January 26, 2016
The Honorable Orin G. Hatch
Chairman
Committee on Finance
United States Senate
The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate
The Honorable Johnny Isakson
Committee on Finance
United States Senate
The Honorable Mark Warner
Committee on Finance
United States Senate
Dear Chairman Hatch, Ranking Member Wyden and Senators Isakson and Warner:
We applaud your ongoing leadership of the Senate Finance Committee’s bipartisan Chronic
Care Working Group. We believe your December 2015 options paper outlines many
opportunities to improve how Medicare treats enrollees living with multiple, complex chronic
illnesses, particularly those who are dually eligible for Medicare and Medicaid. Beyond the dual
eligible population, we also recognize that future federal policy initiatives are likely to have
important implications for states’ value-based purchasing initiatives and the work we are doing
with federal partners to align care delivery practices and reimbursement.
The National Association of Medicaid Directors (NAMD) is a bipartisan organization which
represents Medicaid Directors in the fifty states, the District of Columbia, and the territories.
Medicaid programs are often the largest insurers in a state, with responsibility to provide
coverage for the sickest, frailest and most complex and costly patients in the country. To best
serve these populations, Medicaid Directors are reorienting the health care system to achieve
better care, better health and lower costs.
We appreciate the opportunity to comment on the options paper and are particularly interested
in the proposals specific to the Medicare-Medicaid dual eligible population. As of 2014, the
Medicare-Medicaid Coordination Office reported that more than 10.7 million Americans are
enrolled in both the Medicare and Medicaid programs. In their January 2016 data book focused
on dual eligible beneficiaries, the Medicare Payment Access Commission (MedPAC) and
Medicaid and CHIP Payment and Access Commission (MACPAC) reported that nearly threequarters of dual eligible beneficiaries were eligible for full Medicaid benefits. It is a well-known
fact that dual eligible individuals tend to be among the most expensive and chronically ill of all
patients.
States have decades of experience trying to manage and coordinate care to meet the needs of
their dual eligible members. Medicaid provides non-medical services that are so critical to
improving outcomes and the quality of life for dual eligible enrollees as well as lowering costs
for the overall system. The dual eligible population is particularly in need of thoughtful care
coordination strategies, which should help facilitate seamless access to appropriate services,
whether covered by Medicare or Medicaid. States are pursuing different pathways to continue
to make inroads towards this goal.
We appreciate all the work federal policymakers have done to date to develop, implement and
refine the demonstration programs for Medicare-Medicaid dual eligibles, including the
Financial Alignment Demonstration program with Medicare-Medicaid Plans (MMPs) and the
single alternative demonstration program focused on Medicare Advantage Dual Eligible Special
Needs Plans (D-SNPs). We continue to support the states that are currently involved in the
existing demonstration initiatives and states that may pursue alternatives in the future. We
anticipate that the forthcoming evaluations will shed light on effective practices and areas
where ongoing policy and operational changes will better serve the dual population.
State Medicaid agencies also have made significant inroads in aligning Medicaid and D-SNPs to
improve the experience of dual eligible individuals and simplify administrative functions.
About 1.7 million dually eligible beneficiaries are already served in D-SNPs under contracts or
agreements with states that are required by statute. These current contracts do not require
demonstration authority and thus are well suited to become a preferred pathway to achieve
meaningful improvements for beneficiaries. In fact, NAMD’s 2015 Operations Survey found
that over 20 states are in some form of planning or implementation or have already implemented
a D-SNP alignment initiative to drive greater clinical and financial integration for this
vulnerable population.
More progress has been made in the last three years than in the previous 47 years in addressing
the fragmented system design for the dual eligible population, but overall the progress has been
too limited and not enough flexibility has been provided by our federal partners in addressing
system complexities. The persistent barriers do not serve this population well. The result is an
indefensible and unsustainable patchwork of programs.
Below we respond to the D-SNP question posed in the options paper and other critical issues
pertaining to the care of the dual eligible population. Additionally, we refer you to the 2013
NAMD paper, “Advancing Medicare and Medicaid Integration: Improving the D-SNP Model
for Dually Eligible Beneficiaries.” The paper’s recommendations are based on the needs
identified by state leaders with extensive experience implementing integration initiatives with
D-SNPs and those who were exploring this pathway. While CMS’ Medicare-Medicaid
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Coordination Office has sought to work with states to address some of these issues, the vast
majority of the paper’s recommendations remain relevant for the Working Group’s focus.
Dual Eligible Special Needs Plans
We concur with the Working Group’s proposal that a long term extension of D-SNPs would
allow for greater planning of and investment in successful care models that D-SNPs provide to
dual eligible beneficiaries. As NAMD has written in the past, Congress’s current pattern of
short-term extensions has a chilling effect on states’ use and opportunity for evolving their DSNP integration initiatives. The D-SNP authority must reflect that Medicaid managed care for
dual eligibles members is not an “experiment” but instead has proven to be a success in many
states that have pursued this model.
