Guidance for Organizations Interested in Offering Capitated Financial Alignment Demonstration Plans

1. Guidance for Organizations Interested in Offering Capitated Financial Alignment Demonstration Plans Medicare-Medicaid Coordination Office Vanessa Duran, Senior Technical Advisor Marla Rothouse, Senior Technical Advisor April 2012

2. Overview • Capitated Financial Alignment Demonstration Background – Vanessa Duran • Overview of March 29, 2012 Plan Guidance Memorandum – Vanessa Duran • Overview of Demonstration Plan Application – Marla Rothouse • Next Steps and Resources for Additional Information – Marla Rothouse

3. Capitated Financial Alignment Demonstration Background Medicare-Medicaid Coordination Office Section 2602 of the Affordable Care Act • Purpose: Improve quality, reduce costs, and improve the beneficiary experience • Ensure dually eligible individuals have full access to the services to which they are entitled • Improve the coordination between the federal government and states • Develop innovative care coordination and integration models • Eliminate financial misalignments that lead to poor quality and cost shifting

4. Capitated Financial Alignment Demonstration Background • Goal: To increase access to seamless, fully integrated care programs for Medicare-Medicaid enrollees • Capitated Model: Three-way contract among State, CMS and health plan to provide comprehensive, coordinated care in a more cost-effective way • Information about the Financial Alignment Initiative: http://cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.html • July 8, 2011 CMS State Medicaid Director Letter • January 25, 2012 CMS Memorandum • March 29, 2012 CMS Memorandum • Capitated Financial Alignment Demonstration Plan Application

5. Overview of Plan Guidance - Medicare Past Performance Information • Organization is ineligible for participation if under Medicare sanction • Conditions on enrollment will be applied to demonstration applicants affiliated with a current Medicare contractor that is considered a past performance outlier using two CMS methodologies: • Past Performance Review Methodology • “Low performing icon” on Medicare Plan Finder

6. Overview of Plan Guidance - Medicare Past Performance Information • Conditions on enrollment apply until organization is no longer a Medicare past performance outlier • A past performance outlier can: • Retain current enrollees from a Medicare or Medicaid managed care plan • Enroll beneficiaries who voluntarily elect a demonstration plan • A past performance outlier cannot: • Accept new passively enrolled beneficiaries

7. Overview of Plan Guidance - Joint Plan Selection Process • Joint CMS/State plan selection process using State-based selection vehicles • The following detail the process of establishing qualifications to participate from a Medicare perspective: • January 25, 2012 guidance memorandum • March 29, 2012 guidance memorandum • Capitated Financial Alignment Demonstration Application • States will have HPMS access to plan selection documentation submitted by demonstration plan applicants

8. Overview of Plan Guidance - Medicare Components of the Plan Selection Process • CMS’ plan selection process includes approval of: • Integrated formulary • April 30 – New formulary submissions • May 14 – Formulary crosswalk requests • June 8 and June 15 – Supplemental formulary file submissions • Demonstration application: May 24, 2012 • Unified model of care: May 24, 2012 • Medication therapy management program: May 25, 2012 • Integrated plan benefit package: June 4, 2012

9. Overview of Plan Guidance - Integrated Formulary Submission • Formulary must be consistent with Part D and Medicaid drug coverage requirements • Base formulary submission • Supplemental formulary files: • CMS required supplemental files, including for excluded Part D drugs and Part D OTC drugs: June 8, 2012 • Additional Demonstration Plan Drug File: June 15, 2012

10. Overview of Plan Guidance - Demonstration Plan Application Components of the application: • Part D requirements • Part D and Medicare medical service network adequacy requirements • Model of care • Documentation demonstrating State licensure and solvency, and CMS fiscal soundness requirements • Administrative and management information

11. Overview of Plan Guidance - Model of Care (MOC) Submission • MOC narrative will be: A unified document and reviewed by both CMS and States • MOC narrative must address: • 11 required elements of the Medicare Advantage Special Needs Plan (SNP) MOC framework • Additional State-required elements

