Last month, Washington became the second state to sign a Memorandum of Understanding (MOU) with the Centers for Medicare and Medicaid (CMS) to participate in a duals demonstration project. Washington is pursuing a managed-fee-for-service financial model unlike the Massachusetts MOU, which is working on a capitated financing model. The demonstration is expected to be implemented in all but two counties, where it will pursue the capitated financing model.

Under the MOU, Washington will build on its Medicaid Health Homes plan by targeting Medicare-Medicaid enrollees (dual eligibles) with chronic health conditions. The state will contract with a Health Home Lead Entity who will in turn subcontract with a Health Home Coordinated Care Organization (HCCO). The HCCO is paid to provide care coordination services that complement the existing fee-for-service system. Under this managed fee-for-service model Washington will be eligible to receive a payment based on its performance on beneficiary experience, quality and savings criteria.

The MOU provides state advocates with greater detail about how the demonstration will work in Washington. For other states pursuing a managed fee-for-service model it provides some insight into what they can expect in their MOU negotiations and final agreements.

The Washington demonstration has many positive features that have been reflected in the final MOU, such as:

  • • The state will be responsible for creating accessible and understandable outreach and education materials for enrollees.
  • • The state will have to require providers to demonstrate their compliance with the Americans with Disabilities Act (ADA) and require training for providers on accessibility, accommodations, independent living and recovery, and wellness philosophies
  • • CMS and Washington will hire an independent evaluator to compare a similar group of dual eligibles from a non-demonstration state to the enrollees in Washington’s demonstration group to see how effectively the demonstration is working to improve care and lower costs.

While the MOU reflects many of the consumer concerns, there are provisions that raise red flags for advocates and beneficiaries.

  • • The MOU was silent on how consumer engagement will work at both the state and delivery system levels. While the state has established a state-level Health Advisory Team (HAT), it remains unclear if the HAT is an effective vehicle for taking in consumer and advocates’ feedback. The MOU also states that the Health Home networks will be required to ensure beneficiary input and involvement, however it lacks sufficient details on how this will actually happen.
  • • For many advocates, the health home model as described in the MOU is confusing. Advocates have asked the state to simplify the model to ensure beneficiaries understand how the new delivery system will work and to be specific about model details to ensure transparency throughout the readiness review and contracting process.
  • • Many of the health home lead entities that will be chosen will be managed care organizations that may not have sufficient expertise to provide high level care coordination to dual eligibles.

The MOU is not the final contract; the state will be finalizing a Final Demonstration Agreement. In the meantime, advocates are posing many questions to the state to better understand the plan and are working together both on this MOU as well as the upcoming negotiations between the two counties, the state and CMS.

While there are positive aspects to the Washington MOU, advocates in other states must go beyond what is proposed here and set the bar even higher. The success of these demonstration projects will rest on ensuring the right implementation and oversight structures are in place for ongoing consumer input and transparency throughout these demonstration projects.

 — Leena Sharma, State Advocacy Manager