Question

what are some of the principles of managed care practice that make expand partnerships between Medicare Advantage D-SNPs and Medicaid MLTC plans is good?

Answer 1

Special Needs Plans (SNPs) are a new type of Medicare Advantage (MA) plan with the potential to coordinate Medicare and Medicaid benefits and services for dually eligible beneficiaries. However, experience to date suggests that SNPs have not greatly expanded the number of people enrolled in joint Medicare-Medicaid products. SNPs need to have some contractual relationship with state Medicaid plans to add value for dually eligible beneficiaries beyond traditional MA plans. Although SNP enrollment is higher in states with such a relationship than in other states, several steps are identified to further expand this market and improve coordination between SNPs and state Medicaid programs.

SPECIAL NEEDS PLANS

SNPs can target one of three types of beneficiaries:

(1) dually eligible enrollees,

(2) residents of nursing facilities or similar institutions, and

(3) residents with severe or disabling chronic conditions.

Dual-eligible SNPs (category 1) almost exclusively serve those eligible jointly for both Medicare and Medicaid, while approximately half of enrollees in institutional and chronic care SNPs (categories 2 and 3) are dual eligibles.  As such, this paper focuses on dual-eligible SNPs, which constitute 57 percent of plans and 72 percent of enrollees. Similar to other MA plans, SNPs receive a capitated payment to provide Medicare benefits.

OPPORTUNITIES AND CHALLENGES FOR CARE COORDINATION

FOR ENROLLEES.

The incentive for dually eligible beneficiaries to enroll in a dual-eligible SNP—as compared to a traditional MA plan—relates to whether the plan can add value for the beneficiary. Disease management and coordination of Medicare benefits are already common in traditional MA plans. Clearly, better coordination across Medicare and Medicaid could be the feature that attracts dual eligibles into SNPs and keeps them in these plans over time, but to date, it is unclear how well benefits and services are in fact being coordinated for most dual-eligible SNP enrollees. The recent MIPPA legislation mandating that all new dual-eligible SNPs have contracts with state Medicaid agencies will be a step toward ensuring greater coordination of Medicare-Medicaid benefits with dual-eligible SNPs. Whether this new mandate will translate into better coordination of care is still unclear.

FOR HEALTH PLANS.

Because SNPs are paid similarly to other MA programs, higher capitated payments do not appear to be a major rationale for establishing an SNP relative to a traditional MA plan.  For companies that were already providing MA plans, however, it has been relatively straightforward to establish new SNPs. Other possible factors explaining the decision to offer SNPs include the potential to add new markets, the opportunity to build on existing areas of expertise (for example, disease management), and the opportunity to tailor and market benefit packages for specific subpopulations.  For these plans to be profitable, they must modify care patterns so that unnecessary use of costly Medicare services is minimized. Dual-eligible SNPs also can address the care coordination challenges stemming from beneficiaries’ reliance on Medicaid for services not covered by Medicare.

FOR MEDICARE AND MEDICAID.

In theory, better coordination of Medicare-financed acute and postacute services and Medicaid-financed long-term care benefits and services should improve quality for dually eligible enrollees while lowering (or at least not raising) program costs. However, there are several potential barriers that may impede the coordination of benefits and services under dual-eligible SNPs.

NEED FOR A ROBUST MEDICAID MANAGED CARE MARKET.

Moving forward, several different policies may further encourage the viability of SNPs as a mechanism toward coordinating services. First, a robust Medicaid managed care market is essential for encouraging a fully capitated Medicare/Medicaid model. Historically, states have implemented these programs by securing CMS waivers. The easing of federal requirements, so that states can contract with SNPs for Medicaid-financed services without having to obtain a Medicaid waiver, will be an important step.

NEED FOR EVALUATION OF SNPS.

Finally, there has been little evaluation of SNPs’ performance in terms of costs and outcomes for beneficiaries. This is partly attributable to the fact that MA plans do not report claims or encounter data under Parts A or B. However, with some further data development, a series of measures might be used to evaluate dual-eligible SNPs’ performance, including Part D claims data; Medicaid claims data (where accessible); beneficiary surveys; SNP enrollment/ disenrollment rates; complaints and grievances against SNPs; and the use of savings (or rebate) dollars by dual-eligible SNPs.  Although one might posit that better care coordination should improve outcomes and lower costs, evaluations of previous initiatives that have coordinated Medicare and Medicaid benefits and services for dual eligibles in a managed care framework such as the PACE and MSHO programs have indicated higher spending. Moving forward, MIPPA will ensure that new dual-eligible SNPs contract with states in coordinating benefits and services. Thus, it will be important to track whether improved care coordination via dual-eligible SNPs translates into better beneficiary outcomes and lower spending.