Michigan Memorandum of Understanding: What Advocates Need to

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Michigan Memorandum of Understanding:
What Advocates Need to Know
Introduction
The Michigan Department of Community Health (MDCH) and the Centers for Medicare and Medicaid
Services (CMS) entered into a Memorandum of Understanding1 (MOU) in April 2014 to pursue a dual
eligible demonstration project, MI Health Link. The MOU outlines the terms of what will eventually be
a three-way contract between the federal government, the state and selected health plans2 that will
provide integrated Medicare- and Medicaid-covered benefits to dually eligible individuals. The
demonstration will run in four regions of the state, in which approximately 100,000 dually eligible
beneficiaries reside: the Upper Peninsula; Southwest Michigan; and Wayne and Macomb counties.
Unique to Michigan, the health plans, termed Integrated Care Organizations (ICOs), will contract with
existing Michigan Prepaid Inpatient Health Plans (PHIPs) to provide behavioral health services.
This fact sheet provides consumer advocates with the basics on the MOU and key issues to watch.
Enrollment
Highlights
 Enrollment into the MI Health Link demonstration program will launch with two phases of
voluntary enrollment, followed by two phases of passive enrollment, for each region.
Upper Peninsula region
Southwest region
Wayne County
Macomb County

Voluntary enrollment
October 1, 2014 (effective
January 1, 2015)
October 1, 2014 (effective
January 1, 2015)
March 1, 2015 (effective May
1, 2015)
March 1, 2015 (effective May
1, 2015)
Passive Enrollment
April 1, 2015
April 1, 2015
July 1, 2015
July 1, 2015
ICOs designated as low-performing plans by CMS will not be eligible for passive enrollments.
United Healthcare Community Plan, Inc. is one of the contracted health plans and has been
designated with a low-performing icon. United will be serving Wayne and Macomb counties.
1
See MOU: http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/MedicareMedicaid-Coordination-Office/FinancialAlignmentInitiative/Downloads/MIMOU.pdf
2
MLTSS Weekly Update, page 6: http://mltssnetwork.org/wp-content/uploads/2014/04/MLTSS-Weekly-Update-4-172014.pdf
Community Catalyst is a national non-profit advocacy organization building
consumer and community leadership to transform the American health care system.
www.communitycatalyst.org
Page 2

Michigan Memorandum of Understanding Fact Sheet, April 2014
In addition to the state’s enrollment broker, the Michigan Medicare-Medicaid Assistance
Program (MMAP), a free benefit counseling service,3 will work with enrollees and stakeholders
on outreach and education, options counseling and peer-to-peer options counseling. MMAP will
do this by building upon its partnership with Michigan’s Area Agencies on Aging and entities
like senior centers and Centers for Independent Living.
Long Term Services and Supports
Highlights
 ICOs will be required to offer a self-determination option as part of their long-term services and
supports (LTSS) benefit package.4
 The LTSS Supports Coordination services will be provided by the ICO either directly or
contractually. An LTSS Supports Coordinator will be offered to all enrollees that meet the state’s
Medicaid Nursing Facility Level of Care and will take part in the assessment process.5 Each
assessment will take into account individual preferences and goals, functional needs, social
supports, behavioral and substance use disorder risk status, LTSS needs and quality of life.
 The ICO is responsible for providing directly, or contractually, a range of LTSS Supports
Coordination services.6
 MDCH has developed transition requirements that detail the continuation of existing providers
for LTSS.7 For example, ICOs must allow certain waiver enrollees to maintain their personal
care services providers at the current level for 180 days. Enrollees receiving Medicaid Nursing
Facility services can stay at their facility if it contracts with the ICO. Alternatively, the ICO
could execute a single case agreement with the facility or pay it on an out-of-network basis for
the duration of the Demonstration.
Care Coordination
Highlights
 ICOs will conduct a three-step assessment process: initial screening, a level one assessment and
a level two assessment.8 ICOs will be required to submit policies and procedures as part of the
readiness review process on their three-step assessment process.
 All enrollees will have access to care coordination services through a care coordinator and will
have an integrated care team (ICT). Through the ICT, the enrollee will develop a personalized
care plan. ICT members will be trained in the person-centered planning process.
 ICOs will be required to contract with PIHPs to coordinate and manage care for those with
behavioral health, substance use disorders and/or intellectual/developmental disabilities needs.
 The ICT will include an LTSS Supports Coordinator and/or a PIHP Supports Coordinator9
depending on the primary needs of the enrollees; if the enrollee has both LTSS and behavioral
3
Learn more about MMAP at http://mmapinc.org/
See MOU Appendix 7 page 74
5
See MOU Appendix 7 page 64 & 70
6
See MOU Appendix 7 page 70
7
See MOU Appendix 7 Table 7-C page. 82
8
All enrollees will receive an initial screening at the time of enrollment and a level 1 assessment. The level two assessment is
for enrollees identified as having needs related to LTSS, behavioral health, substance use disorder, or
intellectual/developmental disabilities or complex medical needs. See MOU Appendix 7 page 63-65
4
Community Catalyst is a national non-profit advocacy organization building
consumer and community leadership to transform the American health care system.
www.communitycatalyst.org
Page 3

