Illinois launched its demonstration on March 1, while California and Virginia’s demonstrations will start in April and Ohio’s will begin in May 2014. By the end of the year, if current timelines hold, 17 of the 18 states that remain in the demonstration will have implemented their FAD. This shows how the August 2011 CMS initiative, launched by the Medicare-Medicaid Coordination Office, is finally moving after a slower-than-expected start. States can choose from two shared savings models: 1) a fully capitated model, or 2) a managed fee-for-service (MFFS) model. Eleven of the 18 states in the FAD are pursuing a capitated model, four the MFFS model, two both models, and one an alternative approach.

In states implementing capitated demonstrations, plans stand to gain up to 1.5 million enrollees through active and passive enrollment. Further, plans with high quality scores related to care coordination and disease-specific care are eligible to earn back a quality withhold percentage applied up front to their capitation rates. As lives shift between plans and, in some states from FFS to managed care, manufacturers must ensure that beneficiaries in these new plans continue to have access to needed drugs. However, an opportunity exists to demonstrate how their products can help better manage and treat these complex patients and contribute to plans reaching their quality goals.

This article was excerpted from the March issue of Medicaid Monthly, which tracks the latest federal and state Medicaid activity in one comprehensive source. For access, contact Tiernan Meyer at TMeyer@avalere.com.