Upcoming Washington State Duals Demo Offers Insight On Managed FFS Model

by InsideHealthPolicy.com

Washington state will likely be the first state to sign a memorandum of understanding with CMS on a duals demonstration that uses the managed fee-for-service model, a CMS official said, and a Washington state official outlined its plans for that demo on Monday (Oct. 15) at conference in Baltimore sponsored by the National Association for State Health Policy. Stakeholders interested in the managed fee-for-service model are closely watching the Washington MOU to get an idea of what CMS expects from that approach, and the CMS official said one of the standout aspects of the state's proposal is its tool for predicting which residents are at high risk of developing costly conditions so the state can intervene early.

Massachusetts was the first state to sign an MOU, but that state is using the more popular capitated model to care for residents who are eligible both for Medicaid and Medicare. Of the 25 states pursuing the duals demonstration, six plan to use the managed fee-for-service model.

Washington has proposed using the capitated approach in three of its urban counties and the managed fee-for-service model in rural areas, said MaryAnne Lindeblad, director of the Washington Health Care Authority. Lindeblad said it's more difficult to use the capitated model in rural areas. Washington's proposal does not cover the entire state initially, but the state law that created the demonstration proposal allows for expanding the fee-for-service approach state-wide, excluding the urban areas in which the capitated approach is being proposed, Lindeblad said. She estimated that about half of the state's dually eligible beneficiaries will be in the demonstration by the end of the three-year demonstration,

The state's fee-for-service portion relies on the health homes, an approach which allows the state to receive a 90 percent match from the government during the first two years of the program. The health homes will be available to both Medicaid-only beneficiaries and to duals enrolled in the fee-for-service and capitated models. Residents must have a chronic condition listed in section 2703 of the Affordable Care Act to be eligible for the demo.

The state plans to begin enrollment in the second quarter of 2014, and it has not yet qualified the health home entities, Lindeblad said. The state is looking for organizations that can target interventions that the diverse duals' population needs, including long-term services and substance abuse services, and that can work across the silos in Medicaid and Medicare. Health home coordinators partner with beneficiaries and their families, doctors and other agencies to coordinate care. Health homes must be linked to community and social supports and must coordinate medical and behavioral care.

The state has finished writing the requirements for becoming health home entities and will ask for applications next month. It's planning to phase in health homes among the seven health home network coverage areas that it has defined.

Key to the success of the health homes is a tool, called PRISM, that Washington has developed to identify people who are more likely to develop conditions that are difficult and expensive to care for, a CMS official said. PRISM spots patterns of increasing use of services that indicate which patients need to be contacted so health care providers can intervene before a condition gets out of control. Health homes will use PRISM to target these residents and keep them out of hospitals and other facilities, such as nursing homes. For example, the health homes will help residents develop self-management goals and the health homes will be the single point of entry into the health care system for these beneficiaries.

Although PRISM is unique to Washington, other states could adopt PRISM and similar tools are available commercially, the agency official said.

About a year ago, CMS began feeding states Medicare data -- Part A, Part B and Part D -- and that data has helped the states immensely in predicting which patients need preventative services, the CMS official said. Part D made data collection more difficult for states because they no longer had pharmacy claims information, which was a way to know who they were serving and the conditions they have.

As with other states, Washington's proposal calls for withholding 1 percent of payments to health plans in the first year, followed by 2 percent and 3 percent withholds in following years, that the plans can earn back by meeting quality goals. Those goals are mostly process measures in the beginning, and outcomes measures will be used in later years of the demo. -- John Wilkerson ( jwilkerson@iwpnews.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

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