Michigan Memorandum of Understanding Fact Sheet, April 2014
health needs, the ICO care coordinator will collaborate with both the LTSS Supports Coordinator
and/or a PIHP Supports Coordinator.
A “Care Bridge”10 function will allow the ICT to facilitate access to the care plan and support the
flow of information between members of the care team. The Care Bridge is the care coordination
framework by which the enrollees care and care team will facilitate services and supports. This
function includes an electronic database which will maintain an “Integrated Care Bridge Record”
to facilitate the flow of information between each enrollee and her or his care team.
Benefits and Provider Networks
Highlights
 Through the demonstration, enrollees will have access to all Medicare and Medicaid benefits. In
addition to the Medicare and Medicaid benefits, ICOs will be required to provide services in the
1915 (b) and (c) waivers.11 ICOs will have discretion to offer flexible benefits based upon an
enrollee’s care plan to address specific needs.
 The PIHPs will offer services related to behavioral health, substance use disorders and/or
intellectual/developmental disabilities. The State will contract directly with PIHPs for the
Medicaid services and the ICOs will be required to contract with PIHPs for the Medicare funded
behavioral health services.12
 The ICOs are required to ensure adequate provider networks and a choice of providers. This
includes contracting with independent providers of the enrollee’s choice.
 The ICOs must adhere to Medicare requirements for network standards. This includes elements
such as time, distance and/or minimum number of providers or facilities.
Consumer Engagement
Highlights
 ICOs are required to have one consumer advisory board and a process for that board to provide
input to the governing board. A member of the governing board will sit on the advisory board
and serve as a liaison to the governing board.
 The consumer advisory board must reflect the diversity of the population served. There should
be a mix of enrollees, caregivers and local representatives from the community, e.g., advocacy
groups, faith-based organizations, etc. In addition, at least one-third of the consumer advisory
board must be enrollees.
 ICOs must have written policies and procedures for consumer advisory board elections; this
includes how the board will be elected, term length, filling of vacancies, and procedures for
notifying enrollees.
 The consumer advisory board will meet quarterly and keep a record of its meetings. The ICOs
must accommodate and support the board, e.g., provide transportation, appropriate
communications and interpretation services, and other relevant measures that encourage fully
representative participation.
9
See MOU Appendix 7 page 70-71
See MOU Appendix 7 page 62
11
See MOU Appendix 7 page 79-81
12
See MOU Appendix 7 page 80
10
Community Catalyst is a national non-profit advocacy organization building
consumer and community leadership to transform the American health care system.
www.communitycatalyst.org
Page 4
Michigan Memorandum of Understanding Fact Sheet, April 2014
Financing and Payment
Highlights
 The demonstration is expected to achieve savings of 1 percent in Year One, 2 percent in Year
Two and 4 percent in Year Three. If at least one-third of the ICOs have Year One losses
exceeding 3 percent of revenue, the Year Three savings percentage will be reduced to 3 percent.
 The Medicaid portion of the capitated rate is determined by assigning each enrollee to a rating
category. Medicaid will be using three rating categories:
o People living in nursing facilities
o People requiring a nursing facility level of care, but living in the community and enrolled
in the 1915(c) waiver
o All other beneficiaries
 To provide an incentive for community-based care over nursing facility care, ICOs will receive a
temporary higher “transition rate” for beneficiaries who are moving out of a nursing facility and
into community settings. Conversely, ICOs will receive a temporary lower transition rate for
beneficiaries moving into a nursing facility.
 To limit ICO gains or losses and thereby reduce the risk to beneficiaries, the state and CMS will
use risk corridors in Year One of the demonstration. The first corridor will put ICOs at full risk if
expenses are in the range from 3 percent below to 3 percent above the capitation rate. In the
second corridor, the ICO and CMS/State will share the risk 50-50 for the next 6 percent. The
third corridor again assigns ICOs full risk for costs beyond 9 percent above or below the
capitation rate.
 Starting in Year Two, ICOs will be held to a Medical Loss Ratio (MLR) of 85 percent.
 CMS and the State will review the rates and payment parameters if two or more ICOs show
MLRs below 90 percent over all regions in which those plans participate, or in the event that two
or more ICOs show annual losses exceeding 5 percent over all regions in which those plans
participate.
Cultural Competency & ADA Compliance
Highlights
 ICOs and providers must be in compliance with the Americans with Disabilities Act (ADA) and
the Olmstead decision. This means ICOS must contract with providers that demonstrate the
ability to offer physical access and flexible scheduling.
 As a part of readiness review, each ICO will have to develop training on cultural competency
and disability for its staff. In addition, providers in ICO networks must participate in disability
training.
 ICOs and providers must communicate with their enrollees in ways that accommodate their
needs. This includes providing accommodations for those with hearing impairments, and
interpreters to those for whom English is not the primary language.
 All materials developed should be sensitive to the needs of the enrollees; this includes
individuals with disabilities, those individuals with functional limitations and those with limited
English proficiency.
Key Issues to Watch
Community Catalyst is a national non-profit advocacy organization building
consumer and community leadership to transform the American health care system.
www.communitycatalyst.org
Page 5





