CMS, New York State testing new model of coordinated care for dual eligibles

Individuals who are eligible for both Medicare and Medicaid are often faced with challenges when navigating through the programs’ various rules, benefits, and providers. Some such individuals, known as “dual eligibles,” may also have intellectual or developmental disabilities and require access to various health care providers. In the attempt to provide a “more coordinated, person-centered experience” for such enrollees, CMS and New York State are teaming up to test a new model of providing care that focuses on coordinating acute care and long-term care needs.

New Model

CMS announced its partnership with the New York State Department of Health (NYSDOH) and the Office for People with Developmental Disabilities (OPWDD), that will create the Fully Integrated Duals Advantage for Individuals with Intellectual and Developmental Disabilities (FIDA-IDD), which will be a demonstration project aimed at better serving dual eligible enrollees who have intellectual and developmental disabilities. According to CMS, the FIDA-IDD Demonstration will provide more opportunities for individuals to be involved in directing their own services and care planning while living as independently as possible in their communities.

Under the FIDA-IDD model, 20,000 dual eligible enrollees in the downstate New York region will be offered the opportunity to participate in the voluntary program. The program will be offered through Partners Health Plan in New York City, Long Island, and Rockland and Westchester Counties. Voluntary enrollment will begin after April 1, 2016.


Section 2602 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) established the Federal Coordinated Health Care Office, known as the Medicare-Medicaid Coordination Office (MMCO) to better coordinate the Medicare and Medicaid programs to ensure that dual eligibles receive the benefits to which they are entitled. The MMCO partners with states through CMS’ Financial Alignment Initiative to create demonstration projects to test methods of providing integrated benefits to dual eligibles. Demonstrations such as FIDA-IDD that are approved under the Financial Alignment Initiative are intended to provide better care through a person-centered, integrated care approach.


The new model shares the general structure and goals with the Fully Integrated Duals Advantage (FIDA) Demonstration project, which is already in operation in New York, but it involves different populations and Medicare-Medicaid plans. Additionally, the new model (FIDA-IDD) does not allow for passive enrollment and includes benefits that are tailored to providing support to individuals who have intellectual and developmental disabilities.

The FIDA-IDD is operated under the Capitated Model, through which states and CMS contract with health plans that receive prospective, blended payments in exchange for providing dual eligibles with coordinated care. In order to participate in the FIDA-IDD Demonstration, plans must meet core Medicare and Medicaid requirements and must pass a comprehensive readiness review.

How it Works

The FIDA-IDD Plan will provide enrollees with an interdisciplinary care team, which will be based on the enrollees’ individual preferences and goals so as to ensure that enrollees’ medical, behavioral health, long-term services and supports, and social needs are integrated. The demonstration will include performance metrics established by CMS and New York to ensure high quality care. The plan also includes continuity of care requirements so that enrollees can continue to see their current providers as they transition into the FIDA-IDD Plan. Additionally, New York created the Independent Consumer Advocacy Network (ICAN), which is a free Ombudsman program intended to assist enrollees with appeals and other plan issues. The program will support individual advocacy and will provide New York and CMS with feedback on the plan’s performance relating to community integration, independent living, and person-centered care.

External Evaluation

Each demonstration under CMS’ Financial Alignment Initiative, including the FIDA-IDD, will be externally evaluated to measure its quality, beneficiary care experience, care coordination, costs, and support of community living. FIDA-IDD will also have a specific evaluation that will use a comparison group to analyze the demonstration’s impact.

Inpatient hospital and SNF deductible increases slightly for 2016

The annual inpatient deductible for calendar year (CY) 2016 will be $1,288, a $28 increase from the $1,260 CY 2015 deductible, according to an advance release of the CY 2016 inpatient hospital deductible notice from CMS. The Medicare Part A deductible covers patients’ shares of costs for the first 60 days of inpatient hospital care in a benefit period. The daily coinsurance amount for the 61st through 90th days of hospitalization will increase by seven dollars to $322 and the daily coinsurance for lifetime reserve days will increase by $14 to $644. Skilled nursing facility (SNF) coinsurance rates will increase by less than $4 to $161.00.

Percentage increase

The inpatient prospective payment system (IPPS) market basket percentage increase for 2016 is 2.4 percent and the multifactor productivity adjustment (MFP) is 0.5 percent. The percentage increase of IPPS hospitals that are meaningful users of electronic health records (EHRs) and submit quality data is 1.7 percent, while the average percentage increase for IPPS-excluded hospitals is 1.82 percent.

No comments requested

Per custom, CMS will waive notice and comment rulemaking in this matter, as the formulae used to calculate the hospital deductible and hospital and extended care services coinsurance amounts are imposed by statute. Furthermore, delaying publication would be contrary to the public interest. The notice will publish in the Federal Register on November 16, 2015.

