Demonstration Counties

The California Department of Health Care Services (DHCS)  has announced the initial four counties to participate in a proposed three-year demonstration project aimed at improving the coordination of care for low-income seniors and persons with disabilities who are dually eligible for Medicare and Medi-Cal.

Current state law permits implementation in 2013 in the four named counties. Pending further state and federal authority, readiness reviews and preparations, the state believes it will be possible to conduct the demonstration in up to four additional counties in 2013: San Bernardino, Riverside, Santa Clara, and Alameda.

“Currently, most dual eligible beneficiaries access services through a complex system of disconnected programs that often leads to beneficiary confusion, delayed care, poor care coordination, inappropriate utilization and unnecessary costs, issues we are addressing with this proposal,” DHCS Director Toby Douglas said in a press release. “The goal is to design a seamless system that helps dual eligible beneficiaries get the health care services they need and improve health outcomes in a more fiscally efficient manner.”

California has approximately 1.1 million people enrolled in both Medicare and Medi-Cal. They are among the state’s highest-need and highest-cost users of health care services, accounting for nearly 25 percent of Medi-Cal spending. The proposed three-year project would enroll a portion of California’s dual eligible beneficiaries into integrated care delivery models. An estimated $678.8 million in General Fund savings is expected in fiscal year (FY) 2012-13, increasing to $1 billion in 2013-14.

As part of the announcement, the state released a comprehensive draft proposal for public comment that outlines the demonstration project. It is funded by the Affordable Care Act and requires the approval of the federal Centers for Medicare & Medicaid Services (CMS).

The demonstration project is a key part of the Governor’s Coordinated Care Initiative, which is aimed at improving beneficiary health outcomes and care quality, while achieving substantial savings from the rebalancing of care delivery away from institutional settings and into people’s homes and communities.

The announcement followed an extensive public stakeholder process and rigorous site selection process.

A team involving departments across the California Health and Human Services Agency reviewed 22 proposals from health plans operating in ten counties. The review team determined that the selected health plans would, upon implementation, improve dual eligible beneficiaries’ care experiences and health outcomes.

“We will build upon California’s existing structure of managed care health plans, county mental health programs and home- and community-based social services to achieve the financial and service integration necessary to accomplish this goal,” added Douglas.

Under the demonstration, the selected health plans would receive a blended monthly payment from Medicare and Medi-Cal to provide their enrollees all needed services. Beneficiaries will have a single health plan membership card and a care team to help coordinate their services.

Moreover, all medical and long-term services and supports would be integrated as managed care benefits, and strong coordination of mental health and substance use services will be required. A key component for helping people avoid unnecessary hospitalizations and nursing home admissions will be the In-Home Supportive Services (IHSS) program, the nation’s largest personal care provider program.

“In-Home Supportive Services is an important service that assists more than 440,000 people with services they need to live independently at home,” said Will Lightbourne, director of the California Department of Social Services, which oversees the IHSS program. “IHSS will remain an entitlement program and the consumers’ current rights, including the right to self-direct their care by hiring, firing and directing their IHSS workers, will not change.”

Pending approval from CMS, the state would begin notifying beneficiaries of upcoming changes due to the proposed demonstration in the fall of 2012. Enrollment would begin in January 2013. Beneficiaries can choose to keep their Medicare benefits separate from this integration, but those who do not opt out of the demonstration will be enrolled on a phased-in basis throughout 2013.

Based on a DHCS press release from April 2012.

  1. Cecille Recio

    What can the beneficiary opt out if they do not want to participate in the demonstration?

    • Sarah

      Please see the Frequently Asked Questions for an answer to your question about opting out of the demonstration ( Basically, several months before the demonstration begins (sometime between March and June of 2013), each eligible beneficiary will start receiving a series of notices that describe the demonstration plan, the benefits offered, and the provider network, along with their enrollment options. People may call a phone number or return a form via mail to notify the state of their choices related to the demonstration.

  2. ErikW

    I have a very expensive medication that my Part D Humana now covers. If I decide to “opt out” and keep my Medicare, will I be able to keep my Part D also?

    • Admin

      Yes, you will keep all of your traditional Medicare benefits if you opt out of the program. This includes your Part D benefits.

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