In the January/February 2009 issue of Health Affairs, HCP faculty member David C. Grabowski, PhD, published the article Special Needs Plans and the Coordination of Benefits and Services for Dual Eligibles.

Special Needs Plans (SNPS) are a new type of Medicare Advantage plan developed with the intention of better coordinating Medicare and Medicaid benefits and services for dually eligible beneficiaries. The lack of coordination across the two programs has contributed to higher spending and worse quality of care for the dual eligible population.  SNPs provide the opportunity to combine Medicare and Medicaid managed care contracting, which may encourage a more efficient production of health care services across the two programs.

Although SNPs have great potential, Grabowski reports that they “have not greatly expanded the number of people enrolled in joint Medicare-Medicaid products.” Currently, there are 854,877 dual eligibles enrolled in SNPs—roughly 11 percent of the dually eligible population nationwide. However, most SNPs have not established a “contractual relationship with state Medicaid plans to add value for dually eligible beneficiaries beyond traditional Medicare Advantage plans.”  As expected, SNP penetration rates are much higher in states such as Arizona and Minnesota with the capacity to coordinate with SNPs than in states without that capacity.

Moving forward, Grabowski notes several steps that may encourage the viability of SNPs as a mechanism toward coordinating services. First, a robust Medicaid managed care market within a state is essential for the establishment of a fully capitated Medicare/Medicaid model. The easing of federal requirements, so that states can contract with SNPs for Medicaid-financed services without having to obtain a Medicaid waiver, would be an important step. Second, the recent federal mandate that dual-eligible SNPs must contract with state Medicaid agencies will ensure that new dual-eligible SNPs do not offer “Medicare only” plans but, rather, engage Medicaid in offering a joint Medicare-Medicaid product. Finally, there has been little evaluation of SNPs’ performance in terms of costs and outcomes for beneficiaries. Thus, it will be important to track whether improved care coordination via dual-eligible SNPs translates into better beneficiary outcomes and lower spending. For further information on this study, please read the entire article (http://content.healthaffairs.org/cgi/content/abstract/28/1/136?etoc).