Dual-eligible beneficiaries—individuals eligible for both Medicare and Medicaid—generally fall into two categories: low-income seniors (those aged 65 years old and over) and individuals with disabilities under the age of 65 years. Requirements to protect the rights of beneficiaries under both programs are of particular importance to dual-eligible beneficiaries because of their generally greater health care needs. Several efforts have been made in the past to better integrate care for dual-eligible beneficiaries. Medicare is a federally financed program that in 2011 provided health insurance coverage to nearly 49 million beneficiaries—people age 65 and older, certain individuals with disabilities, and those with end-stage renal disease. In Medicare FFS, beneficiaries may choose their health care providers among any enrolled in Medicare. However, CMS also contracts with MA organizations, private entities that offer managed care plans to Medicare beneficiaries. As of 2011, about 25 percent of Medicare beneficiaries were enrolled in a MA plan. As part of the agency’s oversight of MA plans, CMS responds to complaints from beneficiaries and other parties, conducts surveillance, and conducts compliance audits. CMS responds to complaints from beneficiaries, health care providers, and other parties that come into the agency through a 1-800-MEDICARE phone line. It is through this mechanism that CMS generally resolves issues that are beneficiary- specific. CMS conducts surveillance by having routine discussions with managed care organizations, monitoring plan-submitted data, and tracking and monitoring complaint rates by MA plan and complaint category. CMS uses compliance audits to assess whether a managed care organization’s operations are consistent with federal laws, regulations, and CMS policies and procedures. Audits typically involve a combination of desk reviews of documents submitted by MA organizations, and, at CMS’s discretion, site visits. Medicaid is a joint federal-state program that finances health care coverage for certain low-income individuals.matching funds for services provided to Medicaid beneficiaries, each state must submit a state Medicaid plan for approval by CMS. The state Medicaid plan defines how the state will operate its Medicaid program, including which populations and services are covered. States must operate their Medicaid programs within broad federal parameters. While complying with these federal requirements, however, states have the flexibility to tailor their programs to the populations they serve, including the imposition of additional protections for beneficiaries. For example, states generally are required by federal Medicaid law to cover certain benefits, while other benefits may be included at a state’s option. Subject to CMS approval, states may choose to operate a portion of or their entire Medicaid programs as FFS or managed care. With respect to managed care, states vary widely in terms of the scope of services they provide and the populations they enroll. States have certain options when considering whether to enroll Medicaid beneficiaries into managed care, including whether enrollment is voluntary or mandatory. States may obtain the authority to mandatorily enroll Medicaid beneficiaries into managed care plans with CMS approval of a state plan amendment. However, under federal law, states cannot require certain categories of beneficiaries, including dual-eligible beneficiaries, to mandatorily enroll under this authority. states may obtain the authority to enroll Medicaid beneficiaries, including dual-eligible beneficiaries, into managed care through the approval of two types of Medicaid waivers: Section 1115 of the Social Security Act provides the Secretary of Health and Human Services with the authority to grant states waivers of certain federal Medicaid requirements and allow costs that would not otherwise be eligible for federal funds for the purpose of demonstrating alternative approaches to service delivery. Under a 1915(b) waiver, the Secretary may waive certain Medicaid requirements, allowing states to operate a managed care program to the extent it is cost-effective and consistent with the purposes of the program. See 42 U.S.C. § 1396u-2(a)(1)-(2). managed care plans. However, more recently states are beginning to move dual-eligible beneficiaries into managed care plans as well. In 2010, about 9.3 percent of dual-eligible beneficiaries were enrolled in Medicaid managed care plans. Another type of waiver, the 1915(c) waiver, is the primary means by which states provide home- and community-based services (HCBS) to Medicaid beneficiaries. Under a 1915(c) waiver, states can provide HCBS that may not be available under the state’s Medicaid plan to beneficiaries that would, if not for the services provided under the waiver, require institutional care.may provide under a 1915(c) waiver or through the state’s Medicaid plan, in addition to other services such as respite care, personal care, and case management. Home health care is one of the services that states At the federal level, CMS oversight of state Medicaid programs includes monitoring the programs and providing guidance to states. States must provide assurances to CMS that they have mechanisms in place to ensure that any managed care organization with which the state contracts complies with federal regulations in order to obtain approval for enrolling Medicaid beneficiaries into managed care. Though CMS is not a party to the contract, states are required to obtain CMS approval of the contracts between states and managed care organizations in order to qualify for federal funding. States administer the day-to-day operations of their Medicaid programs. At the state level, requirements for Medicaid managed care plans are often included as part of the contract between the state and the managed care plan and may derive from federal or state law, regulations, or policies. States generally oversee managed care plans through a combination of informal and formal monitoring that may include regular meetings, reviews of plan-submitted reports, audits, and financial reviews. Medicare and Medicaid have a number of requirements intended to protect the rights of beneficiaries, some of which are of particular importance to dual-eligible beneficiaries. Medicare and Medicaid have requirements that specify the circumstances under which a beneficiary may be compelled to enroll in a managed care plan instead of obtaining services through the FFS program. How beneficiaries are enrolled in managed care, for example whether the enrollment is mandatory or voluntary, could have implications for dual- eligible beneficiaries who may have more serious health care needs and who, because of cognitive impairments, may require assistance in understanding their options or the implications of their choices. In