States are entering a new phase of Medicare–Medicaid integration as the Financial Alignment Initiative (FAI) demonstration era has ended. FAI-participating states have transitioned to models built upon dual eligible special needs plans (D-SNPs). Many states that did not participate in the demonstrations have also continued to implement and refine D-SNP models for Medicare-Medicaid integration. At the same time, implementation of H.R. 1 managed care regulatory changes, and broader Medicaid fiscal pressures are increasingly consuming the same state capacity needed to design and operate Medicare-Medicaid integration programs.

While it would be easy for dual eligible policy to lose momentum in this environment, that would be a mistake. Individuals dually eligible for Medicare and Medicaid remain among the highest-need and highest-cost populations served by these programs. Integration affects cost predictability, provider alignment, and member experience. Poorly aligned systems increase fragmentation and administrative burden. Well-aligned systems create clearer accountability, improve care coordination, and incentivize high-quality care.

Well-aligned systems graphic

Well-aligned systems

Shared goals | Shared rules

Clearer accountability

Roles and responsibilities defined

Improved coordination

Members experience one seamless system

High-quality care

Incentives reward good outcomes

Aurrera Health: Supporting State Medicare-Medicaid Integration Programs Since 2011. In this next phase of Medicare–Medicaid integration, states and plans need more than one-time implementation support. They need durable infrastructure and the capacity to refine that infrastructure over time.

For over15 years, Aurrera Health has partnered with California to develop and evolve its Medicare-Medicaid integration approach, including enrollment, quality, and reporting requirements. Beyond California, we are supporting Illinois in aligning state and federal policy for fully integrated dual eligible special needs plans (FIDE SNPs) and supporting area agencies on aging (AAAs) in Ohio as they contract with the state’s new FIDE SNPs.

Our work spans the full integration lifecycle, described below.

Strategy & Readiness

We support state agencies, AAAs, and other partners in assessing their readiness for integration transitions. This includes clarifying cross-agency responsibilities, identifying operational risks, aligning leadership around integration goals, and developing actionable roadmaps for implementation.

For example, we have facilitated structured planning processes, conducted provider readiness assessments, and helped partners anticipate challenges before they surface in operations.

Policy Architecture & Operational Design

In a post-demonstration era, durable integration depends on strong contract design and clear accountability structures. As federal rules and state priorities change, these contracts and policy documents must evolve as well. We work with states to design and refine the core mechanics of integration, including:

Drafting and revising State Medicaid Agency Contracts (SMACs)
Producing policy guides and supplemental implementation materials
Designing enrollment policies and processes
Designing integrated appeals and grievances frameworks
Establishing care coordination standards and reporting requirements

Implementation & Change Management

Integration transitions often require significant change for health plans, providers, and aging network partners. Without structured engagement and practical guidance, implementation friction can undermine policy intent.

We support states and partners as integration models launch and evolve. This includes working with states to develop guidance for managed care plans, developing provider-facing materials, facilitating stakeholder workgroups, and creating structured forums to surface operational issues early. We help states realize their goals by supporting operational implementation with key stakeholders; building shared understanding across sectors and ensuring that implementation challenges are addressed collaboratively rather than reactively.

Oversight, Performance & Iteration

Integration models must adapt as enrollment patterns shift, federal requirements evolve, and states reassess fiscal and quality priorities. This requires sustained attention to performance, accountability, and model evolution.

We support states in:

Refining SMAC provisions over time
Strengthening oversight and monitoring processes
Aligning quality and reporting metrics
Assessing how integration interacts with broader strategies around long-term services and supports and behavioral health

Last fall, we presented an overview our team’s work at an event hosted by the Arnold Ventures-funded Advancing Medicare & Medicaid Integration initiative. The presentation describes our expertise, experience, and approach to supporting states in navigating Medicare-Medicaid integration. A recorded version of the presentation is available below:

The Work Ahead

In a post-demonstration world, the challenge is no longer launching integration — it is sustaining and strengthening it.

We welcome the opportunity to connect with states, plans, and providers operating or participating in integrated models to share lessons from our experience. Please reach out to Lauren Block or Kristal Vardaman to begin a conversation.

Authors

Kristal Vardaman [Managing Principal]

Maintaining Momentum for the Next Phase of Medicare–Medicaid Integration