Medicare-Medicaid Integration
CMS intends to partner with up to two states (to be determined) in the initial cohort to develop a standardized framework for ACO-Medicaid partnership arrangements. During a planning phase running from March 2026 through December 2027, CMS will work with interested states to define mechanisms for data sharing, care coordination, and aligned accountability across Medicare and Medicaid. State selection will not occur until after the planning period. (RFA §VII.D)
State Selection Criteria
CMS will select states based on: (RFA §VII.D)
- Large, high-cost dual populations: States with significant concentrations of high-cost full-benefit dually eligible beneficiaries, particularly those with high long-term services and supports (LTSS) utilization
- High-cost markets: States with strong savings potential based on high regional Medicare costs or high cost growth
- ACO penetration: States with meaningful ACO penetration among full-benefit dually eligible beneficiaries
- Disposition toward integrated care: Historical state efforts including D-SNP contracting via SMAC agreements or participation in the Financial Alignment Initiative (FAI)
- Medicaid data quality: Completeness of enrollment, utilization, and cost data in T-MSIS Analytic Files
Partnership Arrangement Framework
CMS and selected states will develop a framework for standardized partnership arrangements between ACOs and MCOs or SMAs. CMS would NOT be a party to the partnership agreements or subject to associated risk-sharing. At minimum, partnership arrangements will include: (RFA §VII.D)
- Formal relationship: Established agreement between the ACO and the MCO or SMA (or designee)
- Roles and responsibilities: Documented for each entity regarding dually eligible beneficiaries
- Care coordination strategies: Integrated care plans, primary care connection processes, risk stratification, community transition support for long-stay nursing facility patients, value-based purchasing with nursing facilities (factoring hospitalization rates)
- Bilateral risk sharing: Arrangements promoting accountability across Medicare and Medicaid (e.g., SMAs/MCOs share in ACO savings from reduced hospitalizations or avoided SNF stays)
- Data sharing: Terms, conditions, and processes for improved data integration, compliant with HIPAA and all applicable laws
Medicaid Enrollment-Based Alignment
CMS will align eligible full-benefit dually eligible beneficiaries to an ACO when they meet ALL criteria: (RFA §VII.D)
- Enrolled for Medicaid benefits in the MCO or State Medicaid FFS program that partners with the ACO
- Enrolled in Original Medicare
- Meet standard LEAD alignment requirements
- Reside in the ACO’s service area
Key Insight — Alignment Hierarchy: Medicaid enrollment-based alignment is subordinate to both claims-based and voluntary alignment methods. Beneficiaries already enrolled in integrated Medicare-Medicaid managed care (e.g., D-SNPs) are NOT eligible for LEAD alignment through this pathway.
Frequently Asked Questions
CMS has not yet named the states. The RFA specifies up to two states for the initial cohort, selected based on dual population size, cost, ACO penetration, integration history, and data quality. (RFA §VII.D)
The RFA does not specify direct Medicaid financial integration into LEAD settlement. However, partnership arrangements may include bilateral risk sharing where the Medicaid entity shares in ACO savings (e.g., from reduced hospitalizations). The ACO’s Medicare benchmark and settlement remain separate from Medicaid. (RFA §VII.D)
No. Beneficiaries already enrolled in integrated Medicare-Medicaid managed care options are not eligible for LEAD alignment through the Medicaid partnership. (RFA §VII.D)
