State proposals for integrating care and funding provided to dual-eligible beneficiaries would change service delivery to “various forms of managed care models” and use “capitated methods to pay their integrated care entities,” said an August report from the Kaiser Commission on Medicaid and the Uninsured, which summarized each of the proposals.
Last April, CMS awarded 15 states $1 million each to develop proposals for integrating Medicare and Medicaid care and funding for dual eligibles. While the design phase will continue through April 2012, states were required to submit brief preliminary proposals to the agency.
The 44-page Kaiser report examines these proposals collectively and individually, noting that at least some of the final designs will incorporate a later CMS invitation issued to all states to test a capitation or managed fee-for-service integration model. In the preliminary proposals, Kaiser found provisions that were common across the plans, along with those that were unique to a particular state.

Service Delivery

States proposed various managed care models for service delivery, including risk-based and non-risk-based, and said they would explore different models in geographic regions or for different subpopulations, Kaiser reported.
Tennessee and Wisconsin proposed using private risk-based managed care organizations to provide services in exchange for capitated payments; California proposed using county-managed care plans; Vermont would use the state Medicaid agency as its managed care organization for dual eligibles; and five states would use other models of care delivery, such as accountable care organizations, integrated networks, and primary care case management. Five states proposed a variety of entities, including managed care, direct provider networks, ACOs, and medical homes.
Many states—including Colorado, Massachusetts, Oregon, North Carolina, Vermont, Washington, and Wisconsin—said they would extend the proposed delivery systems beyond dual eligibles to their wider Medicaid populations.


Several states proposed that Medicare funds flow through the state to integrate payments with Medicaid dollars. States “varied in the extent to which they specified how Medicare payments to the state would be determined and whether they intended to share savings” linked to the new models, the report said. None of the proposals defined the level of Medicaid payments that would be paid per enrollee.
Most states said they would use capitated payments for plans and providers, and some states indicated they would share savings with these entities, Kaiser reported.
Five states—California, North Carolina, Oregon, South Carolina, and Washington—never mentioned Medicare, while other states were more specific about how integration would occur. Vermont proposed becoming a Medicare managed care entity, negotiating with the program for capitated payment. Michigan and Wisconsin proposed receiving Medicare risk-adjusted, capitated payments from CMS, while Massachusetts suggested receiving an amount “equal to what Medicare would have spent on the dual eligibles absent any savings created by the new model.”