AMA urges CMS to delay dual-eligible demo

Washington In a July 19 letter to the Centers for Medicare & Medicaid Services, the American Medical Association asked the agency to delay by at least a year a proposed demonstration project that will test integrated payment and care systems for patients who receive benefits from both Medicare and Medicaid.

The AMA strongly supports demonstration projects that aim to align and coordinate care delivery provided to the dual-eligible population, AMA Executive Vice President and CEO James L. Madara, MD, wrote in the letter to acting CMS Administrator Marilyn Tavenner. “However, we are very concerned about the implementation of these demonstration projects, especially with regard to their size and scope.”

CMS estimates that more than 9 million Americans are enrolled in both Medicaid and Medicare. As Dr. Madara noted in his letter, they make up a disproportionate share of the spending for these programs.

More than $300 billion is spent annually on care for dual-eligibles, Melanie Bella, director of the CMS Medicare-Medicaid Coordination Office, testified before a Senate panel on July 18. Compared with Medicare-eligible patients, dual enrollees are more likely to be poor or have diabetes, stroke, mental illness a disability, she said.

In 2011, CMS announced several demonstration projects and other initiatives to coordinate care better for these beneficiaries. One demonstration, the Financial Alignment Initiative, is testing pay capitation and managed fee-for-service payment models to streamline services more effectively for these beneficiaries, while improving care delivery and saving money for states and the federal government.

Twenty-six states have submitted proposals to CMS to participate in this demo, according to Bella’s testimony. CMS expects that these projects will serve at least 2 million beneficiaries enrolled in both Medicare and Medicaid. States are scheduled to begin these demos on Jan. 1, 2013.

In his letter, Dr. Madara echoed the Medicare Payment Advisory Commission’s observation that the projects “are too large and are moving too quickly for the insurers involved.” He noted that most of the states testing a capitated approach are seeking to enroll most or all of their dual eligibles in the demonstrations, or entire subgroups, such as disabled beneficiaries under age 65.

The large scope of these projects also will make it difficult to transition large groups of individuals with complex care needs out of the demonstration if it fails to meet beneficiaries’ needs, Dr. Madara wrote. Many plans may not have the proper experience to deal with this population “or with managing and being at risk for all Medicare and all Medicaid benefits.”

The AMA also is concerned that states might utilize passive enrollment in the demonstrations, meaning beneficiaries could be signed up without their consent. Instead of being allowed to opt out of a plan in which they’ve been enrolled passively, these beneficiaries should be given the opportunity to opt in, the Association said.

Emphasizing that care coordination of dual-eligibles should be “physician-led,” Dr. Madara urged that the demonstration projects include an adequate network of health care professionals, including primary care and specialty physicians. The agency also should ensure that physicians receive adequate payment through these demonstration projects and that pay rates be “at least as high as current Medicare fee-for-service rates.”

Delaying the demonstration project for at least a year would allow physicians, beneficiaries and other stakeholders time to understand and comment on these demos, as well as the opportunity to work with CMS, states and health plans “to address issues raised in specific state proposals,” he said.

In a May 24 letter to Tavenner, the Alliance of Specialty Medicine expressed its own concerns about CMS dual-eligible demos.