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Blog Series Part 6: Dual Special Needs Plans

This part 6 of our 7 part series focuses on the provisions regarding dual special needs plans (“D-SNPs”) released by the Centers for Medicare and Medicaid Services (“CMS”) in the proposed rule issued on November 1, 2018 (the “Proposed Rule”). D-SNPs enroll individuals who are entitled to both Medicare and medical assistance from a state under Medicaid. States cover some Medicare costs, depending on the particular state and the member’s eligibility. As reported by the Kaiser Family Foundation in “Medicare Advantage 2017 Spotlight: Enrollment Market Update,” Gretchen Jacobson, Anthony Damico, Tricia Neuman, and Marsha Gold ( June 6, 2017), enrollment in special needs plans increased from 2.1 million in 2016 to 2.3 million in 2017 – and 81% of members of these plans are enrolled in D-SNPs.

As background, the Bipartisan Budget Act of 2018 (“BBA”) amended the Social Security Act to require the integration of the Medicare and Medicaid benefits provided to enrollees in D-SNPs, specifically: (1) the development of unified grievance and appeals processes and (2) the establishment of new standards for integration of Medicare and Medicaid benefits for D-SNPs. Current federal regulations establish only minimum requirements, resulting in state Medicaid agencies stepping in to establish requirements that surpass the minimum.

In the Proposed Rule, CMS recognizes the significant challenges members in D-SNPs can face – including separate or overlapping benefits and administrative processes. Unfortunately, these challenges can result in (i) missed opportunities for members to receive appropriate, high-quality care, (ii) ineffective care and (iii) a poor experience of care. Although dually eligible beneficiaries are likely to benefit from coordinated care, less than 10% nationally are receiving integrated care.

Below is a summary of the Proposed Rule’s provisions regarding D-SNPs:

  • New Definitions – CMS is proposing new definitions for the terms “dual eligible special needs plan,” “fully integrated dual eligible special needs plan,” “highly integrated dual eligible special needs plan,” and “aligned enrollment” for purposes of the rules applicable to the Medicare Advantage (“MA”) program. These changes are aimed at consolidating statutory and regulatory references to D-SNPs, which are currently described in several sections. The proposed definition of D-SNP includes the phrase “coordinates the delivery of Medicare and Medicaid services,” which CMS interprets as including a “wide range of activities” that a D-SNP may undertake for its members. As an example, if a D-SNP identifies a member’s need for behavioral health services under Medicaid, it would be required to make arrangements with the applicable Medicaid program for the provision of services by the appropriate provider. Just informing a member to call a phone number or write a state agency would fall short of the required coordination.

  • D-SNPs and Contracts with States – CMS proposes to revise 42 C.F.R. §422.107, which governs the contract between a D-SNP and the state Medicaid agency, to meet the requirement in the BBA to establish additional contractual requirements. Among the proposed changes are amendments to address care transitions – an area of known gaps that results when a member migrates from one setting of care where services are covered by Medicare to another setting of care where services are covered by Medicaid. Under this requirement, certain D-SNPs would be required to notify the state Medicaid agency of hospital and skilled nursing facility admissions for certain high-risk beneficiaries.

  • Suspension of Enrollment for Non-Compliance with D-SNP Integration Standards – CMS has proposed the addition of new language to 42 C.F.R. §422.752 to comply with the BBA’s requirement that CMS impose an intermediate sanction of stopping all new enrollment into a D-SNP if CMS determines that the plan fails to comply with the new integration standards.

  • Grievance and Appeals Procedures – New authority in the BBA directs CMS to create new procedures to unify Medicare and Medicaid grievance and appeals procedures for D-SNPs. CMS describes this as “an opportunity to address an area of longstanding misalignment between the Medicare and Medicaid programs.” CMS proposes to add new regulatory text to require all D-SNPs to assist beneficiaries with Medicaid coverage issues and grievances, including assistance with filing grievances, requesting coverage, and requesting appeals.

    Regarding establishing unified grievance and appeals procedures, CMS recognizes that the central challenge to implementing a unified system is that there are only a limited number of D-SNPs in which aligned enrollment is possible – a situation whereby a member receives coverage of Medicaid benefits from the D-SNP or from a Medicaid managed care organization operated by the D-SNP’s parent organization or another entity that is owned and controlled by the D-SNP’s parent. CMS believes that at this time, it is not feasible to implement fully unified grievance and appeals systems for D-SNPs and Medicaid managed care plans that do not have the same enrollees or where the organizations are unaffiliated or even competitors. The Proposed Rule would only apply to the small number of beneficiaries covered under fully aligned D-SNPs. The proposed regulation addresses integrated organization determinations, as well as integrated reconsiderations.

As hinted at in the Proposed Rule, we predict more in the way of efforts at the federal level to increase integration between Medicare and Medicaid services. Such efforts have been welcomed by states who are increasingly seeking ways to better integrate care – including: (i) managing market participation by using Medicaid procurement to require contracted plans to offer companion D-SNPs in the same service area, (ii) focusing enrollment choices toward alignment and integrated benefits, (iii) maximizing integration through auto-assignment, and (iv) engaging enrollment counselors to maximize aligned enrollment.

Other articles in the series here:

Blog Series Part 1: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program of All-inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020

Blog Series Part 2: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020 and 2021

Blog Series Part 3: Medicare Advantage and Part D Preclusion List

Blog Series Part 4: Quality Improvement Programs

Blog Series Part 5: Part D Plan Sponsors’ Access to Medicare Parts A and B Claims Data Extracts

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Lynsey Mitchel, Attorney, Sheppard Mullin, Corporate Practice
Asssociate

Lynsey Mitchel is an associate in the Corporate Practice Group in the firm's Century City office and is a member of the firm's healthcare practice team.

Areas of Practice

Lynsey represents hospitals, managed care organizations, medical groups, pharmacies, home health providers, medical device retailers and other health care entities and providers. 

Lynsey has deep expertise in HMO regulatory matters and has assisted numerous clients to obtain HMO licensure as health care service plans under California’s Knox-Keene Health Care Service Plan Act. Lynsey...

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