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SNP Provisions of the Bipartisan Budget Act of 2018

This week’s In Focus section reviews the recent Bipartisan Budget Act of 2018 (the Act), which adopts policies aimed at improving care for Medicare beneficiaries with chronic conditions, including individuals dually enrolled in Medicare and Medicaid (dual eligible individuals). The Act provides new authority to the Federal Coordinated Health Care Office (Medicare-Medicaid Coordination Office or MMCO), which serves dual eligible individuals, and will help accelerate its goals of providing full access to seamless, high quality health care and a system that is as cost-effective as possible.[i] The Act also includes several provisions that have an impact on Medicare Advantage (MA) Dual Eligible Special Needs Plans (D-SNPs). These provisions and their implications for D-SNPs and Medicare-Medicaid integration strategies follow.

Background: Dual eligible individuals are a complex, high-cost population

There are currently more than 11 million individuals covered by both Medicare and Medicaid.[ii] They have significant health and social service needs, multiple chronic conditions, and high costs. Nationally, in 2012, people dually eligible for these programs represented on average only 15 percent of the Medicaid population and 20 percent of the Medicare population, but accounted for 33 percent of total Medicaid spending and 34 percent of total Medicare spending.[iii] As a result, there continues to be significant state and federal interest in integrated Medicare-Medicaid managed care models which can improve quality and reduce spending by coordinating care, providing a better care experience, and aligning finances across programs.

Integrated managed care models[iv] include the capitated Financial Alignment Initiative (FAI) demonstration; Medicaid managed long-term services and supports (MLTSS) (with requirements for Medicare and Medicaid integration through required state Medicaid agency contracts (SMACs) with D-SNPs (MLTSS+D-SNP)); and D-SNP designation as a Fully Integrated Dual Eligible Special Needs Plan (FIDE SNP).

Ten states are currently engaged in capitated FAIs,[v] and there is increasing interest among states in pursuing integration through D-SNPs. Eleven states are advancing integrated MLTSS+D-SNP and/or FIDE SNP models.[vi] Some MLTSS+D-SNP integrated managed care models are established (e.g. Arizona and Minnesota) while others have been implemented more recently (e.g. Tennessee and Virginia). FIDE SNPs are active in eight states.[vii] We are observing an increasing number of state Medicaid agencies requiring their MLTSS plans or comprehensive Medicaid managed care (MMC) plans offer a D-SNP plan.


11 States Currently Require MLTSS/

MMC Contractors to Offer D-SNPs:









New Mexico


New Jersey


Bipartisan Budget Act of 2018: Key changes are expected to have an impact on D-SNPs and Medicare-Medicaid integration strategies

Permanent SNP reauthorization. The Act permanently authorizes Medicare Advantage (MA) SNPs, which include D-SNPs, Chronic Condition SNPs (C-SNPs), and Institutional SNPs (I-SNPs). Reauthorization provides stability to the SNP market and continuity of care for the beneficiaries enrolled in SNP plans. As of February 2018, there were approximately 2.1 million beneficiaries enrolled in D-SNPs, 348,000 enrolled in C-SNPs, and 73,000 enrolled in I-SNPs.[viii]

Strengthened Authority for the Medicare-Medicaid Coordination Office regarding increased integration of D-SNPs. The MMCO initially created by the Affordable Care Act (ACA) to support more integrated benefits and improve coordination for dual eligible individuals now has expanded authority to:

  • Operate as the dedicated point of contact for state Medicaid programs to address misalignments that arise with the integration of D-SNPs.
  • Establish a uniform process for disseminating to state Medicaid agencies information under the law’s title impacting contracts between Medicaid agencies and D-SNPs.
  • Provide resources for states interested in using D-SNPs as a model for integration (e.g., model contract and other tools).
  • Develop rules and guidance to unify grievances and appeals procedures for services and items provided by D-SNPs.
  • Develop rules and guidance related to the integration or alignment of Medicare and Medicaid policy and oversight for D-SNPs.

In implementing these provisions, the Act requires the MMCO to obtain stakeholder input, such as feedback from plans, beneficiaries, providers, and other organizations.

