States Use Managed Care, PACE, FAIs to Boost Dual Eligible Care Coordination

Updated 5/2/2023: This article's title has been updated to say "States Use Managed Care, PACE, FAIs to Boost Dual Eligible Care Coordination." A previous version misspelled the acronym FAI as FIA.

States that use managed care for dual eligible populations often employ a Financial Alignment Initiative or Program of All-Inclusive Care for the Elderly (PACE) alongside these solutions, according to an issue brief assessing dual eligible care delivery from Kaiser Family Foundation (KFF).

Out of the 28 states that offered Medicaid benefits to dually eligible individuals through managed care, 21 states also offered either PACE or a Financial Alignment Initiative.

Overall, 14 states had managed care and PACE, two states had managed care and a Financial Alignment Initiative, and five states had all three options. Seven states had managed care without supporting coordinated care organizations.

PACE, a program that offers medical and social services benefits to individuals who meet certain criteria, has had positive outcomes, the researchers noted. They added that the Financial Alignment Initiative—and the Medicare-Medicaid plans that often result—has had a mixed impact. CMS is expected to end the Medicare-Medicaid model in the next two years.

Meanwhile, 23 states did not use managed care to serve their dual eligible beneficiaries. Most of these states were in the southeast (Louisiana, Mississippi, Alabama, Georgia, South Carolina, North Carolina) and northwest (Washington, Montana, North Dakota, South Dakota, and Wyoming), along with other states scattered across the nation.

States without comprehensive managed care also used PACE and the Financial Alignment Initiative to coordinate care, accounting for nearly half of the states that did not have comprehensive managed care. Seven states without comprehensive managed care used PACE. Four states had both PACE and a Financial Alignment Initiative.

Seven states did not have a managed care approach but did employ a Financial Alignment Initiative. Of these, most plans leveraged private plans for the Financial Alignment Initiative.

The remaining 12 states did not have the two common care coordination support solutions.

Care coordination can be especially challenging in dual eligible special needs plans. Most states have dual eligible special needs plans (46 states).

There are three types of plans based on the level of integration—coordination-only, highly integrated, and fully integrated. Most dual eligible special needs plans are coordination-only, the lowest level of integration. Sixteen states have more than one type of dual eligible special needs plan available and 18 have the highest integration level available (fully integrated).

Twenty-nine states added more requirements to the dual eligible special needs plans contracts to improve Medicare-Medicaid care coordination. More than half of these states did not have contracts to integrate at the highest level. Some states required supplemental benefits coverage in their contracts and others required integrating member materials and rectifying the grievance and appeals system.

While dual eligible special needs plans have the best enrollment among the strategies states use to bolster care coordination, most states have not achieved high levels of integration through this model.

“The tension between retaining state flexibility and ensuring that more highly integrated arrangements are available in all states is one of many challenges of developing new approaches to coordinating care. Other challenges include the heterogeneity of dual-eligible individuals, their need for varied but often quite complex or costly health and social services, and differing financing streams from which these programs are funded,” the researchers concluded.

Experts indicated in separate resources that payers seeking to enter a dual eligible market should know that the enrollment process is becoming more selective, coverage is expanding, and enrollee advisory committees and standalone contracts are necessary.