For Immediate Release - April 12, 2011

Massachusetts Awarded $1 Million in Federal Funding for Health Care Cost Containment and Quality Improvement Efforts

Federal funding to support quality, coordination and cost-effectiveness for Medicare-Medicaid eligibles

BOSTON - The Patrick-Murray Administration today announced that Massachusetts will receive $1 million in federal funds as part of a national initiative to promote quality, coordinated, and cost-effective care for individuals who are eligible for both Medicare and Medicaid. The funding, awarded by the federal Center for Medicare and Medicaid Innovation, will support and complement the Commonwealth's ongoing efforts to control rising health care costs, while investing in high quality care. Massachusetts was only one of 15 states to receive funding from the federal government under the initiative.

"Thanks to our landmark health care reform law, Massachusetts leads the nation in health insurance coverage for our residents," said Governor Deval Patrick. "The second phase of reform is focusing on controlling rising costs, while ensuring that our residents receive the highest quality of care available - and these additional resources will help us achieve that goal."

"Our administration continues to focus on providing higher quality and more affordable health care to Massachusetts residents. We thank our congressional delegation for these additional resources that will further our efforts," said Lieutenant Governor Timothy Murray.

This federal funding will support the creation of a demonstration project that integrates the Medicare and Medicaid financing, introduces care management and reforms service delivery of so-called "dual-eligibles," individuals who are eligible for both Medicaid and Medicare and are between the ages of 21 and 64. In Massachusetts, there are approximately 115,000 dual-eligibles. More than 75% of those have a chronic medical condition, such as asthma or chronic obstructive pulmonary disease, and 64% have been diagnosed with a mental illness or substance abuse issue.

This initiative is part of the Patrick-Murray Administration's broader effort to transform the health care system by restructuring the health care payment and delivery systems. In February, Governor Patrick filed legislation that encourages the creation of "integrated care organizations" comprised of groups of providers that work together to achieve improved health outcomes for patients at lower costs; provides benchmarks, standards and guidance for the transition to integrated care and global payments; and allows the Division of Insurance (DOI) to consider more criteria when making the decision to either approve or reject rate increase requests from both carriers and providers. Other state initiatives include the development of patient-centered medical homes, bundled payments, and accountable care organizations (ACOs).

"We thank the federal Centers for Medicare and Medicaid Services for investing in Massachusetts and in our commitment to finding cost-effective ways to provide high quality, more coordinated health care, particularly for people with complex health needs," said Secretary of Health and Human Services Dr. JudyAnn Bigby.

"Folks who are eligible for both Medicare and Medicaid are the sickest and poorest people enrolled in these programs," said Senator John Kerry. "While they account for a small share of enrollment, they make up a large share of the health care costs. We can't meaningfully reform health care without ensuring that government programs are working in the most efficient and effective manner for those who rely on these programs most."

"It's essential that we keep health care costs down while at the same time providing high-quality care. I'm pleased that Massachusetts will be receiving these federal funds," said Congressman Jim McGovern.

The Commonwealth will use this funding to complete the design of an integrated financing and care model and will show the federal government how it would structure, implement, and evaluate an intervention aimed at improving the quality, coordination, and cost-effectiveness of care for dual-eligibles. States that successfully complete the program design contract will be eligible for additional funding to support implementation.

MassHealth proposes to combine Medicare and Medicaid funding for dual-eligibles. By combining these two funding streams, MassHealth seeks to offer a broader menu of services that will better meet the needs of this population and in a more cost-effective way. The Commonwealth proposes to assume complete operational responsibility for the care of the dual-eligible population, comparable to its responsibility for the MassHealth-only membership; the state would assume the administration, management and oversight of all Medicare-funded and Medicaid-funded services. This model would significantly improve the alignment of financial incentives and improve provider accountability through the establishment of a global payment for all Medicare and Medicaid services. This unprecedented level of integration will contribute to better health outcomes for this population through the delivery of higher quality, more cost-effective, and person-centered care.

"This federal funding is a tremendous boost to our efforts to promote cost-effective, coordinated care for individuals who are eligible for both Medicare and Medicaid," said Medicaid Director Terry Dougherty.

MassHealth issued a Request for Information (RFI), "Integrating Medicare and Medicaid for Individuals with Dual Eligibility" to seek input regarding the development of the integrated model of care for dual-eligibles. The RFI is available on Comm-PASS ( ). Responses are due by May 6, 2011 at 5:00pm.

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