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.