Acknowledgements  

This paper and companion policy brief is based on a public conference and closed-door expert convening held at Penn in July 2024 co-hosted by the Leonard Davis Institute of Health Economics at the University of Pennsylvania and Health Affairs (see Appendix A for participants and more about the process). The experts, who included beneficiaries, state and federal government officials, researchers, and managed care plan leaders, provided insight into how to improve access to and enrollment in integrated care for people eligible for full Medicare and Medicaid benefits. Discussions focused on understanding the lessons learned from the past decades of work integrating care, and the feasibility and potential impact of possible policy changes. We thank each of the participants for sharing their expertise, and The SCAN Foundation and Arnold Ventures for funding this work. The findings and recommendations in this paper are those of the authors.

The Time is Now

Overcoming fragmented care for dually eligible individuals has been a challenge for decades, with dedicated efforts to test integrated models in state demonstration projects over the past 10 years. As these projects come to an end, we can now apply the lessons learned to the current context, which is characterized by rising costs, growth in Medicare Advantage and value-based payment arrangements, and a commitment to addressing health disparities. We have a window of opportunity, as indicated by several bipartisan pieces of legislation that have been introduced in Congress with the goal of integrating care for this population. Building on that momentum, our recommendations highlight key actions that Congress, the Centers for Medicare and Medicaid Services (CMS), and states can take to integrate care, reduce inefficiency and limit cost growth, and promote health and well-being for more than 9 million Americans who are currently enrolled in both Medicare and Medicaid.

Introduction

People who qualify for both Medicare and Medicaid—commonly known as “dual eligibles” or “dually eligible individuals”—must navigate two separate programs with different rules on eligibility and benefits. Medicare, a federal program, covers most of their primary care, acute and post-acute care, and prescription drugs. Medicaid, a joint federal-state program, covers long-term services and supports (LTSS), certain behavioral health services, and Medicare premiums and cost-sharing, as well as supplemental benefits such as dental and vision in some states. The lack of coordination and unaligned incentives between the two programs can lead to poor outcomes and high costs for this population, as well as confusion and frustration for individuals in accessing care. The financial stakes are high, given the roughly $500 billion per year spent on dually eligible individuals; the human stakes are even higher, in that they include some of the country’s most high-need populations.

State and federal policymakers have proposed and tested a number of models that integrate care for dually eligible individuals in an attempt to overcome these challenges, with varying degrees of success. This white paper presents an overview of this population, focusing on dually eligible individuals who qualify for the full range of Medicaid-funded services, including LTSS and behavioral health care. It examines the challenges these individuals face, discusses the evidence and experience around integrated care models, and suggests policy recommendations to move toward a better system of care.

A Snapshot of Full-Benefit Dually Eligible Individuals

In 2023, more than 13 million people qualified for both Medicare and Medicaid, 73% of whom were entitled to full Medicaid benefits.¹ The remainder qualified for partial Medicaid benefits, which covers Medicare premiums and in some cases cost-sharing, for whom there is far less of a challenge for integrating services. Here we review recent data on the 9.4 million “full-benefit” dually eligible individuals.

Demographics

Compared to other Medicare beneficiaries, dually eligible individuals include a higher proportion of people with low incomes, those under age 65 with a disability, and people with other complex health needs. They are a diverse group, as about half are people of color and 38% are under age 65.² About one-quarter (26%) report five or more chronic conditions, and a high proportion have a serious mental illness, including major depressive disorder (32%), bipolar disorder (10%), and schizophrenia and related psychotic disorders (11%).³ Eleven percent have been diagnosed with Alzheimer’s disease and related dementias (ADRD). More than half have at least one limitation performing activities of daily living (ADL), such as eating, bathing, and dressing—with 40% reporting two or more ADL limitations. Consequently, they are more likely than other Medicare beneficiaries to live in an institution rather than in the community (13% vs. 1%, respectively). These conditions and limitations can be co-occurring, leading to increased health burdens and the need for a “whole person” approach to care.

Utilization and Spending

Not surprisingly, full-benefit dually eligible individuals use more health care services and incur greater spending than other individuals enrolled in only Medicare or Medicaid.⁴ In Medicare, they account for 14% of enrollment but 26% of all Medicare spending; in Medicaid, they make up 10% of Medicaid beneficiaries but 27% of Medicaid spending. They use more inpatient hospital and skilled nursing facility care than other Medicare beneficiaries, and more institutional long-term care than other Medicaid beneficiaries.