general, federal law and regulations do not specifically require MA plans or Medicaid managed care plans to cover services provided by a beneficiary’s previous providers if that provider is not in the plan’s network when a beneficiary first enrolls in a plan or switches plans. There are limited circumstances when managed care plans are required to cover such services during a transition period. Medicare and Medicaid also have certain federal requirements for managed care plans to ensure coordination of at least some services for beneficiaries. Dual-eligible beneficiaries often have complex health care needs and, therefore, may see several different providers. Accordingly, continuing relationships with providers, as well as ensuring coordination of care, is of particular importance to this population. Medicare and Medicaid have requirements for managed care plans to maintain provider networks that ensure beneficiaries can access a range of health care providers and obtain services in a timely manner. Within Medicaid managed care, provider participation problems have been specifically noted for specialty and dental care. Medicare and Medicaid have requirements about the type and format of materials provided to beneficiaries to promote enrollment into a managed care plan or communicate information about coverage and costs. Inappropriate marketing practices have in the past led some Medicare beneficiaries to enroll in MA plans in which they had not intended to enroll or that did not meet their health care needs. Inappropriate marketing may include activities such as providing inaccurate information about covered benefits and conducting prohibited marketing practices, such as door-to- door marketing without appointments and providing potential beneficiaries with meals or gifts of more than nominal value to induce enrollment. Medicare and Medicaid have requirements about how beneficiaries can qualify for certain services and the scope of coverage provided. According to CMS, two services where coverage differences between Medicare and Medicaid are particularly problematic for dual-eligible beneficiaries are nursing facility services and home health care. While both programs cover these benefits, they differ in terms of how a dual- eligible beneficiary can qualify for the benefit and the scope of the coverage provided. As a result, there can be cost-shifting between the programs. Nursing Facility Services. Medicare and Medicaid both set requirements for the conditions a beneficiary must meet to become eligible for coverage of nursing facility services. Medicare’s coverage of nursing facility care is limited to 100 days of posthospital skilled nursing facility (SNF) services. SNF services may only be provided in an inpatient setting and include skilled nursing (such as intravenous injections, administration of prescription medications, and administration and replacement of catheters); room and board; and physical, occupational, and speech language therapies. In contrast, Medicaid’s coverage of nursing facility services includes skilled nursing, rehabilitation needed due to injury, disability or illness, and long-term care. Under federal law, state Medicaid programs must cover nursing facility services for qualified individuals age 21 or over. All states have chosen to also offer the optional benefit of nursing facility services for individuals under 21 years of age. Medicare beneficiaries may continue to need nursing facility care after their Medicare benefit is exhausted. In such instances beneficiaries may pay privately or use any long-term care insurance they may have. In certain circumstances, the beneficiaries may also be eligible for Medicaid if, for example, they spend enough of their resources to meet Medicaid eligibility rules in their state. If the beneficiary does become dually eligible, the beneficiary may then qualify for Medicaid coverage of nursing facility services, beyond what Medicare covers. Overlapping coverage of nursing facility care in Medicare and Medicaid provides nursing facilities with a financial incentive to transfer dual-eligible beneficiaries back to hospitals when nursing facility care is being paid for by Medicaid. By transferring dual-eligible beneficiaries from a nursing facility to a hospital, the nursing facility will qualify for what is generally a higher payment under Medicare when beneficiaries are readmitted and require skilled nursing services. One study of hospitalizations among dually eligible nursing facility residents in 2005 found that approximately 45 percent of hospitalizations among beneficiaries receiving Medicare SNF services or Medicaid nursing facility services were potentially avoidable. Home Health Care. Medicare and Medicaid both set requirements for how a beneficiary can qualify for home health services, and state Medicaid programs further refine these requirements for Medicaid coverage. Medicare’s home health benefit covers skilled nursing services, physical therapy, speech-language pathology, occupational therapy, medical social services, and medical equipment. required to cover home health services for certain categories of beneficiaries, including those who are entitled to nursing facility services under the state plan. Under Medicaid’s home health benefit, states must cover nursing services, home health aide services, and medical supplies and equipment for use in the home. States may also choose to cover physical, occupational, or speech therapy under this benefit. The Medicare Payment Advisory Commission reported that some states have tried to increase the proportion of home health services for dual-eligible beneficiaries covered by Medicare, rather than Medicaid. For instance, some states have required home health agencies to show proof of a Medicare denial for home health services for a dual-eligible beneficiary before covering the service under Medicaid. Medicare may also cover home health aide services on a part-time or intermittent basis if they are needed as support services for skilled nursing services. of daily living (ADL), instrumental activities of daily living (IADL), supervision or guidance with ADLs, or a mix of those. Beneficiaries’ ability to contest a determination that their benefits will be denied, reduced, or terminated is a basic right provided for both Medicare and Medicaid beneficiaries. must follow depends on whether the benefit being contested is a Medicare or Medicaid benefit. Both Medicare and Medicaid have standard appeals processes and expedited appeals processes in cases of urgent need. In this report, we only describe the standard Medicare and Medicaid appeals processes. January 2012, 84 PACE sites in 29 states enrolled about 21,000 beneficiaries. There are key differences in enrollment choice requirements across the Medicare and Medicaid programs, the FFS and managed care