Virginia is the sixth state to reach an agreement with the federal Centers for Medicare and Medicaid Services (CMS) for a pilot project coordinating care for dual eligibles, people enrolled in both Medicare and Medicaid, the agency announced Tuesday.

An estimated 78,600 elderly and disabled Virginians, living in more than 100 localities, will be enrolled in Medicare-Medicaid Plans under the program. One company will be responsible for overseeing their full continuum of care, from their primary care and medications to any hospitalizations and long-term care needs. Patients in certain areas of Virginia will be allowed to begin opting into the program starting in February 2014. The program will then be phased into other areas of the state over the following eight months.

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The plans will receive a blended payment from both programs for each patient. If the patient’s care ultimately costs less than the prospective payment, the company keeps the savings. If the care costs more, the company is responsible for the additional spending. It’s known as the capitated model, and five of the six states approved for a pilot thus far have chosen that structure. Washington state is the only one to choose the other option available to states, managed fee-for-service.

According to the proposal submitted by Virginia officials, they expect savings for Medicare on hospital and emergency rooms visits and savings for Medicaid through better outpatient services. Exact projected savings were not immediately available, although previously approved projects anticipated 1 percent savings in the first year, increasing to 4 percent by the fourth year.

The dual-eligible demonstrations were authorized by the Affordable Care Act (ACA). A total of 26 states have applied to participate in the program, and six have now been approved. They aim for greater continuity across the programs, which may cover the same patient but cover different things and occupy different administrative structures. That can make it difficult for the average person to navigate the two programs. (Governing covered the dual-eligible problem in depth in our Generations series last fall).

Federal officials place a lot of emphasis on the success of the initiative, as conversations around Washington continue to focus on long-term deficit reduction. The nation’s 9 million dual eligibles account for 15 percent of Medicaid’s enrollment, but nearly 40 percent of its spending.

“[Medicare-Medicaid enrollees are] one of those places we can improve,” Tim Englehardt, who is overseeing the dual-eligible demonstration at CMS, told Governing in April. “We genuinely believe that these programs will be better for people, and we genuinely believe we’ll get some savings over time.”