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Proposed Rule

Medicare and Medicaid Programs; Opportunities for Alignment Under Medicaid and Medicare

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Information about this document as published in the Federal Register.

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Centers for Medicare & Medicaid Services (CMS), HHS.


Request for information.


This document is a request for comments on opportunities to more effectively align benefits and incentives to prevent cost-shifting and improve access to care under the Medicare and Medicaid programs for individuals with both Medicare and Medicaid (“dual eligibles”). The document also reflects CMS' commitment to the general principles of the President's Executive Order released January 18, 2011, entitled “Improving Regulation and Regulatory Review.”


Comment Date: To be assured consideration, comments must be received at one of the addresses provided below no later than 5 p.m. July 11, 2011.


In commenting, please refer to file code CMS-5507-NC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this documentto Follow “Submit a comment” instructions.

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-5507-NC, P.O. Box 8013, Baltimore, MD 21244-8013.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services,

Attention: CMS-5507-NC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. Alternatively, you may deliver (by hand or courier) your written comments ONLY to one of the following addresses prior to the close of the comment period:

a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD— Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.

Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

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Edo Banach, Division of Program Alignment, Federal Coordinated Health Care Office, at (410) 786-8911 or

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Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: Follow the search instructions on that Web site to view public comments [insert instructions link].

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

I. Background

The Medicare and Medicaid programs generally cover different populations, but an estimated 9.2 million low-income Americans were eligible for both programs in 2008.[1] Two-thirds of dual eligible beneficiaries are over age 65, while one-third qualify through a disability.[2] Dual eligible beneficiaries represent some of the most chronically Start Printed Page 28197ill and costly individuals within both the Medicare and Medicaid populations. More than half of dual eligible beneficiaries have incomes below the poverty line [3] compared with 8 percent of non-dual eligible Medicare beneficiaries.[4] Many have multiple severe chronic conditions, long-term care needs, or both. Forty-three percent of dual eligibles have at least one mental or cognitive impairment,[5] while 60 percent of dual eligibles have multiple chronic conditions.[6] Nineteen percent live in institutional settings compared to only 3 percent of non-dual Medicare beneficiaries. Approximately 1.5 percent of dual eligibles with chronic conditions and functional limitations live in their communities and represented 6 percent of the nation's health care expenditures in 2006.[7] Furthermore, dual eligibles account for a disproportionately large share of expenditures in both the Medicare and Medicaid programs. Dual eligible beneficiaries account for 16 percent of Medicare enrollees but 27 percent of Medicare spending; [8] in the Medicaid program, dual eligible beneficiaries make up 15 percent of the program enrollees but account for 39 percent of program spending.[9]

There are tremendous opportunities for CMS to partner with States, providers, beneficiaries and their caregivers, and other stakeholders to improve access, quality, and cost of care for people who depend on these two programs.

Section 2602 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010, and Pub. L. 111-152 hereinafter collectively referred to as the “Affordable Care Act”) created the Federal Coordinated Health Care Office (“Medicare-Medicaid Coordination Office”) and charged the new office with more effectively integrating Medicare and Medicaid benefits and with improving the coordination between the Federal and State Governments for dual eligible beneficiaries. Under sections 2602(c)(5) and 2602(c)(7) of the Affordable Care Act, the goals of the Medicare-Medicaid Coordination Office include eliminating regulatory conflicts and cost-shifting between Medicare and Medicaid and among related health care providers. Sections 2602(c)(1) through (4) of the Affordable Care Act further charge the Medicare-Medicaid Coordination Office with addressing issues relating to quality of care and beneficiary understanding, beneficiary satisfaction, and access under Medicare and Medicaid.