payment systems and the selected states. Certain consumer protection requirements are unique to managed care plans in areas such as continuity and coordination of care and provider networks. Other consumer protection requirements also differ across the programs, payment systems, and selected states. The MMA authorized a type of MA plan referred to as a special needs plan to address the unique needs of certain categories of Medicare beneficiaries, including dual-eligibles. Pub. L. No. 108-173, § 231, 117 Stat. 2066, 2207 (2003) (codified, as amended, at 42 U.S.C. § 1395w-21(a)(2)(A)(ii)). SNPs, including D-SNPs, have been reauthorized several times since their establishment was first authorized in 2003. Within Medicare, enrollment in managed care is always voluntary, whereas state Medicaid programs can require enrollment in managed care in certain situations. In Medicare, beneficiaries—including dual- eligible beneficiaries—are enrolled in FFS unless they select an MA plan. In general, beneficiaries may select an MA plan voluntarily when they first become eligible for Medicare, during an annual coordinated election period, or during special election periods, such as when an MA plan’s contract is terminated or discontinued in the area where a beneficiary lives or when CMS determines that beneficiaries meet exceptional conditions. CMS has created a special election period for dual-eligible beneficiaries, and accordingly, they may opt into MA or FFS or change MA plans at any time. They generally may select any MA plan, including D-SNPs, that serves the area where they live, though the number of plans available varies by area. MA plans may limit the providers from whom Medicare beneficiaries, including dual-eligible beneficiaries, may receive covered services, whereas beneficiaries in Medicare FFS may receive covered services from any provider enrolled in Medicare. In contrast, a Medicaid beneficiary’s ability to choose to remain in FFS or enroll in managed care depends on how the state structures its Medicaid program. As an alternative to FFS, states can structure their Medicaid programs to require enrollment in managed care, or allow beneficiaries to choose between the two payment systems. Unlike in Medicare, states can mandatorily enroll beneficiaries, including dual-eligible beneficiaries, into Medicaid managed care with CMS approval of a section 1115 demonstration waiver or section 1915(b) waiver. States mandating enrollment into a managed care plan generally must provide beneficiaries a choice of at least two plans, except in specific circumstances, such as in rural areas. Otherwise, similar to Medicare, the number of available Medicaid managed care plans varies, depending on how many plans are offered where the beneficiary lives. Subject to the terms and conditions of the waiver, Medicaid managed care plans can generally limit beneficiaries, including dual-eligible beneficiaries, to the plan’s provider network, whereas beneficiaries in Medicaid FFS may receive covered services from any qualified Medicaid provider. CMS officials informed us, however, that for dual-eligible beneficiaries, the agency does not have the authority to allow states to limit the beneficiary’s choice of provider for Medicare covered benefits when mandatorily enrolling them into Medicaid managed care plans. State requirements vary with respect to Medicaid enrollment into FFS or managed care and for choice between plans if beneficiaries enroll in managed care. For example: Arizona: The state requires Medicaid beneficiaries, including all dual- eligible beneficiaries, to enroll in either the Medicaid acute or long- term managed care programs under a section 1115 demonstration waiver. Beneficiaries in the state’s acute care program have a choice among managed care plans. Beneficiaries enrolled in the long-term care program generally have a choice of plans if they live in or are moving to Pima or Maricopa counties, which are the state’s two most populated counties and the only counties where more than one long- term care plan operates. California: Medicaid beneficiaries’ choice of payment system varies depending on where they live among California’s 58 counties. In 28 mostly rural counties all dual-eligible beneficiaries are in FFS. In the remaining 30 counties, the state has three different Medicaid programs for enrolling beneficiaries in managed care. Dual-eligible beneficiaries in 14 California counties are mandatorily enrolled in managed care through a county-organized health system, which is a health plan operated by a county that contracts with the state to provide health care benefits to Medicaid beneficiaries. Because there is only one plan in each of these counties, beneficiaries enrolled in the county-organized health systems have no choice between plans. Dual-eligible beneficiaries in 14 counties may choose between FFS or the state’s Two-Plan managed care program. Under the Two-Plan program, beneficiaries who enroll in managed care have a choice between the Local Initiative Health Plan—a public agency that is independent of the county—and a commercial plan. In the remaining two counties—Sacramento and San Diego—dual-eligible beneficiaries can choose between FFS or the Geographic Managed Care program.eligible beneficiaries who enroll in managed care can choose from several commercial managed care plans. Under the Geographic Managed Care program, dual- Minnesota: Dually eligible seniors in Minnesota must enroll in one of two managed care programs, and dual-eligible beneficiaries who became eligible on the basis of their disabilities can choose whether to enroll in a managed care program. Minnesota has a 1915(b)(c) waiver to mandatorily enroll dually eligible seniors in a Medicaid managed care plan. Alternatively, these seniors can choose to enroll in a participating D-SNP that, under contract with the state, integrates Medicare and Medicaid financing and services. Dual-eligible beneficiaries age 18 to 64 who have disabilities may opt back into FFS. If they do not opt into FFS, they are enrolled in managed care and may opt into FFS at any time. Whether dual-eligible beneficiaries have a choice between plans varies depending on the county where they live. North Carolina: According to North Carolina Medicaid officials, all Medicaid beneficiaries, including dual-eligible beneficiaries, are in FFS, and the majority of dual-eligible beneficiaries are in a primary care case management program, where primary care providers are paid on a FFS basis, in addition to receiving a monthly fee to perform certain care coordination activities. In general, federal law and regulations do not specifically require MA plans or Medicaid managed care plans to cover services provided by a beneficiary’s previous providers if that provider is not in the plan’s network when a beneficiary first enrolls in a plan or