Financing Integrated Care in the Financial Alignment Demonstration

Abstract

The Centers for Medicare & Medicaid Services will test integrated financing for Medicare and Medicaid services through two models in the Financial Alignment Demonstration, a capitated model and a managed fee-for-service model. The goal of integrating financing is to better align incentives to efficiently deliver needed services to Medicare-Medicaid enrollees. This article discusses the characteristics of the models, what integrated financing means under each model, how savings may be achieved, challenges to implementation, and the potential for long-term reform and integrated payment.