In NAMD’s working paper, “Advancing Medicare and Medicaid Integration: Improving the DSNP Model for Dually Eligible Beneficiaries,” we identify issues for federal policymakers to
consider when setting the time period for transitioning to fully integrated plans as well as a
recommended pathway to accommodate building of infrastructure and transformation of
systems. We believe particular attention and consultation with states is needed around the
definition of an “integrated plan.” There is a continuum of state – and plan – readiness to move
towards fully integrated plans. Therefore, the definition of integrated plan must accommodate
the diversity across state Medicaid programs, a state’s underlying infrastructure and systems,
the capacity of plans and providers to make the transition, cultural context, and state statutes
and policies, which in some cases preclude integration required for designation as a Fully
Integrated Dual Eligible SNP (FIDE-SNP).
We recommend that Congress explicitly direct the Medicare-Medicaid Coordination Office
(MMCO) to establish a federal-state liaison opportunity for states seeking to utilize the D-SNP
pathway to improve care coordination for their state’s dual eligible population. The alternative
demonstration program underway in Minnesota is a testament to the value of such a liaison.
This dedicated resource has helped the state navigate Medicare regulations and identify
opportunities to align state Medicaid policies to improve the experience for dual eligible
individuals. Specifically, the enhanced federal-state communication is designed to simplify
information and processes about Medicare and Medicaid coverage for beneficiaries and their
families; better align federal and state oversight of the state’s D-SNP plans; improve
administrative efficiencies for the state’s plans and government agencies that serve the
enrollees; and avoid unnecessary duplication through a joint federal-state monitoring and
quality oversight process and a coordinated set of reporting requirements. We believe all states
should have the opportunity to work with CMS to achieve these improvements in their D-SNP
initiatives.
We seek Congressional leadership to ensure there is designated grant funding to support state
capacity-building around the D-SNP integration pathway. As previously noted, at least 20
states already use or are exploring the D-SNP platform to improve care coordination for dual
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eligible members and drive system integration. However, among these states, there is a wide
range of capacity and readiness to advance an integration initiative. For example, several are
first moving forward with implementation of Medicaid Managed Long-Term Services and
Supports (MLTSS), with future plans to drive enhanced integration through D-SNPs. Others
states with more mature state Medicaid-D-SNP contracting arrangements are poised to advance
their care coordination work pending additional federal support and flexibility. States could
utilize federal resources to develop or enhance their D-SNP integration strategy, work with
stakeholders, liaison with CMS and oversee implementation and ongoing administration. This
opportunity would be consistent with the planning grants available to the states which explored
the financial alignment demonstration initiative.
Enrollment Policies
States are strongly supportive of beneficiary choice in the context of Medicare and Medicaid
and many have implemented policies to ensure there is continuity of care for preferred
providers during transitional periods for enrollees. However, unlike all other Medicare
beneficiaries, dual eligible individuals can change enrollment in managed care plans or churn
between Medicare fee-for-service and Medicare Advantage at any point through the year, with
or without cause. This authority is wrongly perceived as a protection. A closer examination of
the real-world experience reveals this policy is more often disruptive and creates unnecessary
challenges to care coordination for providers, plans and members. The current policies arguably
will impede the Chronic Care Working Group’s goals around improving care for the dual
eligible population living with chronic conditions.
We acknowledge the concerns some policymakers and stakeholders have expressed with
modernizing enrollment policies for the dual eligible population. However, we believe federal
statute and regulations have failed to keep pace with the current landscape of enhanced
protections, options and services for dual enrollees.
It is time for Congress to establish a more appropriate balance between beneficiary protections
and the reality of what is needed to improve care coordination and consumer experiences. In
particular, federal and state partners should create a pathway for a single enrollment period
and mandatory Medicare enrollment policies for the dual eligible population that facilitate
improvements in access, quality and costs. It is plausible that these enrollment policy changes
would be contingent on states meeting certain assurances.
At a minimum, we ask that Congress consider the these first steps for improving coordination
for Medicare-Medicaid enrollees:

Establish equitable enrollment policies for all Medicare beneficiaries. Specifically, federal
policymakers should provide for only one enrollment period for all Medicare recipients,
including dual eligible members. The only exception to that should be dual demonstration
enrollment opportunities.
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
Provide authority for an enrollment stabilization period for dual eligibles enrolled in DSNPs and participating in demonstration programs operated in partnership between states
and CMS. As noted above, the ability of dual eligible individuals to change plans at any
point – every day, month, etc. – only leads to confusion for them and undermines the goal
for care coordination.

Provide flexibility for states and plans to conduct passive enrollment. Many states already
have a passive enrollment policy for certain populations in their Medicaid program. Passive
enrollment allows a state to automatically enroll a beneficiary in a plan chosen by the state
Medicaid agency unless – before the effective enrollment date – the beneficiary chooses to
enroll in a specific Medicaid plan. Many states require plans to authorize payment for a
non-network provider during the beneficiary’s transition period. In the case of Medicare
services for the dually eligible population, beneficiaries also currently can elect to remain in
original Medicare. CMS has explicitly permitted states to use passive enrollment in the
financial alignment demonstrations, though still with certain caveats.
