November 13, 2008	2008-R-0606
Special Needs Plans (SNP) for Dually Eligible—Update
By: Robin K. Cohen, Principal Analyst

You asked for an update of a 2007 OLR report, (2007-R-0460), which described Massachusetts’ developing SNP program, as well as provided a general description of SNPs and the federal law authorizing them. This report summarizes the current SNP landscape, with a focus on dually-eligible plans; recent federal actions; Connecticut’s experience thus far; and expert views on what is necessary for SNPs to be a viable care model.

SUMMARY

A 2003 federal law authorizes states to create SNPs for their frail elderly and younger disabled residents using the Medicaid managed care model begun under Medicare Advantage, and to limit enrollment in these plans to certain categories of people, including those eligible for both Medicare and Medicaid (dually-eligible). In August 2007, OLR reported that in 2006 the federal Centers for Medicare and Medicaid Services (CMS) had approved 226 SNP dually-eligible contracts. The latest information from CMS indicates that the number has risen to 270 with a total of 901,887 enrollees as of October 2008.

While Congress authorized the creation of SNPs in 2003, it has passed subsequent laws to tighten the requirements for them, in part because states saw a proliferation of SNPs without enough specificity as to how they should be designed and operate. Likewise, CMS has issued regulations that build on the federal law. One of the more significant regulatory provisions requires dually-eligible SNPs to have contracts with Medicaid agencies starting in 2010.  A quasi-public commission that advises Congress on the Medicare program has issued recommendations for SNPs, some of which have been enacted. And CMS has proposed new rules for measuring SNP quality.    

In 2007 the legislature authorized the Department of Social Services (DSS) to contract with dually-eligible SNPs and allocated Medicaid funds to do so. To date, no contracts have been executed but DSS does some coordination with the three dually-eligible SNPs in the state.

At least two state health care experts assert that there is no solid evidence that SNPs add value to the Medicare Advantage (MA) system of managed care for Medicare beneficiaries, a concern also voiced by other experts. In addition, advocates and others have raised several other issues that they believe need to be addressed to ensure SNP viability. These include ensuring quality measures that are unique to the SNP care model and beneficiary protections

STATE DUALLY-ELIGIBLE SNP ENROLLMENTS

Table 1 lists the states in which health plans have established contracts with CMS to run SNPs for dually-eligible beneficiaries as of October 2008.

Although the table indicates that CMS has authorized four SNP plans (three contracts) in Connecticut, the state is not paying the SNPs a capitated Medicaid rate, which is how the fully integrated plans work. Rather, DSS pays the Medicare cost sharing (e.g., premiums) and for any services that the SNP does not cover (i.e., non-Medicare), such as personal care services. It is not clear from our source (CMS) which states have fully integrated SNPs like Massachusetts versus models that resemble the Connecticut arrangement. Finally, we note that the grand total number of enrollees is actually 101 greater. This reflects the fact that, for privacy reasons, CMS only reports when a plan has 11 or more enrollees.

Several contracts cover enrollees in more than one state. We indicate this in the table and only count these enrollees once.

Table 1:  SNP Dual-Eligible Plans and Enrollees as of 10/1/08

State	Number of SNP Plans under CMS Contracts	Plan Types (Preferred Provider Organization (PPO), HMO, or Provider-Sponsored Organization (PSO))	Enrollment (as of 10/08) [1]
Alabama	5 [2]	PPO, HMO	25,338
Arizona	15	HMO, PPO	55,879
Arkansas	3	HMO	2,586
California	39	HMO	110,179
Colorado	4	HMO	5,854
Connecticut	4	PPO, HMO	4,666
Delaware	3	PPO, PSO, HMO	371
Florida	68	HMO, PPO	71,843
Georgia	7	PPO, HMO	5,951
Hawaii	3	PPO, HMO	11,094
Idaho	2	PPO. HMO	1,427
Illinois	7	HMO, PPO	6,630
Indiana	5	PPO, HMO	1,649
Iowa [3]	3	HMO, PPO	536
Kansas	2	PPO	141
Louisiana	7	HMO	4,811
Maine	2	PPO, HMO	1,353
Maryland [4]	5	HMO, PPO	5,668
Massachusetts	7	HMO, PPO	13,611
Michigan	4	HMO	2,231
Minnesota	18	HMO	37,632
Mississippi [5]	6	HMO	9,132
Missouri [6]	4	HMO	2,741
Nevada	1	HMO	623
New Jersey	10	HMO	4,511
New Mexico	4	HMO, PPO	860
New York	50	HMO, PSO, PPO	71,805
North Carolina	2	HMO	9,697
Ohio	9	HMO	6,494
Oklahoma	3	HMO	761
Oregon	9	HMO, PPO	17,201
Pennsylvania	14	PPO, HMO	101,035
Rhode Island	2	HMO	3,834
South Carolina [7]	2	HMO	1,555
Tennessee	6	HMO	20,908
Texas [8]	28	HMO	52,895
Utah	3	HMO	2,965
Virginia	4	HMO	721
Washington	2	HMO	977
West Virginia	1	PPO	62
Wisconsin	16	HMO, PPO	7,001

Source: Centers for Medicare and Medicaid Services (2008)

[1]The number of enrollees is actually 101 greater than reported here. This reflects the fact that, for privacy reasons, CMS only reports plans with 11 or more enrollees.

