This week, our In Focus section reviews Medicare-Medicaid integration opportunities through Dual Eligible Special Needs Plans (D-SNPs). States are motivated to expand their capacity to address the needs of dually eligible beneficiaries through integrated care. They are increasingly requiring health plans that operate Medicaid managed long-term services and supports (MLTSS) programs to become Medicare Advantage (MA) D-SNPs. A few states require D-SNPs to be Medicaid MLTSS health plans.
In states where this is happening, health plans must operate both Medicaid MLTSS and D-SNP plans to continue serving dually eligible beneficiaries.
Health plans operating both Medicaid MLTSS and D-SNP plans, or “companion plans,” will need to gain and demonstrate expertise in understanding the unique and diverse medical, behavioral health, LTSS, and social determinants of health needs of these beneficiaries, providing services that meet those needs and complying with the administrative requirements of both programs.
In this article written by Principals Sarah Barth and Ellen Breslin, we share: 1) the current regulatory landscape that strengthens Medicare-Medicaid integration opportunities through D-SNPs, 2) counts of the dually eligible population in the 10 states that require plans to operate companion plans, and 3) plan considerations for obtaining the expertise needed to serve dually eligible beneficiaries in companion MLTSS and D-SNP plans.
Current Regulatory Landscape for D-SNPs
The 2018 permanent authorization of D-SNPs, followed by the regulatory guidance for default enrollment issued by the Centers for Medicare and Medicaid Services (CMS), supports state’s efforts to align Medicare and Medicaid through D-SNPs.
Permanent authorization. The February 2018 Bi-Partisan Budget Act (BBA), which gave permanent authorization of Medicare Advantage Special Needs Plans including D-SNPs, represents the most significant regulatory change supporting the integration of Medicare and Medicaid services through D-SNPs.
Prior to permanent authorization, D-SNPs were subject to annual reauthorization. States may now consider the use of D-SNPs as a permanent pathway to integrate Medicare and Medicaid services for their dually eligible beneficiaries. The BBA additionally gave the CMS Medicare and Medicaid Coordination Office (MMCO) authority to develop rules and guidance related to the integration or alignment of Medicare and Medicaid policy and oversight for D-SNPs and provide resources to states interested in using D-SNPs as a model for integration.
Regulatory guidance – default enrollment. On August 31, 2018, CMS issued guidance for default enrollment, or automatic enrollment, of dually eligible beneficiaries who are enrolled in a Medicaid managed care plan and are newly eligible for Medicare, into an integrated D-SNP offered by the same organization. D-SNPs may now submit new default enrollment proposals to CMS October 1, 2018, with effective dates of January 1, 2019, and later.
The process was formerly referred to as “seamless conversion.” CMS provided only two states, Arizona and Tennessee, the authority to seamlessly convert members before it placed a moratorium on giving additional states permission to use the process. The CMS guidance signals support for automatic enrollment in companion plans. States with MLTSS health plan requirements to operate D-SNPs, becoming companion plans, will likely want or require these plans to apply for default enrollment, providing those plans an opportunity to see their D-SNP market share increase.
1.7 Million Dually Eligible Beneficiaries in States Requiring Health Plans to Operate as Companion Plans
Ten states – Arizona, Hawaii, Massachusetts, New Mexico, Minnesota, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin – require Medicaid MLTSS health plans to become D-SNPs in order to operate as Medicaid MLTSS health plans. The dually eligible beneficiaries in these states account for nearly 25 percent of all dually eligible beneficiaries in the country. Similarly, dually eligible beneficiaries who receive full Medicaid benefits or “full duals” account for 23 percent of all full-benefit dually eligible beneficiaries. Three of these 10 states – Massachusetts, Pennsylvania, and Texas – represent close to 60 percent of the total dually eligible beneficiary count in the 10 states. Table 1 below lists the 10 states and the composition of their dually eligible beneficiary populations, including the three states with the largest share of the total.
Health Plan Considerations
The dually eligible beneficiary population is diverse in age, gender, race, ethnicity, language, chronic conditions, and disabilities, which include cognitive, behavioral and physical disabilities. Close to 60 percent were 65 years of age and older. About 40 percent were male, and 61 percent were female. Dually eligible beneficiaries are among the poorest of Medicare beneficiaries, and they face many adverse social determinants of health (SDOH), (e.g., housing, transportation, food security, employment, health literacy).
It will be crucial that health plans operating companion plans have provider networks and care coordination and management systems tailored to the unique medical, behavioral health, LTSS, and SDOH needs of those they serve.
Health plans can work with states and stakeholders including dually eligible beneficiaries, their family/caregivers, providers, and community-based organizations to advance policies, processes, and communication strategies to support dually eligible beneficiary enrollment in companion plans. Serving these individuals requires successfully locating and engaging them in health plan services and supports to meet their needs. Provider network capacity will be crucial, including establishing relationships with providers and community-based organizations in the communities in which dually eligible beneficiaries live. Staff will need to be expert in both Medicare and Medicaid program requirements and be ready to engage in value-based payment approaches to improve cost and quality outcomes. Health plans have an important opportunity now to build the right infrastructure.
 E.g. New Jersey requires D-SNPs to also have a Medicaid managed care contract with the state.
 Beneficiaries Dually Eligible for Medicare and Medicaid, Data Book, jointly produced by Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC), January 2018.