  enrollment materials that beneficiaries received from the state were  overwhelming for the beneficiary because of the volume of information in  the materials and because the information was not easy to understand.  Additionally, some organizations and advocates said that enrollment  materials sent by mail often do not get opened. CMS officials said that in  response to this challenge states have attempted to streamline their  enrollment materials by focusing on which materials are most applicable  to beneficiaries in that state. CMS officials added that they are  encouraging the states to test their enrollment materials with a sample of  beneficiaries before distributing them to all beneficiaries, and several  states have opted to do so.
Additionally, staff we spoke with at some organizations said that the  information beneficiaries receive from outside of the organization creates  confusion and anxiety, and may lead to some beneficiaries opting out of  the demonstration. An organization in California said that private entities  sponsored newspaper advertisements that encouraged beneficiaries to  opt out of the demonstration, which created confusion among  beneficiaries. Staff at some organizations said they would like to reach  out to beneficiaries before their effective enrollment date to communicate  with them about the demonstration.
section_title: CMS Has Established a Framework of Monitoring Activities to Oversee the Demonstration
paragraphs: To oversee the coordination of care provided in the demonstration, CMS  has established a framework of monitoring activities. The agency has  established contract management teams (CMT) in the capitated states  that are responsible for monitoring the demonstration on a day-to-day  basis by providing technical assistance and overseeing contract  compliance. These teams allow for collaboration between CMS and the  states and comprise, at a minimum, officials from the CMS central office,  the CMS regional office, and the state Medicaid office, but may include  other entities, depending on the state. CMTs have a number of required  responsibilities outlined in CMS guidance to ensure that organizations  comply with their contracts, such as monitoring the organizations’  performance in meeting measures and tracking complaints. In addition,  the CMTs are required to meet regularly with participating organizations  to discuss various topics including compliance, enrollment, and  beneficiary issues. If an organization is found to be out of compliance with  its contract, the CMTs can impose a range of enforcement actions  increasing in severity from an initial notice of noncompliance to a warning  letter, and finally to a formal corrective action request.
According to CMS officials, the key difference in oversight provided is that  CMS primarily oversees the organizations under the capitated model  while it oversees the states under the MFFS model. Specifically, in states  using an MFFS model, the state itself is primarily responsible for the day- to-day monitoring of the demonstration, and the CMS regional office is  responsible for overseeing the state’s compliance with the terms of its  demonstration as well as tracking its required data reporting for the  demonstration.
One key component of CMS’s oversight is monitoring of core and state- specific measures that the organizations, for the capitated model, and  states, for the MFFS model, are contractually required to report. The  measures include established quality measures from organizations like  the National Quality Forum, as well as demonstration-specific measures  developed by CMS, in collaboration with the states, to assess the  demonstration. The organizations in the capitated states use a common  set of core measures. Similarly, the MFFS states adhere to a common set  of core measures. However, the sets of core measures differ between the  two models. (See table 2.) CMS officials said that they did not  deliberately design the two models to have different sets of core  measures, but that the differences were the result of data that  organizations and states collected prior to the demonstration. Specifically,  they said that many of the demonstration-specific measures in the  capitated states were adapted from existing Medicare Part C and Part D  measures; in contrast, the MFFS states were not collecting these types of  measures prior to the demonstration. In both capitated and MFFS model  states, CMS supplements these core measures with required, state- specific measures. (See app. I for the state-specific measures for the five  states that we reviewed.)
CMS designated a subset of the core and state-specific measures for the  capitated states as quality withhold measures, meaning that, on an  annual basis, CMS and a state’s Medicaid program each withhold a  percentage of an organization’s capitated rate, which is later adjusted and  repaid based on the organization’s performance. Two of the 10 core  measures were quality withhold measures during this first year of the  demonstration, with additional state-specific measures also designated as  quality withhold measures in each state. The CMTs in the capitated states  are required to review an organization’s performance on the remaining  core and state-specific measures, provide feedback to the organizations,  investigate any areas of poor performance, and issue enforcement  actions if organizations are out of compliance. Of the 11 organizations in  the four capitated states that we reviewed, 1 had received a formal  enforcement action—a notice of noncompliance—from CMS related to its  performance on core measures, as of April 2015. In contrast, MFFS  states can earn a retrospective performance payment annually that is  based, in part, on their performance compared to benchmarks for all of  their core and state-specific quality measures, which is intended to  incentivize high performance. States receive a portion of their total  performance payment if they meet the minimum performance threshold  and can qualify to receive additional payments based on how well they  performed on individual measures. Therefore, poorly performing MFFS  states that do not meet the minimum threshold would not earn a  performance payment. The timing of our review was too early in the  implementation process for CMS to have paid a retrospective  performance payment to either of the two MFFS states, but one of the  states—Washington—had recently submitted its first set of annual data.