Pathways to Obtaining and Maintaining Dual Eligibility

Dually eligible individuals generally gain access to Medicare and Medicaid at different times. The typical pathway to full-dual status differs for adults ages 18-64 versus those age 65 or older. Of people who became dually eligible in 2021, 39% had Medicare first and subsequently enrolled in Medicaid.⁵ People on this Medicare-to-Medicaid pathway often qualify for Medicaid in different ways, such as poverty status or by spending down their income/assets on medical care and LTSS. In contrast, 61% of people who became dually eligible in 2021 had Medicaid first and subsequently enrolled in Medicare (by turning 65, having received Social Security disability benefits for 24 months, or having end-stage renal disease).⁶ Most individuals in the Medicaid-to-Medicare pathway are younger adults with disabilities, many of whom receive Supplemental Security Income (cash assistance for low-income older adults and people with a disability or blindness).⁷ These pathways reflect subgroups that have different levels of chronic disease, disabilities, and care needs, pointing to the importance of coverage options that can meet each beneficiary’s needs and deliver whole-person care.

Typically, dually eligible individuals remain continuously enrolled in Medicare but can lose Medicaid coverage due to changes in income or administrative barriers associated with annual state eligibility redeterminations. One study found that more than 7% lost Medicaid coverage for at least one month in 2019, mostly due to administrative barriers; more than 50% of them regained it within 12 months.⁸ A continuous coverage provision enacted during the COVID-19 public health emergency reduced the percentage of dually eligible individuals losing Medicaid coverage to 2.3% in 2020.⁹ Since the public health emergency ended in March 2023, states have returned to annual eligibility redeterminations.

Coverage Arrangements

Most dually eligible individuals navigate Medicare and Medicaid benefits separately, contending with multiple administrative rules and provider networks. These programs have little incentive to coordinate care, and in fact, the system creates perverse financial incentives to shift costs of care to the other program. As a result, dually eligible individuals are confronted by a complex system that is confusing, difficult to navigate, and can fail to meet their needs. This complexity is especially problematic during transitions across care settings (e.g., after a hospitalization), when the benefits of both programs (physical health, behavioral health, durable medical equipment, and LTSS) need to be coordinated to optimize patient outcomes. Dually eligible individuals are stuck in the middle: because Medicare is the primary payer for medical care and Medicaid pays second, dually eligible individuals typically must navigate Medicare coverage rules first and then see if Medicaid will cover a service.

The mix of fee-for-service and managed care arrangements in Medicare and Medicaid adds further complexity to the coverage landscape for dually eligible beneficiaries. Like other Medicare beneficiaries, dually eligible individuals can choose traditional Medicare fee-for-service (FFS) coverage or managed care (Medicare Advantage). For Medicaid, coverage options vary by state, and dually eligible individuals may face a combination of FFS and managed care arrangements for subsets of covered services. As a result, almost all dually eligible individuals have separate, uncoordinated coverage arrangements for their Medicare and Medicaid benefits.¹⁰ Figure 1 shows the distribution of coverage arrangements for dually eligible individuals in 2021:

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Within these broad categories of FFS and managed care, dually eligible individuals face a complicated array of coverage options. In Medicare Advantage (MA), for example, they can enroll in conventional plans or “special needs plans” (SNPs) that serve distinct populations, including dually eligible individuals (Dual Eligible Special Needs Plans or D-SNPs), people with certain chronic conditions (Chronic Conditions Special Needs Plans or C-SNPs), or people needing institutional-level long-term care (Institutional Special Needs Plans or I-SNPs).¹² Some conventional MA plans are marketed toward and primarily enroll duals (so-called D-SNP “look-alikes”) but are not subject to federal requirements to coordinate coverage with Medicaid.¹³

Medicaid managed care systems can also vary. For example, states may offer Medicaid managed care plans covering only a subset of Medicaid benefits, such as behavioral health, and they may carve out a subset of benefits, such as LTSS, from a larger managed care contract (providing it as fee-for-service). Alternatively, a dually eligible individual might receive their Medicaid benefits across multiple health plans.