switches plans. There are limited circumstances when managed care plans are required to cover such services during a transition period. MA organizations must ensure that covered services are available and accessible to beneficiaries. In implementing this requirement, CMS officials informed us that MA organizations must ensure that there is no gap in coverage or problems with access to medically necessary services when a beneficiary must change to a plan-contracted provider. For example, a beneficiary receiving oxygen may need to switch to a new oxygen supplier when the beneficiary joins the MA plan or switches plans. As the beneficiary transitions to the new oxygen supplier, the MA plan may need to reimburse the beneficiary’s previous provider to ensure that there is no gap in coverage, and that the beneficiary maintains access to medically necessary services. MA organizations also must ensure coordination of services through various arrangements with network providers, such as programs that coordinate plan services with community and social services in the area, such as services offered by an area agency on aging. Additionally, D-SNPs or any other type of SNP must provide dual-eligible beneficiaries with access to appropriate staff to coordinate or deliver all services and benefits, and coordinate communication among plan personnel, providers, and the dual-eligible beneficiaries themselves. As with Medicare, Medicaid managed care plans are generally not required to cover services by a beneficiary’s previous provider if that provider is not in the plan’s network. However, states determine to what extent Medicaid managed care plans must provide beneficiaries with access to a person or entity primarily responsible for coordinating health services on the basis of the services the plan must cover. Individual states may have continuity of care requirements for their Medicaid managed care programs, as defined under an applicable waiver or state requirements. For example, in California, beneficiaries newly enrolled in managed care plans may request and receive coverage of the completion of treatments initiated by an out-of-network provider with whom they have an ongoing relationship in certain circumstances, such as for the treatment of a terminal illness or acute condition. The length of the coverage depends on the stability of the beneficiary and the nature of the medical condition. Minnesota also has continuity of care requirements. For newly enrolled dually eligible seniors, managed care plans must cover medically necessary services that an out-of-network provider, a different plan, or the state agency authorized before the dual-eligible beneficiary enrolled with the managed care plan. However, the plan is allowed to require that the dual-eligible beneficiary receive the services from an in-network provider if that would not create an undue hardship on the dual-eligible beneficiary and the services are clinically appropriate. Arizona requires that managed care plans employ transition coordinators to ensure continuity of care, and beneficiaries in the state’s long-term care program receive additional case management for help navigating their care options, including planning, coordinating and facilitating access to services. Medicare and state Medicaid programs require managed care plans to meet certain provider network standards. In order to limit beneficiaries to a network of providers, MA organizations must meet a number of requirements, including maintaining and monitoring a network of appropriate providers, under contract, that is sufficient to provide adequate access to covered services to meet the needs of enrolled beneficiaries. Federal guidelines establish minimum network adequacy requirements that vary depending on a county’s geographic designation, such as whether the county is urban or rural. MA organizations must contract with sufficient numbers of certain types of provider specialists per 1,000 Medicare beneficiaries in a county. For example, MA plans operating in rural counties must have at least one full-time equivalent (FTE) primary care provider per 1,000 beneficiaries. Additionally, MA organizations must demonstrate that their network meets geographic requirements related to the time and distance it takes beneficiaries to travel to providers. For example, in rural counties, MA organizations must also ensure that 90 percent of beneficiaries can access primary care providers within 40 minutes and 30 miles of travel. MA organizations must also ensure that the networks include a minimum number of specialists and specialty facilities, such as at least one cardiologist and one skilled nursing facility per 1,000 beneficiaries. States must ensure, through contracts, that Medicaid managed care plans demonstrate that they have the capacity to serve expected enrollment in the service area in accordance with state standards. For example, plans must submit documentation to the state that they offer an appropriate range of preventive, primary care, and specialty services, and maintain a network of providers that is sufficient in number, mix, and geographic distribution to meet the needs of the enrollees. Unlike Medicare, however, federal Medicaid laws and regulations do not establish minimum provider network requirements and instead generally require states to set the standards for access to care. Accordingly, subject to the terms and conditions of a waiver, if applicable, states may establish requirements that define the minimum number and types of providers in a network, and time and distance requirements between beneficiaries and primary care providers, as well as other network adequacy requirements. For example, Medicaid managed care plans in California must maintain a provider to beneficiary ratio of one FTE primary care physician for every 2,000 beneficiaries and one FTE physician from any specialty for every 1,200 beneficiaries. In some counties, managed care plans must also ensure that primary care physicians are located within 30 minutes or 10 miles of beneficiaries’ residences, unless the state approves an alternative time and distance standard. In addition to time and distance standards, Arizona requires managed care plans to contract with a specific number of providers, as determined by the state, which varies by each area that the plan serves. Arizona also defines time frames for beneficiaries to be able to access some services. For example, Arizona Medicaid managed care plans must provide beneficiaries with access to emergency primary care services within 24 hours, urgent primary care services within 2 days, and routine primary care services within 21 days. Plans must include a minimum number of other types of providers—such as dentists, pharmacists, home- and community-based services providers, and behavioral health facilities—in their networks as