Department of Health Releases Proposals to Align Medicaid and Medicare Value-Based Payment
The Department of Health (DOH) has released a “Draft Medicare Alignment Paper” with proposals to integrate Medicare and Medicaid value-based payment efforts. The State would incorporate Medicare payment reform models, such as ACOs and bundled payments, into the State’s Medicaid value-based payment (VBP) efforts. In addition, the State would include Medicare beneficiaries in the Medicaid VBP models implemented under the State’s VBP Roadmap (e.g., global payment for a population, integrated primary care, bundled payments, and total care for a subpopulation). Medicare Advantage plans would also be encouraged to pay providers in accordance with Medicaid value-based payment models. Finally, under the proposal, Montefiore Health System would serve as the first accountable care organization to assume full financial risk and population health responsibility for its entire Medicaid and Medicare population.
Significantly, the State seeks CMS's permission to administer Medicare fee-for-service payments for dual eligibles through the State’s VBP models, while continuing to pay for their Medicaid benefits through managed long term care plans. According to the Medicare Alignment paper, this “should be seen as complementary” to the FIDA program. Under the proposal, DOH would “virtually pool” Medicare and Medicaid dollars for services delivered to dual eligible beneficiaries who remain in fee-for-service Medicare. This would allow savings generated on the Medicare side through reductions in hospitalizations (as well as the downside risk) to be shared with long-term care providers and others on the Medicaid side. This proposal is intended to give all providers a stake in reducing the overall cost of care. Since much of the savings derived through the efforts of long-term care providers is likely to accrue to Medicare, LeadingAge New York has actively pressed for a mechanism that would give Medicaid providers credit for contributing to Medicare savings. We are evaluating the various impacts of this complex proposal.
According to the DOH, the Medicare Alignment proposals would improve coordination between Medicare and Medicaid services for dual eligible beneficiaries; enable providers to focus on a consistent set of alternative payment models; and strengthen the impetus to transition to VBP arrangements by expanding the percentage of revenue tied to those arrangements.
The proposals will continue to be refined with input from the DOH VBP Workgroup, the VBP Technical Design Subcommittee, and other stakeholders. The Alignment Paper is available for public comment through August 31, 2015. LeadingAge New York will be submitting comments on behalf of its members. Members may submit comments to Dan Heim by August 19. Comments may be submitted directly to DOH via e-mail by 3:00 PM on August 31, 2015.
Contact: Dan Heim, dheim@leadingageny.org, or Karen Lipson, klipson@leadingageny.org, 518-867-8383.