The latest data reveals that MA enrollment is growing among full-benefit dually eligible individuals. At the beginning of 2024, 59% were in an MA plan, two-thirds of whom were in a D-SNP.¹⁴ Even for those remaining in FFS Medicare, a variety of value-based payment models can affect how dually eligible individuals receive care. For example, in 2021, 12% of dually eligible individuals were in FFS Medicare and attributed to a Medicare Shared Savings Program.¹⁵ Accountable Care Organizations (ACOs) take on financial risk and share in the savings for their Medicare patients, although they do not bear risk for Medicaid costs or Part D drug costs. Furthermore, ACOs have no formal relationship with state Medicaid programs. In 2017, the CMS Innovation Center developed an ACO model for dually eligible individuals that involved coordination and shared savings with states, but no state chose to participate in the demonstration and the model was withdrawn.¹⁶

Models of Medicare-Medicaid Integration

For decades, policymakers have sought to establish and encourage models to coordinate coverage across Medicare and Medicaid. These models include: 1) Dual Eligible Special Needs Plans, 2) Program of All-Inclusive Care for the Elderly (PACE) limited to those ages 55 and older needing nursing home-level care, and 3) coverage arrangements such as Medicare-Medicaid Plans (MMPs) tested under the CMS Financial Alignment Initiative. In general, these models fall along a continuum of integrated care, as shown in Figure 2 below. Along this continuum, a higher level of integration is expected to result in greater coordination of services and less fragmentation across Medicare and Medicaid.

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Dual Eligible Special Needs Plans

Special plans for duals (D-SNPs) within the Medicare Advantage program were first authorized in statute in 2003, but their prominence has grown since they were made permanent in 2018. These plans enroll only dually eligible individuals and receive a capitated payment to cover all Medicare services.¹⁷ D-SNPs are required to have a contract with a state Medicaid agency specifying the plan’s responsibility to coordinate Medicaid benefits. In addition, some D-SNPs have contracts with state agencies to manage Medicaid-covered benefits and spending, providing a greater level of Medicare-Medicaid integration.

Federal rules in 2019 defined three different types of D-SNPs, with varying degrees of integration with state Medicaid services. Figure 3 defines these three types. In addition to these three types, a subset of D-SNPs, termed Applicable Integrated Plans (AIPs), operate with exclusively aligned enrollment, meaning all enrollees receive Medicare and Medicaid through the same plan. In 2025, all Fully Integrated D-SNPs (FIDE SNPs) must be AIPs. However, only a subset of Highly Integrated D-SNPs (HIDE SNPs), and a small number of Coordination-Only (CO) D-SNPs in California, are considered AIPs. In 2022, only 33% of dually eligible individuals received their Medicare benefits through a D-SNP, and 57% of that group was enrolled in CO D-SNPs.¹⁸

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Overall, evidence on the performance of D-SNPs, compared to other Medicare coverage types, is mixed, and there is varying evidence on the performance of arrangements with more versus less Medicaid integration. Some studies found that D-SNPs performed similarly to or slightly better than conventional MA plans on patient experience and quality measures.^20,21 Furthermore, a review found that FIDE SNPs, compared to non-integrated arrangements, reduced or delayed long-term nursing home stays and were associated with increases in outpatient and home- and community-based services^.22 However, other analyses found mixed or minimal differences in patient experiences, care coordination, and preventable hospitalizations between enrollees of more versus less integrated D-SNPs.^23,24

Program of All-Inclusive Care for the Elderly (PACE)

PACE is a community-based program for people ages 55 and older who are eligible for nursing home-level care. About 90% of PACE enrollees are dually eligible individuals.²⁵ A single risk-bearing organization receives capitated payments from Medicare and Medicaid and coordinates all medical and social services for its enrollees through a designated PACE center.²⁶ An interdisciplinary team assesses an enrollee’s needs, develops care plans, and delivers all services (including acute care services and when necessary, nursing home services).

