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Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

CMS Issues Guidance for Organizations Interested in Offering Capitated Financial Alignment Plans

February 3, 2012—The Centers for Medicare and Medicaid Services (CMS) Jan. 25 issued Guidance for Organizations Interested in Offering Capitated Financial Alignment Demonstration Plans. This guidance provides detailed information on the plan proposal and application process for the demonstration program put forth July 8, 2011, in a letter to State Medicaid Directors [see Washington Highlights, July 15, 2011].  CMS laid out demonstration parameters in that letter and reiterated them in Appendix 1 of the Jan. 25 guidance, along with a comparison to federal Medicaid and Medicare requirements.

Under the three-year demonstration, to be run through the Center for Medicare and Medicaid Innovation (CMMI), two models will be tested: a capitated approach to integration of care for dual eligibles and a managed fee-for-service (FFS) approach.  This guidance focuses on the capitated approach, wherein CMS and the state will enter into a three-way contract with selected health plans to provide a range of benefits to dual eligibles.  Participating plans will receive a capitation rate; this rate must provide upfront savings to both CMS and the state or the demonstration will not go forward.  Rates for participants will be developed by both the state and CMS based on baseline spending in both programs and anticipated savings from care management and integration.

States were required to submit a Letter of Intent (LOI) by Oct. 1, 2011.  Thirty-eight states and the District of Columbia submitted LOIs.  Interested organizations, defined in this document as health plans or other qualified entities, must now submit a Notice of Intent to Apply (NOIA) by April 2.  While non-binding, only those organizations that have submitted an NOIA will be able to move forward in the process.  Interested organizations must submit a separate NOIA for each state in which they intend to apply.  Various selection activities will go on throughout 2012 and Jan. 1, 2013 will be the enrollment effective date for organizations offering both demonstration and non-demonstration plans.

Further guidance will be offered through sub-regulatory vehicles, including the CY 2013 Draft and Final Call Letters.

Contact:

Jane Eilbacher
Policy and Regulatory Specialist
Telephone: 202-828-0896
Email: jeilbacher@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org