Just before Thanksgiving, Washington became the eighth state to sign a Memorandum of Understanding (MOU) with the Centers for Medicare and Medicaid (CMS) for a capitated financial model to integrate care for Medicare-Medicaid beneficiaries (dual eligibles). Washington is also pursuing a separate managed fee-for-service dual eligible demonstration – already underway in the rest of the state – that builds on its health home model.

The MOU sets forth parameters that will eventually lead to three-way contracts between the federal government, the state and the health plans selected to provide Medicare and Medicaid benefits to dual eligibles. In the capitated financial model, Medicare and Medicaid contribute shares – apportioned by formula – to prospective blended payments made to the contracted health plans. The plans are then responsible for managing the delivery of comprehensive integrated care to their dually eligible members. The capitated managed care model will be implemented in only two Washington counties—King and Snohomish—in which about 27,000 dual eligibles qualified to enroll reside.

The MOU contains many provisions that are steps in the right direction, but in some areas there is cause for concern and, as has been the case with other states’ MOU, many important details are left to be resolved in the three-way contract. While the evaluative points made below are specific to the Washington capitated model MOU, they touch upon many of the recurring key substantive areas that Voices for Better Health state partners focus on as they work to help shape and see implemented the strongest possible dual demonstration projects in each of their states. Here are some of the key provisions in the Washington MOU:

Enrollment: The demonstration is set to begin on July 1, 2014 with a short voluntary enrollment period, allowing beneficiaries in the two counties to opt-in to the program and choose a plan. However, only two months later, the state will begin passively enrolling beneficiaries, who would need to formally opt-out if they were to decide they do not want to be in the demonstration. Fortunately, the state’s Area Agencies on Aging and other community-based non-profit organizations are gearing up to offer independent enrollment assistance and options counseling.

Consumer Engagement: Each plan is required to establish, and meet regularly with, an independent Enrollee Advisory Committee that would provide input on program management and care delivery. The committee must reflect the diversity of the membership, giving all stakeholders – including enrollees, caregivers and community-based organizations – a chance to be involved in the process. The MOU also indicates, as a part of the quality withhold measures, the possibility of health plans including consumers on governing boards, but the details are very vague. To make consumer engagement meaningful, we recommend, for example, that plans actively work to address barriers to participation by taking concrete steps, such as providing transportation to meetings and offering interpreters, whenever needed.

Financing: The savings expectations in Washington are slightly lower than in most other dual demonstration states. Still, without adequate evidence to support these upfront savings expectations, we worry that they put undue financial pressure on plans and place beneficiaries at unnecessary risk. While we are pleased the state has set rating categories that account for the complexity of the population, it does not plan to use other important means – risk corridors and reinsurance – to reduce the risk to beneficiaries. One silver lining in this section is that the Medical Loss Ratio (MLR) is set at 90 percent, which is a good consumer protection. 

Assessment Process: The plans will be expected to conduct up to five different screenings to determine an enrollee’s health status and level of need, a process that seems quite intense for the enrollee. The MOU is unclear about who will be conducting the screenings and whether that person is required to have expertise in long-term services and supports (LTSS) – credentials we strongly believe are necessary to fully understanding an enrollee’s needs. While the state requires annual health risk assessments to be done in person, it would be better to require that all assessments be done in person.

Care Coordination: Based on complexity of needs, enrollees are assigned to one of three tiers. Each enrollee has an interdisciplinary team and a say in determining the members of that team. Care managers are assigned for tiers 1 and 2; for tier 3, an intensive care coordinator is assigned and responsible for coordination that requires face-to-face interactions. Team members must have competency in person-centered planning, cultural competence, independent living, wellness and recovery principles, disability, and accessibility.

Long Term Services and Supports: For nursing homes, assisted living and adult family homes, the transition period is 180 days and for all other LTSS services, 90 days. While these transition periods are shorter than we would like – a year would be preferable – we are pleased that single-case agreements will be offered to out-of-network nursing homes, assisted living and adult family homes after the transition period is over. Finally, enrollees have the option of self-directing their own personal care services.

Quality Measurements: Like most other MOU, most of the demonstration’s quality measures are medically-oriented and are process, rather than outcome, measures. For accountability and the chance to make improvements, quality measures should be established that take into account the enrollee’s experience and quality of life.

Ombudsman Program: The establishment of a new ombudsman program is an important protection. The ombudsman will independently advocate on behalf of dual eligibles enrolled in the demonstration and support their access to person-centered care in the community.

Health Equity: Plans are required to comply with the Americans with Disabilities Act (ADA); we are also glad that the care team will be trained on accessibility and accommodation, independent living and recovery models, cultural competency and wellness philosophies. However, we hope the three-way contract provides more detail about how plans will be held accountable for providing the trainings and conducting audits of providers to ensure compliance with ADA.

With the ambitious undertaking of two demonstration designs, Washington has some challenges ahead. The MOU is a good start, providing some beneficiary protections and beginning to addresses health equity in several important ways. We look forward to working with our Washington State Voices for Better Health partners, CMS, and the state in the readiness review process and the creation of the three-way managed care contract.