PACE is a small program, currently covering 76,000 Medicare enrollees (less than 1% of dually eligible individuals) in 33 states.²⁸ Low enrollment may be related to its brick-and-mortar basis, PACE start-up costs, state and federal requirements for establishing or expanding PACE programs, and/or the need for beneficiaries to switch to a primary care provider affiliated with the PACE program upon enrollment.²⁹ PACE is considered the clinical “gold standard” of community-based care for frail older adults, offering many advantages to enrollees and payers, but it is quite different than traditional insurance products because it is community oriented and targets subsets of dually eligible individuals.³⁰ Research suggests that PACE enrollment leads to fewer hospitalizations and better patient satisfaction than other models of care, including D-SNPs.³¹

Medicare-Medicaid Plans Through the Financial Alignment Initiative (FAI)

For the past 10 years, CMS has run a Financial Alignment Initiative (FAI), which tested financing models to better integrate care for dually eligible individuals in 12 states.³² It operates under the Center for Medicare and Medicaid Innovation (CMMI) rules that require models to reduce spending without reducing the quality of care, or to improve the quality of care without increasing spending.³³ The demonstration is scheduled to end in 2025.

Two main types of models were tested: capitated models and managed fee-for-service models. Most states used capitated models, in which a single Medicare-Medicaid plan (MMP) received a blended Medicare and Medicaid payment to provide all care. In 2022, 6% of dually eligible individuals were enrolled in MMPs.³⁴ Like FIDE SNPs, MMPs contract with CMS and the states where they operate.³⁵ However, MMPs have a single, three-way contract among the plan, CMS, and the state, as opposed to D-SNPs, which have separate contracts between the plan and CMS, and the plan and the state. In setting capitation rates to MMPs, CMS made up-front budget adjustments (generally reductions of 1%-5% of Medicare Part A and B costs) to reflect anticipated savings for Medicare. In addition to capitated MMPs, two states—Washington and Colorado—tested managed fee-for-service models under the FAI. In both the fee-for-service and capitated models, states could receive shared savings if the models reduced Medicare costs below the up-front savings rate. The ability for states to share in Medicare savings was a key feature of the demonstration.

The FAI was not extended as a demonstration because research suggested that its plans did not produce short-term savings to Medicare. One state saw lower Medicare costs compared to projections, while six states saw increases.³⁶ The impact on Medicaid spending and utilization has been difficult to ascertain, and CMMI’s evaluations of the model have focused on Medicare, not Medicaid, spending. Additionally, the evaluations examined outcomes for all who were eligible to enroll, not those who actually did, making it difficult to fully understand the impacts of participating in the model. A further challenge was low participation in MMPs in many states. States initially used passive enrollment to encourage participation, but some states experienced high opt-out rates, and beneficiaries reported mixed experiences with care coordinators.^37,38 The results raise questions about how to measure success and reflect many implementation challenges, including the need for increased beneficiary and provider engagement in fully integrated plans. As the FAI ends, individuals are being transitioned into other integrated plans, primarily FIDE SNPs.³⁹ However, the mechanism by which states shared in potential savings with Medicare ended with the FAI, and CMS will need another demonstration or congressional action to implement future shared savings models.⁴⁰

Lessons Learned from Medicare-Medicaid Plans

In 2022, CMS began phasing out MMPs.⁴¹ At the time, 39 MMPs were being offered in nine states. CMS is working with states to help convert MMPs into integrated D-SNPs by 2026. CMS identified a number of lessons from its experience with MMPs, which the agency articulated as:

• Enrollee participation in governance helps identify and address barriers to high-quality, coordinated care.
• Assessment processes are a vehicle for identifying and addressing unmet needs, particularly those related to social determinants of health.
• Medicare-Medicaid integration correlates with high levels of beneficiary satisfaction.
• Carving in Medicaid behavioral health benefits helps promote better coordination of behavioral health and physical health services.
• Integrated beneficiary communication materials can enhance the beneficiary experience.
• Effective joint oversight of integrated managed care products is possible.
• Integrated care and joint oversight provide a platform for quality improvement.
• There is potential for market distortions in areas with multiple options targeting the same population.
• State investment is critical to successful implementation of integrated care either through MMPs or D-SNPs.⁴²

Additionally, concerns emerged in the MMPs that the policy of implementing up-front budget reductions based on anticipated savings prioritized short-term savings over long-term investment. The Medicare Payment Advisory Commission noted that some stakeholders argued it was “unrealistic to expect plans to produce savings in the first few years of the demonstration.”⁴³

The Current Policy Landscape

Policies designed to improve care for dually eligible individuals have used different levers to address access, quality, and cost. The federal government can regulate plans directly, or it can impose conditions on states. For their part, states can impose conditions on plans, although the scope of authority differs for Medicare and Medicaid. Here we summarize recent federal regulations and proposed legislation and highlight a few recent state efforts to move toward more integrated care for their dually eligible populations.

