Medicare finalizes requirements for special needs plans

Private Medicare plans for low-income, high-cost patients must enter into contracts with states by 2013.

By Charles Fiegl — Posted Sept. 12, 2011

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Specialized private Medicare plans for certain poor, sick patients will be subject to new quality improvement requirements over the next several years, the Centers for Medicare & Medicaid Services announced in a final rule released Aug. 26.

CMS adopted standards for improving the quality of care offered by Medicare special needs plans, which provide Medicare Advantage coverage to patients who are institutionalized, have severe chronic conditions, or are eligible for both Medicare and Medicaid programs.

"Under these rules, SNPs must develop a model of care that ensures your health care needs are assessed, a plan of care is developed specifically for you, and a team of health care providers manages your care," said CMS Deputy Administrator Jonathan Blum in a statement on the rule's release. "SNPs must also have a quality improvement program that measures whether the care being provided is actually making you healthier."

Federal statute has required the plans to measure health outcomes and to follow other quality-of-care initiatives. Under the health system reform law, CMS also will require all SNPs to be approved by the National Committee on Quality Assurance starting in 2012. CMS also will expand this effort by conducting assessments on a sample of the plans. This would help identify strengths and weaknesses in models of care developed by SNPs, the Medicare agency said.

The plans themselves will face some challenges meeting new requirements, said Valerie Wilbur, the co-chair of the SNP Alliance and vice president of the National Health Policy Group in Washington. The alliance agrees with a number of changes in the rule, but the plans have the same pay structure as Medicare Advantage plans despite SNPs having additional requirements. Future cuts to Medicare Advantage plans and the possibility of additional federal budget cuts to reduce deficits will make achieving new mandates difficult, she said.

"The fact that there is no additional payment to compensate for additional costs is a big challenge," she said.

CMS will require SNPs for dual eligibles to enter into contracts with state Medicaid agencies by 2013, the final rule states. The Medicare Rights Center, an advocacy group based in New York, supported the requirement because it allows states to ensure that health plans meet quality-of-care standards, said Doug Goggin-Callahan, the center's New York state policy director. For instance, a state would ensure that an SNP met minimum plan requirements, such as cost-sharing protection for enrollees.

The Medicare Rights Center also favored changes in the rule to the Medicare prescription drug program. CMS will eliminate Part D late enrollment penalties applied to low-income patients. Those who delay enrollment in a Medicare drug plan when they're first eligible typically pay higher premiums once they do enroll. The Medicare agency no longer will charge late fees to those eligible for additional government subsidies, according to the rule.

CMS also strengthened regulations for insurance agents and brokers selling Medicare Advantage and Part D plans. The Medicare agency has taken steps to limit churning, or patients switching coverage plans frequently, in the Medicare Advantage market. Agents and brokers won't be rewarded for selling a plan that a patient leaves within the first 90 days, the rule states.

Plan sponsors are required to limit gifts during marketing events for potential enrollees to items of nominal value. The rule uses an example of giving piggy banks as nominal gifts.

The rule also requires brokers to limit the number of insurance products to be discussed with consumers during marketing events. In advance of an event, a plan sponsor must document with the patient the scope of a meeting. However, the rule provides some flexibility by allowing a broker to discuss other products when a beneficiary raises a question or requests more information about different plans, Goggin-Callahan said.

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Enrollment data

In 2003, Congress created a new Medicare Advantage coordinated care plan for patients with special needs. These special needs plans serve a challenging and costly segment of the patient population -- those who are institutionalized, are dually eligible for Medicare and Medicaid, or have severe or disabling chronic conditions. Each year's figures are from July.

Year SNP enrollees
2007 958,566
2008 1,218,413
2009 1,333,989
2010 1,314,123
2011 1,363,159

Source: Centers for Medicare & Medicaid Services on special needs plans data (link)

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