[2] One of the Alabama (3,284 total enrollees) plans also covers part of Tennessee.

[3] One of Iowa plans (237 enrollees) also covers Omaha, Nebraska

[4] Maryland, District of Columbia, and Virginia enrollments could include enrollees from one of the other two states.

[5] One of Mississippi’s plans (5,157 total enrollees) covers part of Tennessee.

[6] One of Missouri plans (1,512 total enrollees) also covers “IL area.”

[7] One of South Carolina’s contracts (869 enrollees) also covers part of Tennessee

[8] One of Texas’ contracts (2,517 enrollees) also covers part of New Mexico—add something that indicates that we do not count plans more than once

Enrollment Detail

A Mathematica Policy Research, Inc. report  to a Medicare Leadership Summit in May 2008 suggests that individual SNPs are not enrolling large numbers of people, but enrollment overall has jumped over 100% in just two years. (About half of the increase is attributable to passive enrollment (in which people do not actively elect to enroll) of dually-eligible individuals who were already enrolled in Medicaid managed care. The report found that 14% of the dually-eligible SNPs had fewer than 11 enrollees, and 57% had fewer than 500. Most of the enrollees were concentrated in 10 states and Puerto Rico, which alone had nearly a quarter of all enrollees in April 2008 (“Special Needs Plans: Assessing the Value and Proper Role of SNPs,” Mathematica Policy Research , Inc, May 16, 2008).

RECENT FEDERAL ACTIONS

Several federal actions in the last year address SNPs. Last December, Congress imposed a moratorium on new SNPs from January 1, 2008 through December 31, 2009. Existing SNPs were allowed to continue enrolling members for another year (PL 110-173, §108, December 29, 2007).

MedPAC

In March 2008, MedPAC (the Medicare Payment Advisory Commission, a group that advises Congress on Medicare payment issues) issued recommendations regarding MA in general and SNPs specifically. One recommendation was that further study was needed to determine whether SNPs provide value to the MA program.

The commission suggested that the rule that allows dually-eligible enrollees to change plans every month has led to marketing abuses. It recommended that the rules be changed to allow enrollment only during the annual open enrollment period and during defined special election periods.

The commission also looked at quality measurement and concluded that the quality measures that SNPs must collect and report are not designed to ensure that SNPs are providing the specialized care for their target populations. It recommended that the CMS secretary establish additional, tailored performance measures for SNPs and evaluate their performance on those measures within three years.

The commission concluded that there is a lack of clear information available to Medicare beneficiaries to enable them to make an educated decision about enrolling in a SNP. The commission recommended that the CMS secretary furnish both beneficiaries and their counselors with SNP information that compares benefits, other features, and performance with other MA plans and traditional Medicare.

Another commission recommendation was for Congress to require dually-eligible SNPS within three years to contract, either directly or indirectly, with states in their service areas to coordinate Medicaid benefits. This was based on the commission’s conclusion that there is no requirement that SNPs coordinate with the two programs, and that there would be no way to know whether SNPs were also providing Medicaid-covered services.

New Regulations

CMS released interim final SNP regulations in May 2008. These address the concerns raised about SNPs enrolling Medicare beneficiaries who do not fall into one of the three SNP categories (chronic or disabling condition, dually-eligible, institutional) into their plans, thus potentially diluting the plan’s focus on the needs of enrollees with special needs. The regulations limit SNPs’ new enrollments of these “non-special needs” beneficiaries at 10%. They require dually-eligible SNPs to have a documented relationship with their state’s Medicaid agency, which could assist with eligibility verification. The relationship can be a contract, memorandum of understanding, or some other agreed-upon arrangement. They also make it clear that dually-eligible SNP enrollees are not liable for any Medicare Part A or B cost sharing (Federal Register, Vol. 73., No. 96, May 16, 2008).

Medicare Improvements for Patients and Providers Act (MIPPA)

Last July, Congress again addressed SNPs. With respect to dually-eligible SNPs, the new law (MIPPA) requires SNPs, after January 1, 2010, to provide each prospective enrollee with a comprehensive written statement that describes the benefits and cost sharing protections to which the individual is entitled under Medicaid and which the plan covers.  It also requires these SNPs, starting in 2010, to have a contract with the state Medicaid agency to provide benefits, or arrange for them, including long-term care services.

The act also requires all SNPs, by January 1, 2010, to have in place an evidence-based care model to implement care management requirements that must include

1. both an evidence-based model of care with an appropriate provider network to meet enrollees’ specialized needs and

2. a “battery” of care management services, which must include a comprehensive initial assessment and annual reassessments of each enrollee’s physical, psychosocial, and functional needs; an individual care plan; and an interdisciplinary team to manage the enrollee’s care (PL 110-275, §164, et. seq.).

MIPPA also addressed the marketing of MA plans in general, and required SNPs to analyze and report data on quality improvement.