12. Overview of Plan Guidance - Model of Care (MOC) Submission • CMS review of 11 MOC elements consistent with review of SNP MOC elements • CMS will coordinate joint CMS-State review process • Both CMS and the State must approve the final MOC

13. Overview of Plan Guidance - Integrated Plan Benefit Package (PBP) Submission • PBP must be consistent with: • Minimum coverage requirements under Medicare Parts A, B and D, and Medicaid • Any State-required demonstration-specific supplemental benefits • Cost sharing for Parts A and B-covered services must be $0 • Standard PBP software for MA plans has been modified to allow data entry for Medicaid-covered services • Both CMS and the States must approve final PBP

14. Overview of Plan Guidance - Key Training Dates

15. Overview of Demonstration Plan Application -General Information • Applications are only accepted through the CMS Health Plan Management System • Organizations will get a confirmation number as receipt of their submission • Technical assistance in the completion of the application is available at: MMCOcapsmodel@cms.hhs.gov

16. Overview of Demonstration Application Process - Key Dates • Application available in HPMS: April 12, 2012 • Application Training: April 17, 2012 • Applications Due: May 24, 2012 • Deficiency Notice Emails: Mid-June 2012 • Deadline to Request HSD Criteria Exception: July 2, 2012 • Application Determination Notices: July 30, 2012

17. Overview of Demonstration Application Process - Key Areas • Medicare Prescription Drug Plan Attestations • Pharmacy Networks • Medical Provider Networks • Administrative Contracts • Pharmacy and Medical Provider Contract Templates • Compliance Plan • Licensure and Solvency • Model of Care

18. Overview of Demonstration Application Process - Attestations • Prescription Drug Attestations: • Includes prescription drug benefit attestations • If Applicant believes an attestation is not applicable for purposes of the demonstration, the Applicant may provide a NO response (i.e., Bids, Premium Billing) • Medical Medicare Benefit Attestations: • Not included because many requirements in 42 CFR 422 may be modified based on the specifics of each State’s MOU with CMS

19. Overview of Demonstration Application Process - Pharmacy Networks • Applicants submit pharmacy lists for: • Retail pharmacy • Home Infusion • Mail Order • Long-Term Care • Indian Tribe and Tribal Organization, and Urban Indian Organization • CMS will automatically determine if Medicare network adequacy standards are met

20. Overview of Demonstration Application Process - Medical Provider Networks • Use of access criteria standardized by provider/facility type and geographic designation • Largely automated review • Maps are not required • Applicant will be able to request exceptions to access standard under limited circumstances (joint review with State)

21. Overview of Demonstration Application Process - Contracts and Templates • Administrative contracts - executed agreements for key Medicare functions identified in HPMS (i.e., claims adjudication, enrollment, credentialing) • Templates for distinct Medical Providers and distinct Pharmacy Providers • Must include required provisions provided in the Application appendices

22. Overview of Demonstration Application Process - Compliance Plan • Application is specific to Medicare Part D • Applicants should also refer to: • Draft of Chapter 9 of the Prescription Drug Benefit Manual and; • Chapter 21 of the Medicare Managed Care Manual

23. Overview of Demonstration Application Process - Licensure and Solvency • Applicants will be required to provide evidence of State licensure • Applicants will be required to provide evidence of fiscal soundness • Audited financial statements

24. Overview of Demonstration Application Process - Application Determinations • Letters will include the instructions for submitting a sampling of signature pages to validate the medical provider network as part of the Readiness Review • Readiness Reviews are scheduled to begin in early August 2012

25. Next Steps • Organizations should continue to monitor State activity on their demonstration proposals, including posting for public comment and stakeholder input processes • Additional bid-related guidance for non-demonstration MA and PDP contracts to be provided separately

26. Resources for More Information • Financial Alignment Initiative: http://cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialModelstoSupportStatesEffortsinCareCoordination.html • New MMCO mailbox for questions about the Capitated Financial Alignment Demonstration: MMCOcapsmodel@cms.hhs.gov