Recent Federal Regulation

CMS has taken certain steps in new rulemaking to increase enrollment in integrated D-SNPs and to curb enrollment in non-integrated Medicare Advantage plans. The Contract Year 2025 Medicare Advantage Final Rule, published in April 2024, made changes to allow individuals to enroll or switch monthly into integrated options.⁴⁴ Furthermore, regulations finalized in 2022 required that FIDE SNPs be fully aligned by 2025, meaning that they can only enroll duals who are in the affiliated Medicaid managed care plan.⁴⁵ Additionally, CMS is continuing its phase-out of contracts with D-SNP “look-alikes” (MA plans that enroll many dually eligible individuals without any requirement to coordinate or even contract with the state), and broadened the definition of “look-alikes” to lower the D-SNP look-alike threshold of the share of enrollees who are dually eligible individuals to 60% by 2026 to address the continued proliferation of plans that are serving high percentages of dually eligible individuals without meeting the requirements to be a D-SNP.

Proposed Federal Legislation

In recent years, members of Congress have proposed legislation aimed at improving the fragmented system for dually eligible individuals. In the past year, two new federal bills were proposed to encourage more integrated care for this population. The Delivering Unified Access to Lifesaving Services (DUALS) Act of 2024 was introduced on March 14, 2024, by Sen. Bill Cassidy (R-LA) and a bipartisan group of five members of the Senate Committee on Finance.⁴⁶ The bill requires each state, with support from CMS, to select, develop, and implement a comprehensive, integrated health plan for dually eligible individuals. It requires plans to provide a care coordinator and develop care coordination plans and requires states to establish ombudsperson offices. It creates a single appeals process, reduces third-party broker incentives, and expands PACE eligibility to individuals under age 55.

The Helping States Integrate Medicare and Medicaid Act was introduced by Sen. Bob Casey (D-PA) on March 6, 2024.⁴⁷ In line with recommendations from the Medicaid and CHIP Payment and Access Commission (MACPAC), the Act focuses on addressing the financial and administrative challenges states face in implementing more integrated plans.⁴⁸ The Act offers states and CMS $300 million to fund the development of integrated care plans, including an increased federal match for state administrative costs related to integration and infrastructure to better support dually eligible individuals.

In 2022, Sen. Sherrod Brown (D-OH) and former Sen. Rob Portman (R-OH) introduced legislation that would have established an optional state-administered program to fully integrate care for full-benefit dually eligible individuals.⁴⁹ In this new All-Inclusive, Integrated Medicare-Medicaid (AIM) Program, administration, dual eligibility processes, funding streams, and benefits would be fully integrated. States would have the option to participate, and individuals could choose to enroll. It would align financial incentives by allowing states to share and reinvest any savings that accrue in subsequent years through improvements in care and quality. The Senate Committee on Finance did not take any action on the proposal.

State Models of Care

States play an important role in integration. States have deployed a variety of policy tools to manage the care of dually eligible individuals, such as leveraging their contracting authority with D-SNPs to require D-SNPs to: 1) have companion Medicaid managed care plans serving dual eligibles, 2) bear risk for Medicaid spending, including long-term care spending, or 3) have exclusively aligned enrollment. Figure 4 illustrates the range of strategies employed across five states. For more on each of these states, see Appendix B.

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An Action Plan for Integrated Care

This overview illustrates the complexities of dual eligibility for Medicare and Medicaid. The existing system is burdensome for beneficiaries, inefficient in its use of resources, and creates suboptimal health outcomes among this high-need population. The most straightforward way to overcome these challenges would be to establish a single, unified program for individuals eligible for both Medicare and Medicaid. This would allow entities to blend Medicare and Medicaid dollars and use them in the most efficient way. As discussed above, there has been some bipartisan support in Congress for this approach. However, implementing a new, unified program would require substantial political momentum and time. Therefore, we offer several recommendations, informed by recent policy activity and proposals, to promote integrated care within the current, separate programs of Medicare and Medicaid. These proposals focus on improving the beneficiary experience navigating care and accessing benefits across Medicare and Medicaid, making efficient use of Medicare and Medicaid dollars, providing integrated, coordinated care that meets each person’s needs, and holding entities accountable for meeting these needs. The recommendations are offered with knowledge that much of the burden of making these two separate programs work better together falls on resource-constrained state Medicaid programs. We highlight the actions that Congress, CMS, and states need to take within each of these recommendations. Appendix C includes these recommendations, organized by actor.