well. Medicare and Medicaid each have requirements regarding the marketing materials managed care organizations send out to beneficiaries. MA organizations are required to comply with a variety of federal requirements for marketing materials that are intended to promote enrollment in a specific health plan. For example, organizations generally must submit marketing materials to CMS for review prior to sending to beneficiaries. Materials must provide an adequate written description of the plan’s benefits and services and comply with formatting requirements, such as a minimum font size. In addition, MA organizations must translate materials into any non-English language that is the primary language of at least 5 percent of individuals in the plan’s service area. Medicaid managed care plans are required to comply with both federal and state requirements for marketing materials. For example, Medicaid managed care plans must obtain state approval before distributing marketing materials. Federal requirements also mandate that materials must be written in an easily understood language and format, though requirements for format are not precisely defined. In addition, plans must make information, including Medicaid marketing materials, available in each prevalent language spoken by enrollees and potential enrollees in the plan’s service area. Subject to the terms and conditions of a waiver, if applicable, states may further define requirements for readability and material translation, while other states may prohibit marketing altogether. For example, marketing materials in California must be translated when a threshold number of beneficiaries whose primary language is not English live in a managed care plan’s service area or in the same or adjacent zip codes, among other circumstances. Additionally, all Medicaid marketing materials in California must be written at no higher than the sixth-grade reading level and be approved by the state Medicaid agency. Arizona prohibits Medicaid managed care plans from conducting any marketing that is solely intended to promote enrollment; all marketing materials must include a health message. Other requirements affecting dual-eligible beneficiaries, such as coverage for nursing facility and home health services and the appeals process, vary between Medicare and Medicaid, and between the FFS and managed care payment systems. Beneficiaries must meet different requirements to qualify for nursing facility care under Medicare and Medicaid. As required under federal law, to qualify for Medicare’s 100 days of SNF coverage, beneficiaries must have a prior hospital stay. Specifically, Medicare beneficiaries must have been hospitalized for medically necessary inpatient hospital care for at least 3 consecutive calendar days, not including the discharge date. In addition, Medicare beneficiaries must meet certain criteria, such as: (1) require skilled nursing or rehabilitative services on a daily basis, (2) services must only be rendered for a condition the beneficiary had during hospitalization, and (3) require daily skilled services that can only be provided in an SNF. Unlike Medicare, Medicaid does not limit coverage of nursing facility services to beneficiaries with prior hospital stays and states must cover services provided by qualified SNFs as well as other types of nursing facilities. Instead, federal Medicaid law requires states to provide coverage of nursing facility services for adult Medicaid beneficiaries when medically necessary. Within broad federal parameters, such as requiring that beneficiaries need daily, inpatient nursing facility services that are ordered by a physician, states may impose additional requirements when defining coverage for this benefit.beneficiaries in North Carolina, must show they meet the requirements to be in a nursing facility by demonstrating some qualifying conditions. Qualifying conditions may include, among other things, (1) the need for services that require a registered nurse a minimum of 8 hours a day and other personnel working under the supervision of a licensed nurse, (2) the need for restorative nursing to maintain or restore maximum function or prevent deterioration in individuals with progressive disabilities as much as possible, or (3) the need for a specialized therapeutic diet. In Arizona, the acute care program covers nursing facility services for a limited amount of time (90 days) if hospitalization will occur otherwise or the treatment cannot be administered safely in a less restrictive setting, such as at home. Medicaid beneficiaries in the long-term care program in Arizona have longer-term nursing facility benefits. Beneficiaries qualify for the long-term-care program when they have a functional or medical condition that impairs functioning to the extent that the individual would be deemed at immediate risk of institutionalization. Impairments may include, among other things, requiring nursing care, daily nurse supervision, regular medical monitoring, or presenting impairments with cognitive functioning or self-care with ADLs. Beneficiaries must meet different requirements to qualify for home health services under Medicare and Medicaid. Medicare beneficiaries may only qualify for home health coverage when they are confined to a home or an institution that is not a hospital, SNF, or nursing facility. Additionally, the beneficiary must be under the care of a physician, need intermittent physical therapy, speech language pathology skilled nursing care,services, or have a continuing need for occupational therapy services, and receive services under a written plan of care. Unlike in Medicare, states may not require that Medicaid beneficiaries be confined to a home or institution in order to qualify for home health benefits. Instead, federal regulations require that in order to qualify for Medicaid coverage, home health services generally must be provided at the beneficiary’s home and ordered by a physician as part of a written As with nursing plan of care, which must be renewed every 60 days. facility services, state Medicaid programs have the authority to impose additional conditions on accessing home health benefits, and accordingly state programs vary with respect to when beneficiaries may qualify for home health benefits. For example, to receive home health coverage in North Carolina, a physician must order the home health services and must have face-to-face contact with the beneficiary 90 days prior to care or 30 days after care, and the services must be medically necessary. Beneficiaries must have at least one reason, from a specific list of reasons set by the state, to receive home health services.beneficiaries might qualify if they require assistance leaving the home because of a physical impairment or medical condition, or if they are medically fragile. For example, Medicare and Medicaid