While our request around passive enrollment would be a departure for Medicare, it is a
policy that has significant merit for the dual eligible populations. We believe federal
policymakers should extend this authority for states utilizing the D-SNP program to drive
person-centered care.

Address barriers which currently impede states and plans from implementing “seamless
conversion.” Seamless conversion is an optional enrollment mechanism offered by a
Medicare Advantage organization (MAO) that operates both Medicare and Medicaid (or
other non-Medicare) lines of business whereby it identifies and notifies individuals that the
MAO will convert their enrollment from the non-Medicare plan into the Medicare plan as of
the date they become eligible for Medicare for the first time. An MAO offering a D-SNP
must obtain CMS approval to seamlessly enroll newly Medicare-eligible individuals,
including those whose Medicare eligibility is based on disability as well as age. The MAO
must identify all newly eligible individuals at least 90 days prior to the date of initial
Medicare eligibility (i.e., the conversion date) and must send individuals advance notice of
the conversion opportunity at least 60 days prior to the conversion date.
States and plans have sought to use seamless conversion to improve provider continuity
and ease transitions for new dually eligible individuals. However, federal regulatory
restrictions with this policy and other challenges around access to timely data from CMS
have stifled implementation. States and plans have been unable to maximize the
opportunity that exists with seamless conversion.
States seek congressional intervention to ensure there is flexibility around the advance
notice requirement. Specifically, reducing notice to 30 days would allow states and plans to
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capture some of the individuals who are currently left out of this option because of the delay
in receipt of federal data.
Quality
We also want to make you aware that we are supportive of efforts to modify the Medicare Stars
quality rating system to more accurately reflect the unique characteristics of the dual eligible
population.1 We believe a rating system should acknowledge the additional needs of dual
enrollees and measure performance of integration and care coordination. Inaccurate or
inappropriate ratings will impede integration initiatives and could create confusion for dually
eligible individuals. We appreciate CMS’ current efforts to address this issue and hope
Congress will ensure sufficient resources are available to complete this much-needed work.
In addition, states are supportive of revisions to existing policies which ensure D-SNPs are not
unfairly penalized for serving all or a significant proportion of dually eligible individuals. States
seek enhanced transparency around the performance of plans serving dual eligibles. “Roll-up”
data which evaluates performance across the license of an MAO fails to provide sufficient and
useful information about the performance of the plans serving the dual population. This
impedes appropriate comparisons and evaluations by state Medicaid agencies.
Payment
We appreciate the rigorous analytical work CMS has undertaken to respond to concerns NAMD
and others raised regarding the accuracy of the CMS-Hierarchical Condition Category (HCC)
risk adjustment model as it relates to predicting the high costs for meeting the complex care
needs of the Medicare-Medicaid dual eligible population. We believe CMS is taking steps
towards payment equity for plans that exclusively or disproportionally serve dually eligible
beneficiaries. We appreciate Senators’ Hatch and Wyden’s bipartisan letter in response to the
CMS proposal to modify the risk model. Similarly, NAMD supports CMS’ proposal to revise
the structure of the risk adjustment model to address the under prediction.2
NAMD remains concerned, however, that the identified inaccuracies in the model pose an
immediate threat to the viability of the D-SNP marketplace. In turn this is undermining the
federal and state governments’ shared goals to incentivize the appropriate level of care for the
dual eligible population living with chronic conditions.
Therefore, in addition to implementing the revised HCC risk adjustment model for MedicareMedicaid plans (MMPs) in 2016, NAMD also called on CMS to apply the revised model for DSNPs as soon as practical but no later than 2017. We believe the revised model and additional
1
See NAMD’s March 6, 2015, response to CMS’ Medicare Advantage Call Letter, available here:
http://medicaiddirectors.org/publications/namd-supports-revising-medicare-risk-model/
2
Ibid. See also NAMD’s November 25, 2015, letter to CMS, available here:
http://medicaiddirectors.org/publications/namd-supports-revising-medicare-risk-model/
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refinements, as appropriate, will help ensure ongoing and robust participation of MMPs,
Medicare Advantage D-SNPs and Fully Integrated Dual Eligible SNPs (FIDE-SNPs).
Our association looks forward to assisting the Working Group as it advances policy options for
improving Medicare for individuals living with chronic illnesses. Should you have any
questions on our comments, please contact Andrea Maresca at
Andrea.Maresca@medicaiddirectors.org.
Sincerely,
Thomas J. Betlach
Arizona Health Care Cost
Containment System Director
State of Arizona
President, NAMD
John B. McCarthy
Director
Ohio Department of Medicaid
State of Ohio
Vice-President, NAMD
Enclosure:
NAMD Working Paper: Advancing Medicare and Medicaid Integration: Improving the D-SNP
Model for Dually Eligible Beneficiaries
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