[Federal Register Volume 76, Number 94 (Monday, May 16, 2011)]
[Proposed Rules]
[Pages 28196-28207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11848]



Centers for Medicare & Medicaid Services

42 CFR Chapter IV


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

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

ACTION: Request for information.


SUMMARY: 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.''

DATES: 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.

ADDRESSES: 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 http://www.regulations.gov. Follow ``Submit a comment'' 
    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 

(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 

    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.

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

    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: http://www.regulations.gov. 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 

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ill 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\

    \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.
    \2\ CMS FFY 2007 MSIS Data; Medicare Payment Advisory 
Commission, Aligning Incentives (June 2010), Coordinating the Care 
of Dual-Eligible Beneficiaries, Chapter 5, 133.
    \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: http://aspe.hhs.gov/poverty/11fedreg.pdf.
    \4\ Medicare Payment Advisory Commission, Aligning Incentives in 
Medicare (June 2010), Coordinating the Care of Dual-Eligible 
Beneficiaries Chapter 5, 132. Available at: http://medpac.gov/documents/Jun10_EntireReport.pdf.
    \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: http://www.kff.org/medicaid/upload/8081.pdf.
    \6\ Id, at 1.
    \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. http://aspe.hhs.gov/daltcp/reports/2010/closerlook.pdf.
    \8\ The Medicare Payment Advisory Committee (MedPAC), A Data 
Book: Healthcare spending and the Medicare program, June 2010. 
Available at: http://www.medpac.gov/documents/Jun10_EntireReport.pdf.
    \9\ Kaiser Family Foundation, The Role of Medicare for the 
People Dually Eligible for Medicare and Medicaid. January 2011. 
Available at: http://www.kff.org/medicare/upload/8138.pdf.

    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.

    \10\ See Exec. Order No. 13563, 76 FR 14 (Jan. 18, 2011). 
Available at: http://www.whitehouse.gov/the-press-office/2011/01/18/improving-regulation-and-regulatory-review-executive-order 
(``Improving Regulation and Regulatory Review'').

    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 

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partners, 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.

    \11\ See Memorandum for the Heads of Executive Departments and 
Agencies, 74 FR 15, 3825 (Jan. 26, 2009). Available at: http://edocket.access.gpo.gov/2009/pdf/E9-1777.pdf (``Transparency and Open 

    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 http://www.cms.gov/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 
     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 
     How can CMS best work to improve care continuity and 
ensure safe and effective care transitions for dual eligible 
     How can CMS work to eliminate cost-shifting between the 
Medicare and Medicaid programs? How about between related health care 

    Authority: Section 2602 of the Patient Protection and Affordable 
Care Act (Pub. L. 111-148, enacted on March 23, 2010).

    Dated: March 16, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.

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