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Financial Alignment Initiative for Beneficiaries Dually Eligible for Medicaid and Medicare

Medicaid and Medicare together provide health coverage for approximately 12.2 million low-income seniors and people with disabilities who are dually eligible for both programs. The Centers for Medicare & Medicaid Services’ Medicare-Medicaid Coordination Office has implemented the Financial Alignment Initiative to improve care and reduce program costs for these beneficiaries, as well as improve coordination between the Medicaid and Medicare programs.

As of January 2022, 11 states participated in the Financial Alignment Initiative either under a capitated model, a managed fee-for-service model, or an alternative model, with approximately 470,000 individuals enrolled. Demonstrations in 3 states ended in 2019, and 11 states continued their demonstrations into 2022. California is planning to end its demonstration in 2023.

This issue brief describes the overall design of the initiative, and compares key provisions of the approaches in the capitated model demonstrations in 11 states. It provides updated information on enrollment, plan, and state participation in the demonstration, and changes in payment methodologies. A brief summary of each capitated model is available at the links below.