These core and state-specific measures are outlined in CMS technical  guidance, which includes specific instructions for how organizations and  the states should report the data to CMS. The organizations in the  capitated states are to generally submit their data to CMS on a quarterly,  semiannual, or annual basis, depending on the measure, through a  contractor-administered website. CMS officials told us the contractor then  synthesizes the data and shares them with CMS headquarters and the  CMTs for further analysis. The CMTs may then discuss the results during  regular meetings with the organizations. In contrast, in the MFFS model,  states are responsible for collecting data from the integrated care  organizations annually and submitting it to CMS through a contractor- administered website.
In addition, CMS requires organizations, for the capitated model, and the  states, for the MFFS model, to report data annually from the Consumer  Assessment of Healthcare Providers and Systems (CAHPS), which is a  patient survey developed by another HHS agency, the Agency for  Healthcare Research and Quality. Agency officials told us in early  November 2015 that they expect to receive CAHPS results by the end of  the month for the first capitated states that implemented the  demonstration, and they expect to complete their analysis of the results  and make them available by spring 2016. The MFFS states—Washington  and Colorado—completed the survey by November 2015, and CMS  anticipates the results will be available in spring 2016. CMS officials told  us that they worked with a contractor to adapt a version of the CAHPS  survey for the MFFS states, which is different from the CAHPS survey  used by the organizations in the capitated states. Specifically, the  organizations in the capitated states use the survey that must be  completed by all Medicare managed care plans. In commenting on our  draft report, HHS provided us with new information indicating that CMS  had added 10 demonstration-specific supplemental questions to the  capitated CAHPS survey. In addition, because the organizations in the  capitated model are also Medicare managed care plans, they must report  data annually from the Healthcare Effectiveness Data and Information Set  (HEDIS). HEDIS, which is developed by the National Committee for  Quality Assurance and helps consumers compare the performance of  health plans in providing selected services, and the Medicare Health  Outcomes Survey (HOS), which is a patient-reported outcomes survey,  are measures that must also be reported by Medicare managed care  plans to CMS. Agency officials told us they received the first HEDIS  results in November 2015 and they expect HOS results in spring 2016.  Organizations in the capitated states are also required to regularly report  encounter data to CMS, which contain information on the services and  items furnished to beneficiaries.
CMS has also hired a contractor—RTI International—to assess the  implementation of the demonstration and evaluate its impact on  beneficiary experience, quality, utilization, and cost. RTI International  will conduct annual and final aggregate evaluations of each state’s  demonstration program, as well as an overall evaluation across the states  that will use both qualitative and quantitative data analysis. Specifically,  the contractor will analyze enrollment, encounter, and claims data and  conduct site visits, focus groups, and interviews. CMS officials said that  the first annual state evaluation is anticipated to be completed in winter  2016 and the final aggregate evaluation is expected in 2018, at the  earliest.
section_title: CMS Collects Information that Assesses the Extent to which Care Coordination Is Occurring in the Demonstration, but Not All of This Information is Comparable
paragraphs: CMS collects different sets of core measures for the capitated and MFFS  model states. Two out of 10 core measures in the capitated model  provide information on the extent to which care coordination is occurring,  while no core measures in the MFFS model examine this area. The core  measures for the capitated states examine the percentage of health risk  assessments completed within 90 days of enrollment and the percentage  of reassessments that are completed annually. CMS does not collect  any other core measures in either the capitated states or the MFFS states  that assess key aspects of care coordination, such as whether care  coordinators were meeting with beneficiaries, whether ICPs were being  developed, or whether ICT meetings are occurring—components of the  demonstration that, like the health risk assessments, are required by  CMS under the demonstration.
CMS also collects some state-specific measures that examine the extent  to which care coordination is occurring; however, these measures are not  collected consistently across the states, or for the two types of models in  the demonstration. For example, Washington (an MFFS state),  Massachusetts (a capitated state), and Illinois (a capitated state) have  state-specific measures that examine whether beneficiaries have  completed an ICP within 90 days of enrollment. While the other two  capitated states in our review have a similar measure, they differed from  the ICP measures in Washington, Massachusetts, and Illinois. For  example, while California has a state-specific measure assessing whether  an ICP was completed, there is no time period specified for doing so, and  it has additional measures that separately examine whether high- and  low-risk beneficiaries had an ICP completed within 30 working days of  their health risk assessment. We also noted that all the capitated states  in our review had a state-specific measure that examined whether  beneficiaries had a documented discussion of care goals, but the MFFS  state in our review, Washington, did not have this measure.