each have multiple levels of appeals, which vary further between each program’s managed care and FFS delivery systems. Accordingly, the appeals processes that dual-eligible beneficiaries encounter differ depending on whether the benefit being denied, reduced, or terminated is a Medicare or Medicaid benefit, and whether the individual is enrolled in FFS or managed care. Both programs require that beneficiaries in either managed care and FFS be notified of their right to appeal. Medicare has five levels of appeals for managed care and FFS. 1. Beneficiaries enrolled in an MA plan must first request review by the MA organization. In FFS, beneficiaries first request review by the claims processing contractor that made the initial coverage decision.2. For MA, if the adverse determination is affirmed, the issues must be automatically reviewed and resolved by an independent review entity, and for Medicare FFS, beneficiaries may request review by a qualified For beneficiaries in either FFS or managed independent contractor.care, this is the earliest opportunity for their claim to be reviewed by a different entity than the one that made the original determination. 3. If the independent entity affirms the adverse determination, MA and FFS beneficiaries have the right to request a hearing before an administrative law judge (ALJ) in the Department of Health and Human Services if the amount remaining in controversy—the projected value of denied services or a calculated amount based on charges for services provided—is above a specified level. 4. MA and FFS beneficiaries who are dissatisfied with the ALJ hearing decision may request review by the Medicare Appeals Council. 5. MA and FFS beneficiaries may request judicial review by a U.S. district court of a decision by the Medicare Appeals Council if the amount in controversy is above a specified level. 42 C.F.R. §§ 405.1100, 422.608. The Medicare Appeals Council undertakes a de novo review and may issue a final decision, dismiss the appeal, or remand the case to the ALJ with instructions for rehearing the case. Medicare FFS beneficiaries may also request this review if the ALJ dismissed their case or failed to issue a timely decision. There are no federal Medicare requirements that benefits continue during the appeals processes for either managed care or FFS, nor do federal law and regulations require that FFS or MA beneficiaries receive personal assistance, including assistance from a care coordinator or other specialist, when navigating the appeals process. However, there are certain protections incorporated into the appeals process that are designed to assist Medicare beneficiaries. For example, Medicare beneficiaries may appoint a representative to assist them with an appeal. Beneficiaries also may seek assistance through the Office of the Medicare Beneficiary Ombudsman, which is responsible for resolving inquiries and complaints for all aspects of the Medicare program, through the 1-800-MEDICARE help line. States can structure their Medicaid appeals processes within the parameters of federal requirements. Medicaid FFS beneficiaries must have access to a fair hearing before a state agency for certain actions, including when benefits are terminated, suspended, or reduced. Once a final agency decision is made, Medicaid FFS beneficiaries may request a judicial review of the decision if permitted under state law. Beneficiaries in Medicaid managed care plans must have the ability to appeal a termination, suspension, or reduction of a benefit to the plan as well as have access to a state fair hearing. States determine whether beneficiaries must first exhaust their appeal to their Medicaid managed care plans before they may request a state fair hearing. During these appeals, benefits generally must continue in certain circumstances. Benefits generally must continue until a final agency decision is made if the beneficiary is mailed a notice of action and files an appeal before the date of the action. As in Medicare, neither federal regulations nor law require that beneficiaries in Medicaid FFS have access to personal assistance in navigating the appeals process. States, however, have the option of providing this assistance to FFS beneficiaries. For beneficiaries in Medicaid managed care, plans must give beneficiaries assistance with completing appeal forms and taking other procedural steps, including providing interpreter services and toll-free numbers for assistance. The appeals processes in the states that we reviewed varied, for instance as to whether a beneficiary in managed care has to appeal to his or her managed care plan first. For example, Arizona requires beneficiaries to first appeal to their managed care plan before requesting a state fair hearing. In contrast, Minnesota allows beneficiaries to request a state fair hearing without first appealing to their managed care plan. Dual-eligible beneficiaries in Minnesota may also request help from the state ombudsman, and county boards are required to designate a coordinator to assist the state Medicaid agency, including coordinating appeals with the ombudsman. See appendix II for a more detailed summary of these consumer protection requirements across programs, payment systems, and selected states. CMS and states used compliance and enforcement actions that ranged from informal written notices to contract terminations in order to help ensure MA organizations and Medicaid managed care plans complied with consumer protection requirements. CMS used both compliance and enforcement actions to bring noncompliant MA organizations into compliance with federal requirements. Compliance actions are intended to prompt managed care organizations to address issues of noncompliance, such as the timing of disenrollments, whereas enforcement actions impose a penalty on a managed care organization and are taken to address more significant violations. According to CMS, the nature of each violation is considered when determining the appropriate compliance or enforcement action and the actions generally proceed through the process in a step-by-step manner before enforcement actions are taken. CMS takes compliance actions against MA organizations to address violations that are identified during the agency’s monitoring and auditing activities. According to agency guidance, compliance actions are appropriate when the MA organization: (1) demonstrates sustained poor performance over a period of time; (2) has a noncompliance issue that involves a large number of beneficiaries; or (3) does not meet its contractual requirements. The lowest-level compliance action is a notice of noncompliance, which may be an e-mail from a CMS contract manager to a managed care plan stating that an aspect of the program is out of compliance. The notice of noncompliance requests the plan respond with how it will address the