Improving the Care of “Dual Eligibles”— What’s Ahead: Page 2 of 3

September 15, 2011

Special Needs Plans

Special needs plans (SNPs) are another type of program working to improve care for dual eligibles. SNPs are Medicare Advantage plans limited to enrolling three types of beneficiaries: dual-eligible individuals; residents of nursing facilities; and people with chronic conditions. Dual-eligible plans easily account for the majority of SNPs (approximately 62.5% of the SNP plan types).13 

The Medicare Improvements for Patients and Providers Act of 2008 required SNPs to contract with individual states to provide Medicaid benefits, and it extended the SNP program through 2011. Section 3205 of the ACA allows SNPs to continue operating through fiscal year 2013, but restricts enrollment to individuals who have the specific special need the SNP is authorized to cover. Beneficiaries enrolled in an SNP who do not meet its qualifying criteria must be disenrolled by 2012. After 2013, additional legislation will be required for the SNPs to continue operating.14

SNPs that provide coverage for dual-eligible individuals are now required to be fully integrated and to secure contracts with Medicaid agencies for the states in which they operate. A fully integrated dual-eligible SNP is one that gives enrollees access to the full range of Medicare and Medicaid benefits—including LTC services—under the umbrella of a single managed care organization. The SNP must use aligned care management to coordinate delivery of benefits and has to offer specialty care networks for dual eligibles who are considered high risk. Beginning in 2012, fully integrated SNPs designed for dual-eligible individuals may be candidates for adjusted payments based on the overall frailty of their patient population.


Program for All-Inclusive Care for the Elderly

In 1997, long before SNPs and the Money Follows the Person (MFP) Rebalancing Demonstration Program (see next section) were established to coordinate care for dual eligibles, Congress authorized the Program for All-Inclusive Care for the Elderly (PACE) to integrate care for the frail elderly.15 PACE is offered as a Medicare benefit and, in some states, as a Medicaid benefit for nursing home–certified dual eligibles who are ≥55 years of age and live in a PACE service area. Although PACE enrollees are nursing home–certified, many beneficiaries are not nursing home residents.

Enrollees attend an adult day healthcare center, where they receive medical attention and support services from an interdisciplinary team consisting of healthcare providers and other professionals. For those individuals who require nursing home care, PACE continues to pay for and coordinate their care while they reside at the LTC facility. Because of the political desire to maintain PACE, the ACA held PACE programs harmless against the cuts being applied to Medicare Advantage plans.


Money Follows the Person Rebalancing Demonstration Program

Section 6071 of the Deficit Reduction Act (DRA) of 2005 designated $1.75 billion to establish the MFP Rebalancing Demonstration Program. The program is designed to help states reform their LTC systems and promote HCBS over institutionalization for Medicaid enrollees, assisting them with transitioning from LTC facilities back to the community, when feasible.16

CMS said the MFP Demonstration Program emerged from a growing consensus that states’ LTC services were weighted too heavily toward institutions and driven largely by provider needs and should instead give greater consideration to the consumer’s needs and emphasize community-based LTC services. The initial federal grant funded the program through 2011, stipulating the following goals16:

• Increase the use of HCBS, while reducing the use of institutionally based services.

• Eliminate barriers from state laws, Medicaid plans, and budgets that prevent Medicaid beneficiaries from receiving their choice of LTC.

• Bolster HCBS to allow institutionalized Medicaid beneficiaries to transition to the community setting if desired.

• Implement procedures to assure and enhance the quality of HCBS.

CMS reported that 13 additional states joined the MFP Demonstration Program in February 2011, bringing the number of states participating in the program to 43; the District of Columbia also receives an MFP Demonstration grant. Since its inception, the MFP Demonstration Program has helped states eliminate many of the obstacles that have hindered the transition of Medicaid beneficiaries from institutions to the community setting. From 2008—when the first transitions occurred—through 2010, nearly 12,000 former LTC residents rejoined their communities, with the number of individuals able to do so increasing each year.16

In recognition of the program’s success, Section 2403 of the ACA provides an additional $2.25 billion to allow more states to participate and to help those with existing programs to strengthen them. The law makes the following amendments to Section 6071 of the DRA16:

• It extends the MFP Demonstration Program through September 30, 2016, appropriating $450 million annually for fiscal years 2012 to 2016; any funds remaining at the end of each year will be rolled over to the following year and awarded to new and current participants until 2016.

• States will receive grant monies during the fiscal year in which the grant was awarded and for the subsequent 4 years, which means that a state awarded a grant in 2016 may continue to use remaining funds from the grant through fiscal year 2020.

• The legislation expands eligibility to individuals who have resided at an LTC facility for >90 consecutive days, excluding any Medicare-covered days spent at the institution solely to receive short-term rehabilitation services.

Beyond SNPs and the MFP Rebalancing Demonstration Program, several states have developed innovative programs of their own to provide care for dual eligibles, with an emphasis on LTC services:

• Arizona Long Term Care System

• STAR+PLUS (Texas)

• Minnesota Senior Health Options (MSHO)

• Partnership Program (Wisconsin)

• Massachusetts Senior Care Options

• Coordination of Long-Term Services (New Mexico)

• Medicaid Advantage Plus (New York)

• Washington Medicaid Integration Partnership

States’ coordinated care programs achieve care coordination using multidisciplinary teams that generally include nurses, social workers, and nurse practitioners. The Wisconsin Partnership Program, for example, arranges to have nurse practitioners attend physician visits with patients to strengthen the link between the community and medical care providers.17 Mandates from the Federal Coordinated Health Care Office and the CMS Innovation Center are likely to result in significant innovations to these coordinated care programs, which will enhance the services they offer for dual eligibles. Recent policy briefs by the Kaiser Commission on Medicaid and the Uninsured and by Mathematica provide excellent reviews of innovative proposed models for states to integrate delivery of services and payment provided by Medicare and Medicaid to dual eligibles.18,19