CMS provides status of Recovery Audit Program enhancements

The Recovery Audit Program is undergoing a series of changes to improve the program’s accuracy and to allow providers more opportunities to provide feedback on the process. CMS detailed the recent and ongoing enhancements that it is making to the program, which includes more stringent requirements for recovery audit contractors (RACs) to ensure that they make valid determinations and are held accountable for their decisions.

Provider assistance

CMS has taken steps in assisting providers with compliance matters, including posting compliance tips on its website. CMS also established the Provider Relations Coordinator in order to offer providers the means to efficiently resolve matters that cannot be solved by a RAC.


In order to ensure that RACs are making valid determinations, CMS now requires them to maintain an overturn rate of less than 10 percent at the first level of appeal. The failure to do so will result in the RAC being placed on a corrective action plan. RACs are also required to maintain an accuracy of at least 95 percent, and the failure to do so will result in a progressive reduction of additional documentation request (ADR) limits. Additionally, the look-back period has been limited to six months from the date of service for all patient status reviews when claims are submitted within three months of the date of service. All RACs are required to have a physician Contractor Medical Director who is available to discuss improper payment identifications.

ADR limits

CMS revised the ADR limits for facility claims, which are diversified across all claim types of a facility. Additionally, CMS is not raising the ADR limits for physicians and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) providers and suppliers. CMS is also establishing ADR limits that are based on a provider’s compliance with Medicare rules.

In progress

CMS is working on developing a Provider Satisfaction Survey, which would give providers an opportunity to provide feedback on the RACs’ performance. Additionally, CMS will provide information about the program through increase public reporting and quality assurance activities so as to allow the provider community to have access to the Recovery Audit Program data.

Additional enhancements

RACs will have 30 days instead of 60 days to complete complex reviews and notify providers of their findings. RACs will also be required to wait 30 days to allow for a discussion request prior to sending a claim to the Medicare administrative contractor (MAC) for adjustment. RACs must also enhance their provider portals and broaden their review topics.

Contingency fees

All new contracts will withhold contingency fees for RACs until after the second level of appeals are exhausted.

Kusserow on Compliance: OIG continues to find that Medicare cost reports are not being properly reconciled

The Office of Inspector General (OIG) released another report in a series of studies noting weaknesses in reconciling hospital Medicare cost reports. Medicare supplements basic prospective payments for inpatient hospital services by making outlier payments for unusually high-cost cases. Medicare contractors refer hospitals’ cost reports to CMS for reconciliation of outlier payments that may be adjusted to account for the time value of any underpayments or overpayments. Beginning in April 2011, the Medicare Administrative Contractors (MAC) and Fiscal Intermediaries (FI) began reconciling inpatient rehabilitation facilities (IRF) outlier payments. In 2012, the OIG issued a report critical of CMS in their reconciliation of outlier payments.

The latest OIG report on the topic reviewed performance of the National Government Services, Inc. (NGS), the company that contracted with CMS to refer cost reports for reconciliation. This is the second OIG report this year on the same topic involving NGS, but in a different region. The OIG conducted other audit in this area and found significant problems, similar to previous findings including one for Novitas Solutions, Inc. (formerly Highmark Medicare Services, Inc.), and another last year for Noridian Healthcare Solutions, LLC. The OIG found in this latest report of NGS that:

  • 23 of the 80 Medicare hospital cost reports with outlier payments that qualified for reconciliation had unreliable cost-to-charge ratios (CCR);
  • Of the 57 remaining cost reports, NGS referred 35 to CMS as required, but failed to refer 22 others, including 10 that had not been settled and should have been referred to CMS for reconciliation over approximately $16.8 million that was due to Medicare. There were 12 other cost reports that NGS did not refer to CMS and which had been settled and had exceeded the reopening limit with an estimated financial impact to Medicare of $10.9 million; and
  • Of the 35 cost reports referred to CMS with outlier payments that qualified for reconciliation, NGS had reconciled the outlier payments associated with 11 of these cost reports, but NGS had not reconciled the outlier payments with the remaining 24 cost reports. The financial impact of the outlier payments for 22 of the 24 cost reports that were referred but not reconciled was approximately $102.5 million that was due to Medicare.

OIG recommendations

  • Review the 22 cost reports that qualified for referral and determine whether the cost reports may be reopened, reconcile the associated outlier payments, and refund the amounts due to Medicare and to the provider.
  • Reconcile outlier payments associated with the 24 cost reports that were referred, work with CMS to reconcile the associated outlier payments, finalize these cost reports, and ensure the return of funds to Medicare and to the provider.
  • Work with CMS to resolve $10,000 and $94.2 million in outlier payments that the OIG could not recalculate.
  • Ensure control procedures are in place so that all cost reports with qualifying outlier payments are referred and reconciled.
  • Review all cost reports submitted since the end of the audit period and ensure that those whose outlier payments qualified for reconciliation are referred and reconciled in accordance with federal guidelines.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.