September Interim Final Regulations

CMS issued additional SNP regulations in September 2008. These address MIPPA’s requirements (1) for care management and care models; (2) that beginning on January 1, 2010, MA organizations offering new dually-eligible SNPs must have contracts with the state Medicaid agencies, including what the contracts must contain; and (3) concerning cost sharing. Finally, the regulations spell out how SNPs will be expected to ensure that they have MIPPA’s quality improvement measures in place, including collecting, analyzing, and reporting data that measure the performance of their plan-specific care model in a number of areas, including access to care and improvements in beneficiary health status. (Federal Register, Vol. 73, No. 183, September 18, 2008).  

Quality Measures

Recently, CMS, with the National Committee for Quality Assurance, released proposed new quality measures, in additional to those SNPs collected and reported earlier this year. Among other areas, these focus on care transitions and the integration of Medicare and Medicaid.

ISSUES

Marketing Problems

The proliferation of SNPs has some advocates worried about marketing practices as the health plans compete to enroll people. Indeed, last summer, United Health Care subsidiary, Evercare (one of the biggest health plans providing SNPs nationally), fired seven of its Boston area agents certified to sell SNPs after many complaints of marketing abuse. Some of the agents were accused of lying about what the plans cover, called seniors after they were asked to stop, and may have gone door-to-door, in violation of marketing guidelines.

DSS’ Medicaid Director David Parrella reports that complaints have been lodged in Connecticut, too. At a Center for Medicare Advocacy (CMA)-sponsored SNP conference in October 2007, Parrella pointed to the difficulties of marketing SNPs to individuals in home- and community-based waiver programs (e.g., Connecticut Home Care Program for Elders) and how a waiver enrollee might not know when signing up about a SNP’s closed provider network when signing up. Such an individual would be distressed to learn that his or her long-term provider might not be able to provide services once he or she signs up with the SNP. Parrella stated that this phenomenon had occurred “with some frequency.” 

Cost Shifting

Parrella also expressed concern, which has been voiced by others, as to whether dually-eligible SNPs distribute costs so that both programs pay what they should or whether more costs would end up being shifted to the state. Medicaid is the payor of last resort, so in theory the SNP should provide as much as it can using its Medicare capitation payment, with Medicaid providing the wrap-around coverage.

Adding Value

Because SNPs are an add-on to MA plans, some have argued that their success depends on their ability to add value to a state’s delivery of managed care to frail seniors or those who qualify for both Medicare and Medicaid. Both Parrella and CMA executive director Judith Stein assert that SNPs have not yet shown that they add value.

Indeed, the CMA conferees discussed the added value of either exclusive or disproportionate enrollments of people with special needs inherent in SNPs when, in theory, MA plans could provide the same types of services, including care coordination. Some SNP defenders said that the SNPs could focus on their enrollees’ special needs rather than viewing them as “financial outliers” in a MA plan. They also made the point that SNPs can design their models based on medical literature concerning treatment of their population. Finally, the group considered the degree of scale a SNP would need to achieve to reach its goals, suggesting that some SNPs might not have enough enrollees to create a program design that adds value.

One conferee noted that he had heard from SNPs that they tend to add easily marketable services like vision, dental, and hearing. But CMA responded that this would not apply to dually- eligible beneficiaries in Connecticut since Medicaid already provides those services. 

CONNECTICUT’S EXPERIENCE AND OUTLOOK

In FY 08, the legislature authorized (through the budget) DSS to contract with SNPs to provide wraparound Medicaid coverage for the dually-eligible population. At this juncture, DSS has not contracted with any plan and is not paying a capitated Medicaid rate as is done in some other states, including Massachusetts. But according to Parrella, the department helps coordinate benefits. For example, if Medicaid pays cost sharing on behalf of dually-eligible beneficiaries, DSS pays it. Likewise, if a SNP enrollee needs services that the SNP does not cover, and Medicaid would normally provide them, DSS pays for them.  

In addition to the marketing problems mentioned above, Vicki Gottlich of CMA reports that her organization continually hears of dually-eligible SNPs not informing enrollees about their Medicaid benefits, failing to provide Medicaid benefits to which they are entitled, and inappropriate cost sharing charges.

Given the new federal requirements that SNPs contract with state Medicaid agencies, it will be interesting to see what happens in Connecticut as plans approach DSS. (The federal regulations do not require state Medicaid agencies to contract with the SNPs.) Given the state’s experience with the HUSKY program and managed care organizations, there could potentially be some resistance to pushing sicker and potentially more vulnerable seniors into these managed care arrangements.

ADDITIONAL INFORMATION

How the Experts Envision SNP as a Viable Health Care Delivery Model for Dually Eligible Beneficiaries

CMA issued a set of recommendations in five areas based on the above-referenced conference proceedings:

1. beneficiary protections and care and coverage standards,      

2. care coordination,

3. benefit coordination,

4. enforcement, and

5. research and data.

The recommendations are essentially a set of principles to which the group believes SNPs must adhere to become and remain a viable option to the traditional, often-fragmented Medicare fee-for-service system.

The recommendations can be found by going to www.medicareadvocacy.org/SNP%20Conference/Recommendations.htm

For CMA’s comments on the September 2008 regulations, see www.medicareadvocacy.org

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