Improved integration and coordination for D-SNPs. Beginning in 2021, D-SNPs must meet new requirements for integration or be subject to an enrollment freeze. D-SNPs must meet one or more of the following three options:

  • Be a FIDE SNP or provide LTSS and/or behavioral health services under a capitated contract with the state Medicaid agency.
  • Coordinate LTSS and/or behavioral health according to a new set of contract requirements that will be established by MMCO (e.g., provide notification to the state Medicaid agency of hospitalizations and ED visits).
  • Assume clinical and financial responsibility for all Medicare and Medicaid benefits if the D-SNP is offered by the parent organization of the Medicaid plan providing LTSS and/or behavioral health services.

Unified grievances and appeals for services and items provided by D-SNPs. MMCO must establish uniform grievances and appeals procedures, to the extent feasible, for D-SNPs by April 1, 2020. They are to align procedures such as single notifications, unified timeframes, and simplified reporting. Unified procedures must be used by D-SNPs with contracts with state Medicaid agencies for 2021 and subsequent years.

Plan level Star ratings. The Act gives CMS the authority to calculate Star ratings at the plan level, instead of the contract level, for SNPs. This change has the potential to increase plan reporting burden and positively or negatively impact a plan’s Star rating.

Before exercising its new authority, CMS must consider such things as validity of measurement and impact on plans that serve a disproportionate number of dual eligible individuals. The change, if adopted, would only apply to SNPs. However, the Act also directs CMS to examine the feasibility of calculating Stars at the plan level for all MA plan types.

Expanded supplemental benefits. Starting in 2020, all MA plans, including D-SNPs, will be able to provide supplemental benefits to chronically ill enrollees that “have a reasonable expectation of improving or maintaining the health or overall function.” Similar proposals that would expand the scope of supplemental benefits so long as they “diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization,” were included in February’s CY 2019 Advance Notice and Draft Call Letter and would take effect in 2019.

Expanded telehealth benefits. All MA plans, including D-SNPs, may start covering telehealth services that do not meet the strict requirements of the Medicare fee-for-service program. These services can be included in the bid amount and will no longer have to be provided as a supplemental benefit, starting in 2020. Look for draft guidance outlining what services are covered and other requirements, such as provider qualifications and coordination of care, as early as November of this year.

MedPAC/MACPAC and GAO studies related to D-SNPs. The Act directs the Medicare Payment Advisory Commission (MedPAC) and Medicaid and CHIP Payment and Access Commission (MACPAC) to evaluate how D-SNPs perform among each other and other comparison groups such as the FAI and MA plans that are not D-SNPs, by March 15, 2022. A separate report by the Government Accountability Office (GAO) will evaluate state-level integration between D-SNPs and state Medicaid agencies and make recommendations for legislative or administrative action.

Implications: Greater alignment across programs and interest in D-SNPs as a platform to integrate care

As a result of permanent SNP authorization and the expanded scope of the MMCO, we are likely to see new investments in more coordinated care by plans, and enhanced interest by state Medicaid agencies in using the MLTSS+D-SNP model as a pathway to improve care for dual eligible individuals. The Act’s focus on integration and alignment across Medicare and Medicaid is likely to benefit dual eligible individuals, states and health plans by advancing efforts to reduce system complexity and support seamless, quality care.

While the Act strengthens the MMCO’s authority to develop regulations and guidance, as well as provide tools and supports to promote integration through D-SNPs, authority remains with the states to pursue a Medicare-Medicaid model of integration based upon state and local resources, unique features of the health care delivery system, and state Medicaid agency goals. States retain flexibility in determining their preferred model of integration, and the type of contracting arrangement they may pursue with D-SNPs.

We expect to see more uniform integration and alignment procedures for D-SNPs at the federal level, which is likely to reduce administrative burden for plans that operate in multiple states. Additionally, all MA plans, including D-SNPs, will be better equipped to address social determinants and help members maintain or improve function with the new flexibility the Act provides in offering more expansive supplemental benefits.

We also hope to see stakeholders, including states, health plans, beneficiaries and the federal government, engaging in a dialogue about how to further Medicare-Medicaid program integration and alignment through D-SNPs.