Michigan Memorandum of Understanding Fact Sheet, April 2014
The State is working on an intelligent assignment process for passive enrollment, but does not
offer details on how this will be implemented. The three-way contract should specify that the
State will take into account previous provider relationships and LTSS needs and usage in
assigning enrollees to ICOs.
The readiness review process will be critical to monitor in order to ensure that the ICOs have the
capacity and competency to provide LTSS, particularly the self-determination option and how
they will provide supports to consumers to facilitate self-direction.
The language on materials translation is broad, and it will be important to urge the state and
CMS to provide details on which languages materials will be provided in translation and ensure
that enrollees will have access to them as needed.
There are several concerns related to the financing and payment mechanisms13 .
o There is no backup evidence for the expected savings amounts14.
o The Medicaid rating categories are too broad. At the very least the number of rating
categories should be expanded in order to better account for the complexity of
beneficiaries’ needs and the costs associated with those needs.
o The three-way contract should provide further detail on how long the transition rate will
apply for those moving from the community to a nursing facility15. The rate for people
moving into the community is similarly vague.
o One year is an insufficient amount time to apply risk corridors given the large costs
associated with start-up and the fact that enrollees coming into the demonstration will
have been previously underserved.
The language in the MOU related to cultural competency and ADA compliance is positive, but
details are lacking. Advocates must continue to push CMS and the state to ensure that during
readiness review and in three-way contracts, ICOs truly demonstrate their ability to provide
services in a manner that is preferred by the beneficiary.
An overarching point advocates must remember and push is that the details matter in this demonstration.
Readiness review is the next important milestone in the demonstration and ICOs must show the capacity
and competency to take on this new population. The three-way contracts must provide a concrete
roadmap to ensure consumer protections are not sacrificed.
Authored by,
LEENA SHARMA
State Advocacy Manager, Voices for Better Health
13
Risky Business: Capitated Financing in the Dual Eligible Demonstration Projects, Community Catalyst. Available:
http://www.communitycatalyst.org/doc-store/publications/risky-business_capitated-model.pdf
14
Community Catalyst Letter to HHS on Savings Expectations. Available: http://www.communitycatalyst.org/docstore/publications/Sebelius_duals_demo_projects_savings_letter_July2012.pdf
15
See MOU Appendix 6 page 47
Community Catalyst is a national non-profit advocacy organization building
consumer and community leadership to transform the American health care system.
www.communitycatalyst.org

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