problem and may be followed by a warning letter from CMS that identifies a limited and quickly fixable issue of noncompliance that requires immediate remedy. If CMS determines that the noncompliance affects multiple beneficiaries and represents an ongoing or systemic inability by the plan to adhere to Medicare requirements, CMS will send a formal letter to the MA’s chief executive officer stating the concern and requiring the organization to develop and implement a corrective action plan (CAP). The CAP must address the deficiencies identified by CMS, provide an attainable time frame for implementing corrective actions, and devise a process for the managed care organization to validate and monitor that the corrective actions were taken and remain effective. Between January 1, 2010, and June 30, 2012, CMS took 546 compliance actions generally related to consumer protection requirements of importance to dual-eligible beneficiaries. (See table 1.) These issues of noncompliance that could potentially affect dual-eligible beneficiaries were identified during CMS’s ongoing oversight activities, analysis of plan deliverables, and complaints made by beneficiaries or providers. Of these 546 actions, 386, or 70 percent, were due to marketing issues.sent notice of noncompliance or warning letters for marketing issues related to misrepresentation of requirements for enrollment and use of unapproved marketing materials. CMS The three states we reviewed used similar sequences of actions to identify and address issues of noncompliance by their Medicaid managed care plans. State officials reported that when noncompliance issues are suspected they first notify the plans and give them an opportunity to remedy the problem. Subsequent deficiencies may require a Medicaid managed care plan to initiate a corrective action plan that the state would monitor to assure the appropriate changes are made. Between January 1, 2010, and June 30, 2012, the three states reported they took a total of 157 compliance actions against their Medicaid managed care plans. These actions ranged from sending warning letters, issuing notices to cure, requiring CAPs, and imposing financial penalties.common action taken by the states was to require a managed care plan to implement a CAP. The reasons that states required Medicaid managed care plans to institute CAPs during the reporting period varied. California and Minnesota identified noncompliance with the appeals and grievance process that required corrective actions.take corrective actions to ensure beneficiaries were able to access appropriate translation services. The majority of the CAPs required by Minnesota’s Medicaid office dealt with plan management of beneficiary appeals and grievances. Arizona required CAPs to address the use of unapproved marketing materials. After appeals, the next most frequent reason states requested CAPs on consumer protection requirements was to address problems regarding beneficiaries’ access to providers, services, or drugs. Figure 2 illustrates the reasons why Medicaid managed care plans were required to implement a CAP for the 91 CAPs issued during the period. We received written comments on a draft of this report from the Department of Health and Human Services, which are reprinted in appendix III, and technical comments, which we incorporated as appropriate. The department noted that the report was an accurate assessment of the programs we reviewed, and added that the Medicare- Medicaid Coordination Office has already made some progress aligning the requirements between the two programs in the area of appeals. CMS has developed a revised Notice of Medicare Denial of Coverage (or Payment) that includes optional language to be used in cases where a Medicare health plan enrollee also receives full Medicaid benefits that are being managed by the Medicare health plan. The revised Notice of Medicare Denial of Coverage (or Payment) is under review as part of the approval process. We will send copies of this report to the Administrator of CMS and interested congressional committees. We will also make copies available at no charge on GAO’s website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7114 or KingK@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IV. In Arizona’s Medicaid program, called the Arizona Health Care Cost Containment System, nearly all Medicaid beneficiaries, including dual- eligible beneficiaries, are enrolled in the acute care managed care program for Medicaid benefits. Individuals requiring long-term supports and services are enrolled in a separate long-term care managed care program. Both managed care programs operate under a section 1115 demonstration waiver. As of January 2012, Arizona had about 110,000 dual-eligible beneficiaries enrolled in Medicaid managed care, and over 1.3 million total Medicaid beneficiaries. California’s Medicaid system, called Medi-Cal, includes 28 counties with only a fee-for-service (FFS) system and 30 counties with one of three different managed care programs. Of the managed care options, the first is a county-operated health system, which requires nearly all Medicaid beneficiaries in participating counties, including dual-eligible beneficiaries, to enroll in a plan operated by the county. The second is the Two-Plan model, which has a commercial plan and a Local Initiative Health Plan—a public agency that is independent of the county. In the third program, called Geographic Managed Care, several commercial plans are offered as choice for beneficiaries. In both the Two-Plan and Geographic Managed Care programs, most Medicaid beneficiaries in the county are mandatorily enrolled in a managed care plan, but dual-eligible beneficiaries are in FFS unless they enroll voluntarily into one of the health plans. California officials reported that, as of June 2012, 26 percent of California’s approximately 1 million dual-eligible beneficiaries are enrolled in managed care, while the remaining 74 percent of dual-eligible beneficiaries are in FFS. In Minnesota, dual-eligible beneficiaries who are 65 years old and older are required to enroll in a managed care program called Minnesota Senior Care Plus (MSC+). As of June 2012, about 10,500 dually eligible beneficiaries 65 and older in Minnesota are enrolled in MSC+. Alternatively, dual-eligible beneficiaries 65 and older may choose to enroll in the Minnesota Senior Health Options (MSHO) program. Unlike MSC+ plans, MSHO plans are Medicare special needs plans that also have contracts with the state for the Medicaid benefits package, which enables the plans to integrate Medicare and Medicaid financing and services for dual-eligible beneficiaries. About 35,700 dually eligible beneficiaries 65 and older in Minnesota are enrolled in a MSHO plan. Dual-eligible beneficiaries age 18 to 64 who have a disability are enrolled in the state’s Special