The MMCO has already issued a call for stakeholder input to inform its work developing a unified D-SNP grievance and appeals process and new integration standards for D-SNPs. It will accept comments on any related issue, but is particularly interested in feedback on topics such as:

D-SNP Integration Standards

  • New integration standards CMS should consider for D-SNPs that coordinate but do not cover Medicaid LTSS and behavioral health services. The Act provided three examples: 1) notifying state of hospitalizations, emergency room visits, and hospital or nursing home discharges; 2) PCP assignment; and 3) data sharing to support coordination of items and services. CMS is looking for feedback on these specific examples, as well as other activities CMS should consider.
  • The circumstances when CMS should determine that a parent organization has “clinical and financial responsibility.”
  • Roles CMS and the states should play in determining whether D-SNPs meet integration standards.
  • CMS considerations for partial carve-outs of Medicaid services when applying integration standards.
  • Issues related to the timing, process, or criteria for FIDE SNP determination the CMS should consider in implementing the provisions of the Act.

Grievances and Appeals

  • Opportunities to limit administrative burden for plans and providers, and opportunities to improve the beneficiary experience.
  • Differences between plan-level Medicare and Medicaid grievances and appeals processes, and an identification of which processes are more protective of the beneficiary.
  • Challenges and options for developing unified Medicare-Medicaid grievances and appeals processes for D-SNPs that have adopted different forms of Medicaid integration (e.g., some D-SNPs coordinate with Medicaid but do not cover Medicaid benefits; other D-SNPs are only permitted to enroll individuals who are also enrolled in a Medicaid managed care plan operated by the D-SNP’s parent organization.)
  • Challenges and considerations for D-SNPs that operate under a contract that includes additional Medicare Advantage products (e.g., impact on reporting requirements).
  • State-specific legal provisions, including statutes, regulations, and consent decrees, that CMS should consider that may complicate its unification work.
  • Operational and business needs of states, plans, providers and other entities that may necessitate categorizing grievances as either “Medicare” or “Medicaid”.
  • Examples of well-crafted, unified notices that could be used in the future.

Comments in response to the letter from MMCO are due April 12, 2018. They should be submitted to [email protected], with “Comments on Section 50311” in the subject line. A link to the Request for Stakeholder Input is available here.


HMA has experts in Medicare Advantage, D-SNP, dual eligible individuals, LTSS and behavioral health. Our consultants support health plans and states with Medicare-Medicaid integration strategies and operations, as well as clinical integration. We can help your organization develop a Medicare and Medicaid integration strategy, or re-evaluate your existing strategy, as well as identify new opportunities provided by the Act. We can also help you formulate a message to the MMCO as it moves forward with the Act’s directive to align policies and procedures, and enhance Medicare-Medicaid integration, for D-SNPs.

For further information, please contact: Sarah Barth at [email protected] or Aimee Lashbrook at [email protected].


[i] Link to CMS Medicare-Medicaid Coordination Office Web Site

[ii] Medicare-Medicaid Coordination Office, Medicare-Medicaid Dual Enrollment from 2006 through 2016. Available at:

MMCO Enrollment Trend Report.

[iii] 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.

[iv] Another capitated model, called the Programs of All-Inclusive Care for the Elderly (PACE), is a Medicare and Medicaid program that provides integrated, coordinated care for dual eligible individuals in select geographies who need a nursing home level of care.

[v] California, Illinois, Massachusetts, Michigan, New York (2 FAIs), Ohio, Rhode Island, South Carolina, Texas, Virginia CMS Capitated FAI Web Link

[vi] J. Verdier, The State of Integration: Next Phase and Opportunities for Working with States, SNP Alliance 13th Annual Leadership Forum Washington, DC, November 2, 2017. States identified: Arizona, California, Idaho, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Tennessee, Texas, Wisconsin.

[vii] Arizona, California, Idaho, Massachusetts, Minnesota, New Jersey, New York and Wisconsin. Centers for Medicare & Medicaid Services, Special Needs Plan Comprehensive Report (February 2018), available at: CMS Special Needs Plan Comprehensive Report February 2018.

[viii] Ibid.