As the federal government sets about promoting more integrated care for patients eligible for both Medicare and Medicaid, it is also considering cracking down on a type of health plan that could complicate that goal.
These plans, referred to as dual-eligible special needs (D-SNP) plan “look-alikes,” are designed and marketed to attract dual-eligible patients, who may enroll thinking they will receive integrated Medicare and Medicaid benefits and extra care coordination. Instead, they find themselves in general Medicare Advantage plans without the ability to integrate with Medicaid and miss out on benefits they could receive elsewhere, critics argue.
D-SNP look-alikes have drawn the wrath of health insurers that offer true D-SNPs, which hold contracts with both the CMS and a state Medicaid agency, as well as advocates who worry the look-alikes confuse vulnerable patients. The issue was a topic at this week’s spring meeting of the Special Needs Plan Alliance, which is partnering with several insurers, including L.A. Care Health Plan, to encourage the CMS to curb look-alike plans.
“Dually eligible individuals may be enrolling in plans that do not provide any integration on the Medicaid side when in fact they could benefit from it,” said Dr. Cheryl Phillips, CEO of the SNP Alliance. “Yes, they have the right to choose (their health plan), and we support that, but we want to make sure that choice is transparent.”
The CMS seems to be listening to those concerns. While the agency isn’t acting yet, it is considering various ways to curb enrollment in look-alike plans in future regulation, from better educating dual-eligible individuals on their options or even rejecting applications for Medicare Advantage insurers to offer non-integrated plans that appear to target dual-eligible patients, as the Medicare Payment Advisory Commission has suggested.
D-SNPs, which were first offered in 2006, are Medicare Advantage plans that limit enrollment to dual-eligible patients. These contracts allow states to encourage or require the D-SNPs to integrate Medicare and Medicaid benefits for their members. For example, a patient may receive hospital and physician services from Medicare Advantage, while Medicaid may pay for that patient’s Medicare cost-sharing, behavioral health services or long-term care benefits.
Of the more than 10 million dually eligible individuals in the United States, 1.7 million were enrolled in D-SNPs in 40 states and the District of Columbia as of January 2018, according to MedPAC. Dual-eligibles, who are generally very poor with complex health needs, represented a fifth of Medicare beneficiaries but accounted for 34% of total Medicare spending in 2013, and made up 15% of Medicaid beneficiaries but accounted for 32% of total Medicaid spending, according to MedPAC.
While they are meant to offer integrated benefits, oftentimes D-SNPs have little integration because of administrative and operational challenges, MedPAC has noted. The Bipartisan Budget Act of 2018 sought to address that by laying out a “road map” to improve integration between Medicaid and Medicare in D-SNPs and streamline the grievance and appeals process for dual-eligible members, explained Alex Shekhdar, a Medicaid managed-care expert.
In theory, having dual-eligibles receive integrated Medicare Advantage, Part D and Medicaid benefits from one organization should eliminate those inefficiencies, provide more coordinated care, improve quality and lower the cost of that care. But comprehensive data on D-SNP quality and spending is lacking, several sources said.
The CMS is starting to put the budget act’s requirements into motion by holding D-SNPs to a stricter standard of showing they are integrated with a state Medicaid agency, effective in 2021.
But D-SNP look-alikes get in the way of those goals, critics say.
“Members are not going to get the same level of care; they are not going to get the care coordination that they get in the fully integrated plan,” said John Baackes, CEO of L.A. Care, which serves 16,000 dual-eligible members in California’s Medicare-Medicaid demonstration plans. “So we are very concerned about them and looking for ways we can advise CMS and the state on ways they can isolate these programs so they are sold for what they are and not what they pretend to be.”
The CMS also noted in its final call letter that the look-alike plans may undermine state integration efforts and impede goals of lowering cost and improving quality of care.
Still, some insurers say there are situations in which D-SNP look-alikes have a place.
Blue Shield of California, which offers a D-SNP look-alike, said in a statement: “While we wholeheartedly support integrated programs, our (D-SNP look-alike) plan makes managed care available to those members who choose not to enroll in our Cal MediConnect product and don’t have the option to enroll in a D-SNP.”
Look-alike plans have proliferated in recent years for various reasons. They started in California, but the SNP Alliance’s Phillips said look-alike plans are now offered in an estimated 34 states. The latest data from MedPAC shows that in 2017, there were 19 look-alike plans with 95,000 combined enrollees in seven counties of California alone, compared with just four plans with 5,000 members in those areas in 2013. Enrollment in look-alike plans has surpassed enrollment in true D-SNPs, which served 72,700 members in those seven California counties in 2017.
The jump happened after the state began encouraging dual-eligible patients to enroll in the state’s Medicare-Medicaid plan financial alignment demonstration, called Cal MediConnect, which launched in 2014 in those seven counties. The state limited enrollment in regular D-SNPs and barred brokers from getting commissions on the new Medicare-Medicaid plans. So insurers and brokers pivoted to offering look-alike plans.
“It’s clearly a natural response to the program rules that have been put on this state, which has basically limited the ability of Medicare Advantage organizations to offer D-SNPs,” said Erin Trish, associate director of the Schaeffer Center for Health Policy & Economics at the University of Southern California.
Health insurers, unable to grow their D-SNP business, built other plans that looked a lot like D-SNPs, in terms of the types of benefits they offer. For instance, they may have the highest allowable maximum out-of-pocket threshold for hospital and physician services and a beneficiary premium for prescription drugs. Those characteristics wouldn’t be attractive to a member who isn’t dually eligible, but they don’t matter to dual-eligible members because all of them receive a low-income subsidy that covers their premiums and Medicaid covers their cost-sharing.
Health insurers also may want to offer a look-alike plan to avoid having to win a state Medicaid contract, which can be difficult. Look-alike plans also don’t have to submit a model of care or report quality metrics to the CMS. Moreover, look-alike plans nab health insurers higher payments from Medicare Advantage because those payments are risk-adjusted for the dual-eligible patient’s health status.
“They get paid more for these dual eligibles, who are higher cost and higher acuity of care. So the revenue is up there for taking care of these beneficiaries,” said Jeff Fox, president of Gorman Health Group, a consultant firm for Medicare Advantage plans.
But Fox said the quality of care that patients get in D-SNP look-alike plans is on par with integrated plans; it’s just that care coordination with Medicaid benefits is missing.
There has not yet been an evaluation of the Medicare-Medicaid plan demonstration in California, so it’s hard to say whether D-SNP look-alike plans are truly a problem, according to Trish. It’s also hard to know if patients in look-alike plans would have enrolled in an integrated Medicare-Medicaid plan if look-alike plans were not an option, she said.
But the SNP Alliance insists patients would be better off in an integrated plan. Phillips said it’s unclear if the CMS has the ability to prohibit the creation of look-alike D-SNPs. But stakeholders would like to see a way to ensure dual-eligible members at least understand their options and don’t enroll in a non-integrated plan because of misleading marketing tactics, she said.
They have some ideas, such as requiring outbound calls to beneficiaries to verify they want to enroll in a plan that does not coordinate benefits with Medicaid. The SNP Alliance also recommended that the CMS: address broker incentives that drive enrollment into look-alikes; allow high-quality D-SNPs to market year-round; and require brokers to disclose the full menu of plan options for a beneficiary.