To achieve high-quality whole-person care, it is important to align financial incentives for beneficiaries, providers, plans, and government; and to account for market incentives that might undercut the desired outcomes. For example, integration efforts can be hindered by Medicare Advantage “look-alike” plans by integrated plans having higher administrative burdens to operate than non-integrated plans, the lack of a person-centered system for helping dually eligible individuals understand and navigate coverage options and broker commissions that provide incentives to steer beneficiaries to non-integrated plans.

Financial alignment is an essential prerequisite for establishing incentives to coordinate care across Medicare and Medicaid. However, financial alignment alone is not sufficient to ensure a fully integrated care experience. Integration can occur across four different domains:

1. Financial integration where one entity bears financial risk for Medicare and at least some Medicaid spending.

2. Integrated experience of coverage with one insurance card and handbook, one provider network, one point of contact for coverage questions, appeals, and grievances or administrative integration, with oversight to that single set of rules.

3. Integrated experience of care with one care plan, care coordination, providers working as a team or clinical integration.

4. Benefits integration where one entity offers a comprehensive set of benefits that includes primary care, acute care, prescription drugs, long-term services and supports, and any supplemental services.

Ultimately, the goal is to attain integration across all four of these domains.

Currently, Medicare coverage arrangements lie on a continuum of integration with Medicaid. For example, exclusively aligned enrollment (where enrollees receive their Medicare and Medicaid coverage from the same plan or its parent) facilitates an integration of benefits, as well as experiences of coverage and care. Therefore, for purposes of the recommendations below, we define “substantially integrated models” as models that include financial integration (one entity bearing risk for some Medicare and Medicaid spending) and exclusively aligned enrollment. As shown in Figure 2, this definition includes all exclusively aligned D-SNPs (AIPs) and PACE programs.

Integrated Care for Dually Eligible Individuals in Institutions

Recommendations

1. Require states to offer at least one substantially integrated Medicare-Medicaid option to all dually eligible individuals and provide the funding to support its creation and administration; use carrots and sticks to reduce the prevalence of non-integrated plans serving disproportionate numbers of dually eligible individuals.
   
   Rationale: The availability of integrated options varies widely across states. Even while retaining the flexibility states have in choosing their Medicaid delivery systems, it is possible to create a system where all dually eligible individuals have access to at least one coverage option in which one entity administers both Medicare and Medicaid benefits and bears some degree of financial risk for both Medicare and Medicaid spending.
   • Congress should require states to offer an integrated care option to all dually eligible individuals, and should pair this requirement with dedicated resources, such as higher federal Medicaid funding matching rates and planning grants, to support the development of integrated models. Dedicated resources for state and federal administrators to manage integration and for ongoing monitoring and reporting are essential. Congress could allocate resources to states through a time-limited, enhanced federal matching rate (similar to Health Homes or in the Balancing Incentive Program).^52,53 Federal planning grants could come from a small Patient-Centered Outcomes Research Institute-like tax on all plans serving this population.⁵⁴
   • To help states with this strategy, CMS should develop a menu of integrated program models, all of which should include financial integration. Furthermore, each model should aim to achieve the maximum integration of coverage experience, care experience, and comprehensive benefits possible, including:
     • A single set of enrollment materials and enrollee notices for all Medicare and Medicaid benefits.
     • A unified plan of care and a single care coordinator that can help the beneficiary access all Medicare and Medicaid benefits, and, as part of the care team, interact with plans and providers. The coordinator should have access to information on all aspects of care and should be able to represent a beneficiary’s interests in reviews and appeals of coverage decisions.⁵⁵ Ideally, coordination services should be dynamic and flexible, and available as beneficiary needs arise and change.
     • A core set of quality measures. To evaluate beneficiary experiences with care, CMS should work with the Agency for Healthcare Research and Quality (AHRQ) to develop a Consumer Assessment of Healthcare Providers and Systems (CAHPS) module specific to dually eligible individuals. This work should be done in consultation with beneficiaries, and borrow from existing beneficiary-centered models, to ensure that the measures reflect their priorities and perspectives, in language that is appropriate and accessible.⁵⁶
   • CMS and states should implement a regulatory strategy that ensures that integrated options are prioritized over non-integrated options, and that non-integrated options are not subject to lower requirements. For CMS, the strategy should include:
     • Requiring all Medicare Advantage plans who serve a substantial (e.g., 20%) number of dually eligible individuals to have a formal relationship with state Medicaid agencies.⁵⁷
     • Developing a payment policy that incentivizes providing higher levels of integration.
   • States should decrease, over time, the number of beneficiaries in non-integrated or non-aligned plans with which they contract through procurements.
2.  Medicare fee-for-service, create new Accountable Care Organizations (ACOs) that are at risk for both Medicare and Medicaid spending; as interim steps phase in: 1) requirements that risk-bearing entities who serve a substantial share of dually eligible individuals have a formal relationship with state Medicaid agencies, and 2) develop and test a risk-sharing mechanism for existing ACOs that can capture and share costs and savings.
   