Needs Basic Care managed care program if they do not opt into Medicaid FFS. As of July 2012, about 39,000 of the state’s disabled population (both dual-eligible beneficiaries and non-dual-eligible beneficiaries) are enrolled in Special Needs Basic Care. More than 21,000 of these disabled beneficiaries were dual-eligible beneficiaries. According to Minnesota Medicaid officials, as of June 2012, almost 14 percent, or about 114,500, of Minnesota’s Medicaid population are dual-eligible beneficiaries, and 59 percent of the state’s dual-eligible beneficiaries are enrolled in managed care. According to North Carolina Medicaid officials, North Carolina primarily operates its Medicaid program through a primary care case management (PCCM) program, called Carolina Access. Under the PCCM program, primary care providers are paid on a FFS basis, in addition to receiving a monthly fee for certain care coordination activities. The state’s enhanced PCCM program, called Community Care of North Carolina, includes 14 networks of primary care providers that are responsible for an enhanced set of care coordination activities. According to North Carolina Medicaid officials, dual-eligible beneficiaries are assigned a primary care provider in one of the 14 networks, but they may opt out of the program if they choose a healthcare provider outside of the state’s Medicaid program. As of June 2012, according to state officials, about 13 percent of the state’s Medicaid population was dually eligible for Medicare and Medicaid and almost 68 percent of dual-eligible beneficiaries in the state were enrolled in the state’s PCCM program. Table 3 describes selected consumer protection requirements for Medicare and Medicaid fee-for-service (FFS), and table 4 describes selected consumer protection requirements for Medicare Advantage (MA) and Medicaid managed care. In addition to the contact named above, Randy DiRosa (Assistant Director), Lori Achman, Anne Hopewell, Lisa Motley, Laurie Pachter, Pauline Seretakis, Lillian Shields, and Hemi Tewarson made key contributions to this report.

Summary: Dual-eligible beneficiaries are low-income seniors and individuals with disabilities enrolled in Medicare and Medicaid. In 2010, there were about 9.9 million dual-eligible beneficiaries. Both programs have requirements to protect the rights of beneficiaries. These requirements are particularly important to dual-eligible beneficiaries, who must navigate the rules of both programs and generally have poorer health status. To help inform efforts to better integrate the financing and care for dual-eligible beneficiaries, GAO (1) compared selected consumer protection requirements within Medicare FFS and Medicare Advantage, and Medicaid FFS and managed care, and (2) described related compliance and enforcement actions taken by CMS and selected states against managed care plans. GAO identified consumer protections of particular importance to dual-eligible beneficiaries on the basis of expert interviews and literature, including protections related to enrollment, provider networks, and appeals. GAO reviewed relevant federal and state statutes, regulations, and policy statements, and interviewed officials from CMS and four states selected on the basis of their share of dual-eligible beneficiaries and use of managed care (Arizona, California, Minnesota, and North Carolina). GAO analyzed data on compliance and enforcement actions in Medicare Advantage and Medicaid managed care from January 1, 2010, through June 30, 2012. Medicare and Medicaid consumer protection requirements vary across programs, payment systems--either fee-for-service (FFS) or managed care--and states. Within Medicare, enrollment in managed care through the Medicare Advantage (MA) program must always be voluntary, whereas state Medicaid programs can require enrollment in managed care in certain situations. For example, Arizona requires nearly all beneficiaries, including dual-eligible beneficiaries, to enroll in managed care, but in North Carolina all beneficiaries are in FFS. In addition, Medicare and state Medicaid programs require managed care plans to meet certain provider network requirements to ensure beneficiaries have adequate access to covered services. For example, MA plans in rural counties must have at least one primary care provider per 1,000 beneficiaries. Subject to federal parameters, states establish network requirements for their Medicaid programs. For example, in California every plan must have at least one primary care provider per 2,000 beneficiaries. Finally, Medicare and Medicaid also have different appeals processes that do not align with each other. The Medicare appeals process has up to five levels of review for decisions to deny, reduce, or terminate services, with certain differences between FFS and MA. In Medicaid, states can structure appeals processes within federal parameters. States must establish a Medicaid appeals process that provides access to a state fair hearing and Medicaid managed care plans must provide beneficiaries with the right to appeal to the plan, though states can determine the sequence of these appeals. For example, Arizona requires beneficiaries to appeal to the managed care plan first, while a beneficiary in Minnesota may go directly to a state fair hearing without an initial appeal to the managed care plan. Both the Centers for Medicare & Medicaid Services (CMS), the agency that administers the Medicare program and oversees states' operation of Medicaid programs, and states took a range of compliance and enforcement actions to help ensure that MA and Medicaid managed care organizations complied with their consumer protection requirements. Between January 1, 2010, and June 30, 2012, CMS took 546 compliance actions against MA organizations on the issues GAO identified as generally related to consumer protections of particular importance to dual-eligible beneficiaries. Compliance actions included notices, warning letters, and requests for corrective action plans (CAP). During the same period, CMS took 22 enforcement actions against MA organizations, including the imposition of 17 civil money penalties--nearly all for late or inaccurate marketing materials. For five serious violations, CMS suspended enrollment into the MA plan and suspended the MA plan's ability to market to beneficiaries. Similarly, states used notices, letters, fines, and CAPs to improve Medicaid managed care plan compliance with Medicaid consumer protection requirements. During the same period, Arizona, California, and Minnesota required managed care plans to undertake 91 corrective action plans, 52 percent of which related to problems with plans' appeals and grievances processes. In commenting on a draft of the report, the Department of Health and Human Services noted that the report was an accurate assessment of the programs we reviewed.