In addition, CMS officials told us they plan to assess care coordination  through the forthcoming results of the CAHPS survey (for both the  capitated and MFFS models). CMS adapted the CAHPS survey for the  demonstration in the MFFS states and, in commenting on our draft report,  HHS provided us with new information indicating that CMS had added  demonstration-specific supplemental questions to the CAHPS survey in  the capitated states. These surveys contain two questions specific to care  coordination that are consistent across all states in the demonstration.  Specifically, the MFFS and capitated CAHPS surveys both contain  questions about whether anyone from the organization helped to  coordinate the beneficiaries’ care and how satisfied beneficiaries were  with the help they received to coordinate their care. While the results of  the capitated and MFFS surveys are still forthcoming, these questions  may be able to provide CMS with important information about whether  beneficiaries are meeting with their care coordinators. However, while the  MFFS CAHPS survey also contains questions related to developing an  ICP and meeting with an ICT, these questions are not included in the  capitated CAHPS survey. There were no questions on either survey  related to the completion of the health risk assessment.
We and others have noted the importance of a common set of  comparable measures across the states. In a 2012 report, we  recommended that CMS systematically evaluate performance in its D- SNP program for dual-eligible beneficiaries and noted that without  standard measures it would not be possible for CMS to fully evaluate the  relative performance of the D-SNPs. In addition, the Commonwealth  Fund noted that, while varying the Financial Alignment Demonstration’s  quality measures from state to state may be necessary because the  demonstrations differ across all the states, researchers and policymakers  will need a common set of comparable measures in order to make useful  cross-state comparisons. While CMS has developed two core measures  related to care coordination that are consistent across the capitated  states in the demonstration, these measures are not core measures in the  MFFS model and are therefore not comparable across both  demonstration models. Moreover, while CMS collects some state-specific  measures that examine this area, they are not comparable across the  states. However, CMS has included two questions in its CAHPS survey  that are consistent across the demonstration states in both the capitated  and MFFS models, and the agency anticipates using these forthcoming  results to assess care coordination.
Internal control standards for the federal government specify that  monitoring should be designed to help an agency accomplish its goals.  Because not all of the information that CMS collects to examine the  extent to which care coordination is occurring is comparable across the  demonstration, the agency does not fully know whether it has achieved its  goal of improving care coordination for dual-eligible beneficiaries. Further,  CMS does not have all of the data necessary to identify and correct  potential problems in the demonstration. CMS officials told us that any  issues related to care coordination would be identified in the forthcoming  results of the CAHPS survey and discussed during the regular CMT  meetings with the organizations. CMS officials also noted that some of  their existing core measures would indicate whether care coordinators are  effectively coordinating care for patients, such as a core measure in the  capitated model examining nursing facility diversion, that is, the  percentage of beneficiaries living in the community who require an  institutional level of care but who did not reside in a nursing home for  more than 100 days. CMS officials told us that they believe these types of  outcome-oriented measures provide more valuable information than  process-oriented measures because they assess whether care  coordination is effectively improving the health of beneficiaries. While we  believe outcome measures are important for assessing care coordination  in the demonstration, process measures are also needed to determine  whether the demonstration is being implemented as intended. If process  measures are not in place across the states participating in the  demonstration to identify and correct potential problems, we believe that  outcome measures cannot be reliably assessed.
section_title: Conclusions
paragraphs: CMS’s Financial Alignment Demonstration has the potential to improve  the quality of care for dual-eligible beneficiaries and to reduce spending in  the Medicare and Medicaid programs. A growing consensus suggests  that coordination of care is an important strategy for achieving these  goals. Dual-eligible beneficiaries, who often have extensive health care  needs, typically receive their benefits separately through the Medicare  and Medicaid programs. Improving care coordination is a key goal for  CMS’s demonstration and will ultimately influence whether the program is  successful. Our work identified multiple challenges in locating and  communicating with beneficiaries as well as difficulties in engaging  providers in fundamental care coordination activities. Similarly, our  interviews with beneficiary advocacy groups and providers called into  question the extent to which care coordination is occurring in the  demonstration.