II. The Alignment Initiative

As part of the Medicare-Medicaid Coordination Office's efforts to meet its responsibilities and goals, as outlined in the Affordable Care Act, and in direct support of Executive Order 13563[10] (Improving Regulations and Regulatory Review), which directs us to identify existing “rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them” as appropriate, the Office is undertaking an initiative to identify and address conflicting requirements between Medicaid and Medicare that potentially create barriers to high quality, seamless, and cost-effective care for dual eligible beneficiaries (“the Alignment Initiative”). The goal is to create and implement solutions in line with the CMS three-part aim, which includes, solutions that advance better care for the individual, better health for populations, and lower costs through improvement. The Alignment Initiative is not simply an effort to catalogue the differences between Medicare and Medicaid, or to make the two programs identical; rather, it is an effort to advance dual eligible beneficiaries' understanding of, interaction with, and access to seamless, high quality care that is as effective and efficient as possible. Medicare and Medicaid were designed with distinct purposes, which naturally results in numerous differences between the two programs in terms of eligibility, payment, and covered benefits. The Medicare program is administered by the Federal Government, and is generally available to elderly individuals or individuals with disabilities. Medicare covers a wide range of health care services and supplies, including acute, post-acute, primary, and specialty care services, as well as prescription drugs. Medicaid is a joint Federal and State program that is administered by States for certain categories of low-income individuals. Although specific benefits may vary by State, in general Medicaid covers acute care, primary and specialty care, behavioral health care, and long-term care supports and services.

For dual eligible beneficiaries, Medicare generally is the primary payer for benefits covered by both programs. Medicaid may then be available for any remaining beneficiary cost sharing. Medicaid may also provide additional benefits that are not (or are no longer) covered by Medicare. For example, Medicare covers skilled nursing facility services when a dual eligible beneficiary requires skilled nursing care following a qualifying hospital stay. During this time, Medicaid benefits may be available for amounts that are not paid by Medicare. Once the beneficiary no longer meets the conditions of a Medicare skilled level of care benefit, Medicaid may cover additional nursing facility services, including custodial nursing facility care. Although the two programs can work well together in financing health care for eligible beneficiaries, in some cases differential requirements between the two programs may create barriers to seamless, high quality care, creating a cost-shift between the two programs that may impede access to appropriate care.

The first step of the Alignment Initiative is to identify opportunities to align potentially conflicting Medicaid and Medicare requirements. This document represents the first step. We have compiled what we believe to be a wide-ranging list of opportunities for legislative and regulatory alignment on areas identified to date. We are seeking public comment on the list of alignment opportunities.

The list of alignment opportunities is intended to be a productive tool, with issues publicly shared for the purpose of improvement going forward. We believe public input in this early stage of the Alignment Initiative is critical to creating a foundation for future collaboration to address these issues. Comments from the public further the Alignment Initiative by engaging stakeholders in our work plan as future Start Printed Page 28198partners, while facilitating productive discussions on how Medicare and Medicaid can work more effectively and efficiently for dual eligible beneficiaries and those who care for them.

Seeking public comment on the list of alignment opportunities is also in keeping with the President's directive of January 26, 2009, to promote accountability, encourage collaboration, and provide information to Americans about their Government's activities.[11] Please see Section III of this document for a more detailed discussion of this first step.

Once we receive public comments on the list of alignment opportunities, the next step in the Alignment Initiative is to continue to engage stakeholders, including beneficiaries, payers, providers, and States, to determine the barriers and sources of the current misalignments. We will then determine which issues to address and in what order and timeframe. All areas are important, but given the scope of the issues already identified, we recognize we cannot address all issues at once, and some may take longer than others. We will identify and address those opportunities that we have the resources and authority to address, and will consider including those alignment opportunities that would require a statutory change to address in the Secretary's annual Report to Congress under section 2602(e) of the Affordable Care Act.

We are committed to an open, transparent, and accountable process. We seek comment on this initiative generally, as well as the further areas for exploration for alignment specifically (see Section III. of this notice). We will provide periodic updates on the Alignment Initiative on our Web site at​medicare-medicaid-coordination/​ and intend to keep the public apprised of our work.

III. Specific Alignment Opportunities

In an effort to advance the goals identified in the Affordable Care Act, and in line with the CMS three-part aim—better care for individuals, better health for populations and lower costs through improvement—the Medicare-Medicaid Coordination Office has been engaged in ongoing discussions with numerous and diverse stakeholders. The Medicare-Medicaid Coordination Office has used input from these discussions to develop a comprehensive list of areas in which the Medicare and Medicaid programs have conflicting requirements that prevent dual eligible individuals from receiving seamless, high quality care. Those areas fall into the following broad categories:

(1) Coordinated Care.

