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CMS approves Washington's FFS dual eligible demonstration

Washington State has received federal approval to test a managed fee-for-service model for Medicaid-Medicare eligible patients in a demonstration that is expected to save up to $14 million over the next five years.

The voluntary program, called HealthPathWashington, starts in April, 2013 and is targeted at 30,000 of the state's highest risk 115,000 dual eligible patients. The demonstration will be jointly run by the Washington Health Care Authority and Department of Social and Health Services. It builds on the state's integrated managed care model for Medicaid patients with chronic conditions, and is partly guided by the Affordable Care Act's home health option.

The program will involve three-way contracts between health plans, the state and the Centers for Medicare & Medicaid Services, and will use multidisciplinary teams that manage care for patients across specialists, mental and behavioral health providers and community support organizations.

Washington is the first state to receive approval for a Medicaid-Medicare demonstration project using CMS's managed fee-for-service model. Massachusetts received the first approval for its other model, capitated managed care. Eighteen states are proposing to test the capitated model, five are proposing to test managed fee-for-service and three, including Washington, want to test both.

Washington health officials are optimistic the fee-for-service model will  align financial incentives among providers, payers and the state. They think that the state Medicaid agency's predictive modeling software and data system, called PRISM, will make managed care for dual eligible patients (and the Medicaid patient population in general) much more evidence-based. PRISM aggregates and analyzes claims, billing and service data, and is planned to incorporate electronic medical record data sometime before 2017. It's used primarily by case management teams, but also by providers and insurers.  

"HealthPathWashington synthesizes the extensive intelligence we have gathered from beneficiaries, providers and multiple levels of government into strategies that will improve clinical coordination and care statewide," Department of Social and Health Services secretary Robin Arnold-Williams and Health Care Authority director Doug Porter wrote in the demonstration proposals.

The aim is "to break down barriers that prevent service integration" and to leverage IT systems as a way to "increase coordination with medical services," Arnold-Williams and Porter wrote. 

[See also: Kaiser study looks for evidence of succesful dual eligible programs]

Developed in-house by the Department of Social and Health Service's research and data division, PRISM helps care management teams track the highest risk patients and focus clinical and community support interventions to prevent unecessary hospitalizations. PRISM started piloting in 2007 for a care management project and is currently used by 650 care managers.

Along with a few other states, Washington lawmakers and health officials have been trying to transition the state's healthcare system toward one that is more cost efficient and more patient-centered. The Medicaid home model that will be the basis for the dual eligible demonstration was expanded partly because of a recent state law directing health agencies to encourage patient-centered health models when contracting for Medicaid managed care or government employee insurance.

In July, the Washington Health Care Authority's new managed care contracts took effect for  about 700,000 Medicaid patients, and lasts until 2014, when the Medicaid program expands under the ACA. Washington's five managed care plans include Community Health Plan of Washington, Molina Healthcare of Washington, Coordinated Care Corp., UnitedHealthcare and Amerigroup.

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