The latest budget estimate from the California Department of Finance concluded that the state’s Coordinated Care Initiative, which includes the CMS-backed Cal MediConnect (CMC) duals demonstration, is not cost effective, meaning CCI will officially end in a year. But the Dept. of Health Care Services (DHCS) this month said it remains committed to the demo and plans to make certain modifications to continue being able to coordinate medical, behavioral health, long-term services and supports (LTSS) and home and community-based services through a single health plan for Medicare-Medicaid beneficiaries.

When CCI was established in 2013, the state’s director of finance by law was required to annually determine whether the program is cost efficient. The most recent budget estimates concluded that CCI will not be cost-effective, “thereby triggering this poison pill and ceasing all statutory provisions related to CCI as of Jan. 1, 2018,” explained Sarah Brooks, DHCS deputy director of health care systems, on a Jan. 12 stakeholder call. “Although CCI was not found to be cost effective in its entirety, the duals demonstration program has shown the potential to improve the care and quality for those enrolled and helped to keep individuals in their homes and community, thereby leading to likely long-term cost reductions.”

As a result, the governor’s budget proposal for 2017-2018 called for continuing the core components of the demo for another two years in line with the extension offered by CMS in 2015. The state, which is by far the largest in the 10-state capitated duals demo, has experienced a much higher opt-out rate than others and has undertaken a variety of efforts to increase participation, such as streamlined enrollment (MAN 9/1/16, p. 1). Approximately 113,000 beneficiaries are currently enrolled in CMC, and hundreds of thousands more are receiving coordinated LTSS through their Medi-Cal plans as part of the larger CCI initiative, said Brooks. Nearly 2,000 were enrolled in CMC through the streamlined process.

Through the proposed extension, DHCS will continue mandatory enrollment of dual eligibles and maintain the integration of LTSS into managed care for two years. The state will, however, make certain “basic changes” to take out some components that were found not to be cost-effective, explained Brooks. These include discontinuing in-home supportive services (IHSS) as a health plan benefit. Eligible beneficiaries will still be able to receive IHSS as a fee-for-service benefit, while funding for IHSS will no longer be included in the capitation rates for plans.

Molina Healthcare, Inc., which is one of 10 participating CMC managed care organizations and serves approximately 12,000 dual-eligible beneficiaries through two CMC plans, cheered the state’s intention to continue the demo. “We see this as an acknowledgement of the promising effort the health plans have made to deliver integrated care and as an opportunity to further work toward cost savings while coordinating care on behalf of members in Medi-Cal and Medicare,” said Deborah Miller, plan president of Molina Healthcare of California.

A replay of the stakeholder call is available at https://vimeo.com/199234035.