(2) Fee-for-service benefits (FFS).

(3) Prescription Drugs.

(4) Cost Sharing.

(5) Enrollment.

(6) Appeals.

Each of these broad categories and the specific opportunities for alignment identified to date can be found in Addendum 1. We invite public comment on these opportunities. These include opportunities to align existing program requirements, as well as preventing future conflicts when new programs are scheduled to be implemented (for example, coordinating seamless transitions between Medicaid, Medicare, and coverage under the Health Insurance Exchanges that will be established under section 1311 of the Affordable Care Act). This list will be continually updated as progress is made and new opportunities are identified. We look forward to continued collaboration with stakeholders as the Alignment Initiative proceeds.

IV. Questions and Comments

We are interested in your comments on this initiative. As you consider your comments, we are particularly interested in your feedback concerning how misalignments between specific Medicare and Medicaid requirements impact access to high-quality care. We offer the following questions to help guide your consideration of this issue and review of this notice. These questions are framed by the various goals and requirements that Congress articulated in establishing the Federal Coordinated Health Care Office.

  • How can the Medicare and Medicaid programs better ensure dual eligible individuals are provided full access to the program benefits?
  • What steps can CMS take to simplify the processes for dual eligible individuals to access the items and services guaranteed under the Medicare and Medicaid programs?
  • Are there additional opportunities for CMS to eliminate regulatory conflicts between the rules under the Medicare and Medicaid programs?
  • How can CMS best work to improve care continuity and ensure safe and effective care transitions for dual eligible beneficiaries?
  • How can CMS work to eliminate cost-shifting between the Medicare and Medicaid programs? How about between related health care providers?
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Authority: Section 2602 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010).

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Dated: March 16, 2011.

Donald M. Berwick,

Administrator, Centers for Medicare & Medicaid Services.

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1.  Data based on Centers for Medicare & Medicaid Services (CMS) Enrollment Database, Provider Enrollment, Economic and Attributes Report, provided by CMS Office of Research, Development and Information, July 2010.

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2.  CMS FFY 2007 MSIS Data; Medicare Payment Advisory Commission, Aligning Incentives (June 2010), Coordinating the Care of Dual-Eligible Beneficiaries, Chapter 5, 133.

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3.  In 2011, poverty is defined as $10,890 for an individual and $14,710 for married couples. Federal Register Notice, Vol. 76, No.13 Thursday, January 20, 2011. Available at:​poverty/​11fedreg.pdf.

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4.  Medicare Payment Advisory Commission, Aligning Incentives in Medicare (June 2010), Coordinating the Care of Dual-Eligible Beneficiaries Chapter 5, 132. Available at:​documents/​Jun10_​EntireReport.pdf.

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5.  Chronic Disease and Co-Morbidity among Dual Eligibles: Implications for Patterns of Medicaid and Medicare Service Use and Spending. Kaiser Commission on Medicaid and the Uninsured,1. Kaiser Family Foundation. July 2010. Available at:​medicaid/​upload/​8081.pdf.

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6.  Id, at 1.

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7.  The Lewin Group, Individuals Living in the Community with Chronic Conditions and Functional Limitations: A Closer Look (Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, USDHHS, January 2010), at p. 22.​daltcp/​reports/​2010/​closerlook.pdf.

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8.  The Medicare Payment Advisory Committee (MedPAC), A Data Book: Healthcare spending and the Medicare program, June 2010. Available at:​documents/​Jun10_​EntireReport.pdf.

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9.  Kaiser Family Foundation, The Role of Medicare for the People Dually Eligible for Medicare and Medicaid. January 2011. Available at:​medicare/​upload/​8138.pdf.

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10.  See Exec. Order No. 13563, 76 FR 14 (Jan. 18, 2011). Available at:​the-press-office/​2011/​01/​18/​improving-regulation-and-regulatory-review-executive-order (“Improving Regulation and Regulatory Review”).

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11.  See Memorandum for the Heads of Executive Departments and Agencies, 74 FR 15, 3825 (Jan. 26, 2009). Available at:​2009/​pdf/​E9-1777.pdf (“Transparency and Open Government”).

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[FR Doc. 2011-11848 Filed 5-11-11; 11:15 am]