CMS collects information about the extent to which care coordination is  occurring in the demonstration, but not all of this information is  comparable across the states. Therefore, it cannot reasonably determine  whether health risk assessments are being completed, ICPs are being  developed, and ICT meetings are occurring—all aspects of care  coordination that CMS requires organizations to provide to beneficiaries.  By not having data that are consistently available from all states across  the demonstration that examine these aspects of care coordination, CMS  does not fully know whether it has achieved its goal of providing  coordinated care to dual-eligible beneficiaries. CMS has included  measures in its CAHPS survey for both the capitated and MFFS states  that examine whether beneficiaries have had their care coordinated  among different health care providers. However, we believe that  establishing additional measures that would allow CMS to obtain these  data from all states and organizations participating in the demonstration  could help it better understand the reasons why care coordination is or is  not occurring and thus help the agency to strengthen the demonstration.  Given the potential for the demonstrations to be expanded across the  United States, it is important that CMS expediently collect this information  to inform whether it is achieving its goal.
section_title: Recommendations for Executive Action
paragraphs: To strengthen oversight of the provision of care coordination services in  the Financial Alignment Demonstration, we recommend that the  Secretary of Health and Human Services direct the Administrator of CMS  to take the following two actions:
Expediently develop and require organizations in the capitated model,  and the states in the MFFS model, to report comparable core data  measures across the demonstration that measure the following:  the extent to which ICT meetings are occurring, and  for MFFS states, the extent to which health risk assessments are  completed.
Align CMS’s existing state-specific measures regarding the extent to  which ICPs are being developed across the capitated and MFFS  states to make them comparable and designate them as a core  reporting requirement.
section_title: Agency Comments and Our Evaluation
paragraphs: HHS reviewed a draft of this report and provided written comments, which  are reprinted in appendix II. In its comments, HHS did not specifically  state whether it agreed or disagreed with our first recommendation, but it  concurred with our second recommendation. HHS also provided us with  technical comments, which we incorporated in the report as appropriate.
Regarding our first recommendation that HHS require organizations to  report comparable core data measures across the demonstration, HHS  provided us with new information that it had not previously provided,  which caused us to reconsider one of our findings and a related  recommendation. Specifically, HHS noted that that the CAHPS surveys  for both the capitated and MFFS models contain supplemental questions  for the demonstration that are specific to care coordination, whereas they  had previously provided us with information indicating that only the MFFS  model CAHPS survey contained these questions. Given the new  information HHS provided, we updated our report to reflect CMS’s plan to  use the forthcoming results of the CAHPS survey to assess care  coordination across the demonstration. In addition, we modified the  recommendation contained in our draft report that CMS require  organizations in the capitated model, and the states in the MFFS model,  to report comparable core data measures across the demonstration  regarding the extent to which care coordinators are meeting with  beneficiaries. In addition, HHS noted in its comments that it has  comparable risk assessment completion rate measures in both the MFFS  and capitated models and said the variances between the health risk  assessment measures in the two demonstrations reflect different design  elements. However, we found that there were no core measures in the  MFFS model examining the health risk assessment completion rate. HHS  also described steps that it has been taking that may, in the future, help to  address the findings in this report. For example, HHS noted that it is  developing a set of care coordination measures to supplement data  obtained from the CAHPS surveys. HHS also stated that the timeline for  measurement development may not align with the current three-year  demonstration period, such that the inclusion of any additional new  measures would have to be considered for potential future extension or  expansion of the initiative. Given the potential for the demonstrations to  be expanded across the United States, we believe it is important that  CMS expediently collect this information to inform whether care  coordination in the demonstration is being implemented as intended. HHS  stated that it recently entered into a contract to support measure  development, which should better equip HHS to evaluate the extent to  which care coordination is occurring in the demonstration, among other  things.
HHS concurred with our second recommendation to make CMS’s existing  state-specific measures comparable and designate them as a core  reporting requirement. HHS stated it would examine the feasibility of  designating ICPs as a core reporting requirement as the demonstration  progresses. However, it noted that it currently monitors the timely  completion of ICPs in both models using different state-specific measures  rather than uniform core reporting measures in order to reflect differences  in the demonstration parameters across the states. We believe that  aligning existing state-specific measures regarding ICP development to  make them comparable and designating them as a core reporting  requirement would help CMS better understand the extent to which care  coordination is occurring across the demonstration and thus help the  agency strengthen the demonstration as it progresses.
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If you or your staffs have any questions about this report, please contact  me at (202) 512-7114 or kingk@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix III.
section_title: Appendix I: Centers for Medicare & Medicaid Services’ (CMS) State-Specific Measures for the Financial Alignment Demonstration, by State
subsections: section_title: State-specific measure Access
section_title: State-specific measure Enrollee protections
paragraphs: X  effective as of January 1, 2014, Virginia’s measures were effective as of April 1, 2014, and  Washington’s measures were effective as of July 1, 2013.
section_title: Appendix II: Comments from the Department of Health and Human Services
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact name above, Catina Bradley, Assistant Director;  Giselle Hicks; Maggie Holihan; Sarah-Lynn McGrath; Beth Morrison; Ann  Tynan; and Emily Wilson made key contributions to this report.