   Rationale: While policymakers have focused on integration in Medicare Advantage plans, nearly 50% of dually eligible individuals remain in fee-for-service Medicare, many of whom are now attributed to an ACO. Incentives need to be aligned for these beneficiaries. Ideally, ACOs that serve dually eligible individuals should be at risk for both Medicare and Medicaid spending to reduce the potential for cost-shifting and incentivize better coordination of acute care and long-term services and supports, but it will take time to develop and implement these models. In the meantime, CMS should also work to improve connections between existing ACOs and Medicaid.
   • CMS should require that all risk-bearing entities (such as ACOs) serving dually eligible individuals have formal relationships with state Medicaid agencies, delineating their responsibilities to coordinate care and share information.
   • CMS should work with states and provider groups to develop and test a feasible and practical way to create ACOs for dually eligible individuals that are at risk for both Medicare and Medicaid costs and that would share costs and savings. Financial integration in the existing ACO structure is particularly challenging, given that ACOs bear risk for attributed beneficiaries, rather than enrollees, and do not bear risk for long-term care or prescription drugs.
   • CMS should develop an evaluation framework that compares program results to non-integrated care and includes measures of long-term quality, patient experience, integration, costs, and value.
3. Simplify and improve Medicaid eligibility and enrollment processes to promote continuous coverage.
   
   Rationale: Although most dually eligible individuals have stable incomes that make them continuously eligible for Medicaid, they face complex state redetermination processes that can lead to procedural disenrollment and unwarranted gaps in coverage.
   • Congress should require 12-month continuous Medicaid eligibility for dually eligible individuals and help states simplify and streamline Medicaid redeterminations, such as maximizing the use of ex parte renewals (renewals based on other data from other means-tested programs).⁵⁸
4. Provide dually eligible individuals with meaningful and easier-to-navigate choices around integrated coverage options.
   
   Rationale: Although about half of dually eligible individuals today have the choice of a substantially integrated plan, the range of choices are poorly presented and often confusing. Beneficiaries need access to unbiased and accessible information about their plan options and clear information explaining the benefits of integrated care. Provider education and engagement is key, as dually eligible patients often turn to providers for advice on coverage options.
   • Through the application of choice architecture tools and the wider availability of knowledgeable enrollment assistance, CMS should improve beneficiaries’ ability to understand and choose an integrated plan.⁵⁹ These steps include:
     • Standardizing and integrating information on benefits and coverage for dually eligible individuals on the Medicare Plan Finder site and including information on Medicaid benefits. This could include reordering options so that more integrated plans appear first and presenting side-by-side plan comparisons (using state-specific plan data) that are meaningful to dually eligible individuals, such as provider networks, rates of prior authorizations and denials, per capita rates of services authorized versus delivered, and coverage for commonly needed services, such as durable medical equipment and physical therapy.
     • Changing the default option for Medicaid beneficiaries newly eligible for Medicare from fee-for-service Medicare to substantially integrated plans that meet minimum star ratings, with an easy opt-out option. In any transition from non-integrated care, procedures must be in place to maintain continuity of care and avoid unwanted disruptions in beneficiaries’ existing relationships with providers. This should build on the experience of the default enrollment mechanism now available for enrolling a plan’s Medicaid managed care enrollees into an affiliated D-SNP.
     • Developing a multipronged strategy that increases access for dually eligible individuals to impartial information through:
       • A national resource hub connected to the Medicare Plan Finder site, for impartial information for dually eligible individuals’ plan enrollment that shows full information about both Medicare and Medicaid benefits, including trained navigators to help explain plan options.⁶⁰
       • Additional resources for dually eligible individual-specific navigators, including training for State Health Insurance Assistance Programs (SHIPs) and state-contracted independent enrollment brokers to improve their understanding of integrated Medicare options for this population.
       • Further regulating independent brokers’ commissions to eliminate incentives to steer people who are dually eligible into non-integrated Medicare plans.
5. Apply and build upon the lessons from the Financial Alignment Initiative (FAI) to develop a new shared savings structure that incentivizes clinical, financial, and administrative integration for dually eligible individuals.
   
