Dual Eligible Special Needs Plans: Considerations for Reauthorization

Dual Eligible Special Needs Plans (D-SNPs) are a type of Medicare Advantage (MA) plan that enrolls only individuals dually eligible for Medicare and Medicaid. Though results have been mixed, D-SNPs were created as a possible route to better integration between Medicare and Medicaid, in turn leading to better quality, higher value care.

Authority for Special Needs Plans will expire on January 1, 2015 unless Congress takes action.[1] If SNP authority expires, D-SNPs will be required to function as any other MA plan or cease operation.[2]  The Medicare Payment Advisory Commission (MedPAC) has recommended that authority lapse for 80% of current D-SNPs. In light of MedPAC’s recommendations, Congress should use SNP reauthorization as an opportunity to improve D-SNP performance and better hold MA plans accountable for quality and cost.

Background

Special Needs Plans (SNPs), including those for dually eligible beneficiaries, were created by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003, which authorized them through 2008.[3] Subsequent legislation extended the expiration date of SNP authority on four separate occasions, and through this legislative process Congress imposed a number of additional requirements on SNPs.[4] Most notably, the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 required all new or expanding D–SNPs to have contracts with state Medicaid agencies regarding coordination and provision of Medicaid benefits.[5] This requirement was extended to existing D-SNPs by the Affordable Care Act effective 2013.[6]

The Affordable Care Act also created a subset of D-SNPs called Fully Integrated Dual Eligible Special Needs Plans or FIDE SNPs[7].  FIDE SNPs have contracts to cover all or most of a state’s Medicaid benefits, including long-term care and the coordination of the delivery of Medicare and Medicaid services.[8]  FIDE SNPs are likewise required to coordinate or integrate Medicare and Medicaid processes for enrollment, member materials, communications, grievance and appeals, and quality improvement.[9]  Special Needs Plans can apply to CMS to become FIDE-SNPs, and upon approval, are eligible to receive a frailty payment adjustment– an additional per-enrollee capitated payment.[10]

According to MedPAC data from June 2012, Medicare spending on D-SNPs and FIDE SNPs exceeded fee-for-service spending, even when adjusted for the more intensive and expensive care needs of dually eligible enrollees.[11] D-SNP bids for Medicare Part A and B services were higher than fee-for-service costs.[12]  On the basis of 2012 data, MedPAC expected spending on D-SNPs and FIDE SNPs to average 12 percent and 10 percent higher than fee-for-service, respectively.[13]

As of October 2013, there were roughly 1.5 million D-SNP enrollees.[14] These enrollees represent 15% of the total dually eligible population.  In March 2013 there were roughly 93,000 FIDE SNP enrollees.[15]

MedPAC Recommendations on D-SNP Reauthorization

In March, 2013 MedPAC recommended that Congress reauthorize only 19% of current D-SNP contracts, which would require 81% of D-SNPs to convert to regular Medicare Advantage plans or cease operation.[16] MedPAC found that overall, D-SNPs have average to below average performance on quality measures when compared with other SNPs and regular Medicare Advantage plans.[17] Furthermore, MedPAC found requirements that D-SNPs enter into contracts with state Medicaid agencies had not resulted in desired clinical and financial integration between Medicare and Medicaid.[18]

MedPAC recommended that only those D-SNPs with the highest degree of integration be reauthorized.  These highly integrated plans were found to perform well on quality measures, in contrast to less integrated D-SNPs. MedPAC defined plans with a high degree of integration as those that do more than arrange for or coordinate the provision of Medicaid benefits. Rather, highly integrated plans take clinical and financial responsibility for all Medicare benefits, as well as all or some Medicaid long-term services and supports (LTSS), behavioral health, or both. The desired integration is achieved either through a contract with the state that specifies that a D-SNP will provide LTSS or behavior health services, or when an individual is enrolled in a D-SNP and a Medicaid managed care plan offered by the same entity. The Commission did not explicitly specify whether all FIDE-SNPs  were by definition considered to be highly integrated.[19]

Considerations for D-SNP Reauthorization

Advocates have raised concerns regarding the value of D-SNPs for several years.[20]  MedPAC's recommendation that only a few high quality, integrated plans be reauthorized comports with prior advocate recommendations regarding SNP reauthorization.[21]  

In certain areas, D-SNPs may provide a vehicle for more coordinated, quality care and should not be totally abandoned as a potential source of improvement. However, through continued reauthorization of D-SNPs, Congress should seek to hold plans accountable for true clinical and financial integration as recommended by MedPAC, while taking the utmost care to preserve and enhance important consumer protections.  Recommendations for improving D-SNPs include:

1. Integration of Medicaid LTSS and Behavioral Health Services

In its report, MedPAC found that highly integrated D-SNPs provide some or all Medicaid LTSS and behavioral health services.  According to MedPAC’s recommendations, those D-SNPs not assuming at least some  responsibility for Medicaid LTSS or behavioral health services would expire and could work with states now or in the future to become more fully integrated and seek authorization as a D-SNP under the new more rigorous authorizing standard. While a requirement that D-SNPs provide some or all LTSS may promote integration, many managed care plans (even those serving Medicaid-only populations) have little to no experience providing the full suite of community-based LTSS services. [22]

Any move toward integration of Medicaid LTSS into a managed care model must do so in a way that best supports independence and the ability of beneficiaries to remain in, or return to, community settings. Significant oversight by CMS and state Medicaid agencies, in conjunction with stakeholder input, will be required to ensure that appropriate safeguards are in place. Importantly, managed care plans must demonstrate sufficient plan infrastructure, comprehensive home and community based services benefit packages, and robust provider networks prior to being allowed to enroll dually eligible individuals.[23]

2. Integrated Notices, Enrollment and Member Services

An integrated and streamlined enrollment, notice, and member services process could help reduce confusion and promote a more seamless experience for enrollees. An integrated system involves a single enrollment mechanism, a single identification card and member handbook. Integrated notices and member materials should be written in plain language, be limited English proficiency accessible, and accessible to people with disabilities. A streamlined enrollment and member services process is a key component of the demonstrations to integrate care for dually eligible beneficiaries, and has been pioneered by states like Minnesota for several years.[24]

However, integrated enrollment should not be pursued at the expense of beneficiary choice. In their recommendations on D-SNP reauthorization, the National Association of Medicaid Directors suggested Congress expand authority for states to conduct passive enrollment, and to implement mandatory enrollment and lock-in policies for D-SNPs.[25]   Past passive enrollment schemes have resulted in coverage changes without the knowledge of beneficiaries, sometimes with enrollees ending up in a plan that did not cover their long-standing providers, treatments, and medications.[26]  The threat of disruption is made more significant if passive enrollment is allowed with lock-in. Passive enrollment, mandatory enrollment and lock-in allows plans guaranteed enrollment without demonstrating that the product is worth having and infringes on a beneficiary’s free choice of provider, a foundational element of the Medicare program since its beginning.[27]

3. Integrated Appeals and Grievances

The right of a person to appeal decisions about his or her health care is a critical consumer protection, and can be strengthened through an integrated D-SNP appeals process that retains the elements from both Medicare and Medicaid that provide the greatest protection to dual eligible beneficiaries.[28] In its 2012 report to Congress, the Medicare-Medicaid Coordination Office sought Congressional authority to integrate the Medicare and Medicaid appeals processes.[29]  The President’s 2014 budget reflected this request and proposed to implement a streamlined, single beneficiary appeals process for managed care plans that integrate Medicare and Medicaid. [30]

Medicare and Medicaid have distinct rules and protections related to notice, levels of appeal, review entities, timelines for filing appeals and making decisions and more. In resolving conflicts between the two programs, it is important that any integrated D-SNPs appeals process retain crucial consumer protections from each. These protections include but are not limited to:

• Unified notices of both Medicare and Medicaid appeals, with notice timing and content following Medicaid guidelines;
• Unified time frames for internal and external appeals following Medicaid guidelines;  
• No more than five levels of appeal with the option to pursue an external hearing instead of or in addition to plan level review;
• Continuation of Medicare and Medicaid benefits pending a decision by the first level decision maker;
• Training for hearing officers to ensure that they are prepared to adjudicate both Medicare and Medicaid claims applying the appropriate standards of review.

An integrated, easily navigable appeals process that combines appeals for both Medicare, including Medicare Part D, and Medicaid services could alleviate confusion, inefficiencies and administrative burden for beneficiaries as well as state and federal government. However, any attempt to integrate appeals must be done with care and caution.[31]  

4. Easier identification of FIDE-SNPs

The Center recommends that Congress make information on the identity of D-SNPs, and in particular FIDE SNPs, more transparent to beneficiaries and their advocates. Often times individuals enrolled in FIDE SNPs are not aware that their plan is, or should be, fully integrated. This makes it difficult for beneficiaries and their advocates to hold FIDE-SNP plans accountable.

Conclusion

SNP reauthorization offers Congress the opportunity to improve MA plan accountability and quality, and to improve care for some of the nation’s most vulnerable Medicare beneficiaries. Through the reauthorization process, Congress should seek to make D-SNPs more fully integrated, but not at the expense of important consumer protections.

We want your stories!!!  Please contact Andrea Callow (acallow@medicareadvocacy.org) with your personal experiences with Dual Eligible Special Needs Plans.