Congress should expand Medicare special needs plans

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Current SNP authorization is set to expire at the end of 2013. Congress should move swiftly to extend the program, given that health plans must file their notices of intent to offer these plans for the 2014 year by this month – November 2012 – as well as meet a series of other mandatory requirements by next summer. The hope is that Congress will approve at least a one-year extension in the upcoming lame duck session, and then consider an additional program renewal – say, five years – as part of a broader package next year.
 
Medicare SNPs serve three broad categories of beneficiaries: 1) those living with chronic conditions (C-SNPs); 2) those who qualify for an institutional level of care (I-SNPs); and 3) those who are dually eligible for both Medicare and Medicaid (D-SNPs). 
 
As it stands today, SNPs are one of only two managed care entities – the other being the Program of All-Inclusive Care for the Elderly (PACE) – that is able to serve dual eligibles  exclusively.
 
The Centers for Medicare and Medicaid Services (CMS) provides strong beneficiary protections and program oversight for SNPs. SNPs must design individual care plans with input from beneficiaries and their families, as well as meet hundreds of requirements related to quality and access.
 
New evidence shows that the SNP model of providing patient-centered, coordinated care to vulnerable populations is working. To give just one example, in April 2012 Avalere Health found that SCAN’s dual eligibles had a hospital readmission rate that was 25 percent lower than that of fee-for-service dual eligibles with identical risk profiles. SCAN also performed 14 percent better than Medicare fee-for-service on the “prevention quality indicator (PQI) overall composite” – keeping people out of the hospital in the first place.
 
If California fee-for-service duals had the same hospitalization and readmissions rates as SCAN’s duals, Avalere found that this would result in at least $50 million in annual savings to Medicare in California alone.
 
Other SNPs, such as MercyCare and XL Health, are also showing positive outcomes. That is why Congress should provide SNPs with at least a one-year extension after the election. Once SNPs are locked in through 2014, it will give Congress an opportunity to approve a longer extension. The policy justification for this action is clear.
 
First, it would stabilize specialty care for the 1.5 million current special-needs beneficiaries, and provide them peace of mind that their existing care plans will continue. Second, it would allow these plans to continue making important progress in reducing emergency room visits, hospitalizations, re-hospitalizations, and nursing home stays. Finally, it will give state and federal policymakers a chance to judge SNPs against newly emerging programs like ACOs and the Duals Demonstration to determine which works best for this vulnerable population.
 
In addition to the multi-year extension, Congress should do the following:
 
1. Allow all SNPs to offer long-term services and supports.  These services help keep seniors living at home independently and not in an institution.  Under current law, only D-SNPs are authorized to provide these supplemental benefits. 

2. Require Medicare to improve the accuracy of the MA risk-adjustment methodology by adding new risk factors for frailty, dementia, and a number of chronic conditions and extending the “new enrollee” factor for C-SNPs to include D-SNPs. These measures will reduce financial barriers to specialization.
 
3. Ensure that SNPs are evaluated based on their performance in relation to their specialty care mandate. Plans focused on serving a particular chronic condition should be judged on measures appropriate to that condition.
 
Experts agree that the frail, disabled, and chronically ill are poorly served by fragmented care models. Their complex care needs are much better served by the patient-centric models of care that SNPs provide. If Congress extends the life of SNPs, with proper refinement of program, payment, and oversight requirements, a timely new generation of specialized care can emerge. This model would bend the cost curve, while actually improving care for our most needy citizens.

Schwab is SCAN's Chief Medical Officer. SCAN is the nation’s third-largest not-for-profit Medicare Advantage plan, is based in Long Beach, CA and serves about 130,000 Medicare beneficiaries in California and Arizona.