   Rationale: A decade of demonstrations in the FAI have produced valuable insights into the financial and market forces that can facilitate, or hinder, substantially integrated care for dually eligible individuals. Lessons learned about how to align incentives for states, providers, beneficiaries, and plans should now be used to develop a new shared savings structure between the federal government and states.
   • With authority from Congress and in consultation with states, CMS should design and implement a shared savings structure that promotes integrated care over non-integrated options and captures the long-term savings or slower cost growth across both programs that can be achieved by aligning financial incentives. Key features of this structure include:
     • Up-front investment in state-level care coordination and supportive services, targeted to high-need, high-cost beneficiaries, with adequate administrative funding. This investment can be in the form of planning grants or an enhanced federal match for the administrative costs of developing the infrastructure to implement and oversee the model.
     • Incentives for states (e.g., enhanced federal match rates) to adopt evidence-based strategies for consolidating all Medicaid benefits under one model. Such strategies could include the “carve in” of services, such as behavioral health, within Medicaid physical health and long-term care programs.
     • A methodology for shared savings that sets Medicare and Medicaid benchmarks based on trends in an entire market (including non-integrated options); the benchmark rebasing policy in subsequent years should not make it harder for successful participants to continue to achieve savings (the ratchet effect). The methodology should also consider how to disburse shared savings to states to address timetables for state budget planning. A longer-term (multi-year) window is needed to fully capture the savings that could accrue from up-front investments.
     • An evaluation framework that compares program results to non-integrated care and goes beyond short-term savings to include quality measures, patient experience measures, measures of integration, and cost-effective use of federal and state resources.
6. Hold programs and plans accountable for meeting the needs of beneficiaries through structures and processes that promote person-centered, “whole-health” care for dually eligible individuals.
   
   Rationale: Even in more integrated models of care, the responsibility to deliver the care that dually eligible individuals want and need can be diffused across public and private entities, federal and state authorities, and providers. But all stakeholders share in the responsibility for improving beneficiary access to, and experience of, care; all should be held clinically, financially, and administratively accountable for achieving these outcomes.
   • Establish dedicated ombudsperson offices in each state to address access issues, complaints, and systemic issues in delivering care to dually eligible individuals. Such offices should be independent, external entities with three core functions:⁶¹ 1) assisting dually eligible individuals in navigating the complex systems of managed care; 2) monitoring and reporting beneficiaries’ experiences; and 3) providing outreach and education to dually eligible individuals and their families about their benefits and rights. These efforts should be coordinated with the existing managed LTSS ombudsperson offices in many states.
   • To assure financial accountability, require integrated plans to calculate and report on a combined Medical Loss Ratio (MLR) for both Medicaid and Medicare spending. While a blended MLR does not remedy problems that arise from separate underlying funding mechanisms for Medicare and Medicaid and may introduce challenges (e.g., calculating shared savings), it is a step toward integrating financing at the plan level. It may also help to ensure that integrated plans spend the appropriate percentage of public dollars on direct patient care and quality improvement initiatives.⁶²
   • Develop plan quality measures that capture what matters most to beneficiaries, including subpopulations of people with disabilities, behavioral health issues, and cognitive impairments. CMS should work with stakeholders to adapt elements of existing instruments, including the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and the Healthcare Effectiveness Data and Information Set (HEDIS) measures, as well as design measures that address health-related social needs of dually eligible individuals. These measures should be applied to both integrated and non-integrated plans.
   • Establish and maintain joint CMS-state oversight of integrated care models through dedicated staff charged with strengthening oversight tools and data sharing.

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