Low-income older adults and people with disabilities who are enrolled in both Medicare and Medicaid face incredible challenges getting care to meet their needs. Many have multiple, complex and chronic conditions, and limitations that make doing everyday activities like cooking or bathing difficult. Yet, because their two insurers — Medicare for most medical services and Medicaid for most supports with daily living — operate largely separate from one another, people are left to navigate two programs themselves and often suffer care gaps, delays, and avoidable hospitalizations. However, new federal rules hopefully mean more people will get access to coverage options that integrate Medicare and Medicaid.
A type of Medicare Advantage plan called a fully-integrated dual-eligible special needs plan (FIDE-SNP) was developed to simplify the fragmentation created by two forms of coverage offered by differing levels of government — Medicaid is largely designed and operated by the states, while Medicare is run by the federal government. Despite “fully-integrated” being part of the FIDE-SNP name, the original definition allowed several workarounds and a FIDE SNP didn’t always mean one plan for Medicaid and Medicare coverage, allowing considerable benefit “carve-outs” and unaligned enrollment. However, on April 29, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the Contract Year 2023 Medicare Advantage Policy and Technical Changes Final Rule which made considerable strides to improve upon the FIDE-SNP specifically and the Medicare program’s coordination with state Medicaid programs.
There are five major changes that will impact FIDE-SNPs and other types of dual-eligible specials needs plans (D‑SNPs) dedicated to serving dual-eligible individuals that are worth noting:
- “Fully integrated” now really means one plan. Beginning in 2025, FIDE-SNPs will only be able to serve dual-eligible individuals for which the plan is also at risk for comprehensive Medicaid benefits. Currently, CMS’ rules permit a person to enroll in a FIDE-SNP for Medicare coverage but receive their Medicaid coverage through another health plan or fee-for-service. CMS is closing this loophole — when a person enrolls in a FIDE-SNP, they will receive their full range of Medicare and Medicaid coverage through it.
- The full range of services are available. A holistic set of benefits ensures dual-eligible individuals receive person-centered care, where behavioral health, medical care, and long-term services and supports (LTSS) are equally valued and aren’t administered in silos with competing or conflicting priorities. Today, a plan can be considered a FIDE-SNP even when major Medicaid benefits are carved-out, but beginning in 2025 FIDE-SNPs will be required to cover at a minimum: Medicare cost sharing, Medicaid primary and acute care, Medicaid behavioral health, Medicaid nursing facility long-stays, Medicaid home health, and Medicaid medical supplies, equipment, and appliances. This approach also improves opportunities for states, health plans, and providers to support LTSS rebalancing goals, because a single entity is at financial and clinical risk regardless of whether an individual is receiving short-stay/short-term LTSS, or longer-term LTSS in a community or facility setting.
- Consumer feedback must be solicited and incorporated. All D‑SNPs, including FIDE-SNPs, will be required to have a consumer advisory board, increasing the voice of dual-eligible individuals in D‑SNP program design. This has been an important tool in the Medicare-Medicaid Plan (MMP) Financial Alignment Demonstration1, allowing MMPs to understand enrollee preferences, needs, and care experiences, and as a result, identify education opportunities and build quality and access improvement processes.
- Enhanced Financial and Quality Transparency. The final rule allows for states to require FIDE-SNPs and other D‑SNPs in certain scenarios to operate under a separate contract. While this seems weedy, it is an incredibly important advancement towards greater transparency. Medicare Advantage contracts can be full of multiple plan types, including D‑SNPs and non-D-SNPs, spanning multiple states. Medicare Advantage’s quality Star Ratings system, financial data submissions that occur through medical loss ratio (MLR) reporting, network assessments, and other important oversight activities occur at the contract level. As a result, dual-eligible individuals, their families, and states often have little line of sight into how a D‑SNP actually performs, because D‑SNP performance is combined with non-D-SNP plans under the contract. Dedicating a Medicare Advantage contract ID to D‑SNP products only, and limiting this contract to a single state, will allow better transparency in access, outcomes, and performance; integrated provider network development and oversight; improved quality reporting; and, better aligned financial incentives.
Summary of Key Provisions in the CY2023 Medicare Advantage Final Rule and Their Application to Different D‑SNP Types2
However, even with hundreds of pages in the Final Rule dedicated to Medicare-Medicaid integration, there’s more to do. This is especially important given that CMS announced its intention to end a demonstration program focused on integrated Medicare and Medicaid through managed care — Medicare-Medicaid Plans — operating in 10 states today. It is critical to ensure we do not lose the progress the demonstration made and that these states, and the dual-eligible individuals who reside in them, have a smooth transition to an alternative integrated coverage option.
- Remove incentives for states, plans, or providers to work around integration. Despite efforts to promote integrated care for dual-eligible individuals, it is often easier to offer unintegrated programs and plans, and as a result, there are incentives to work around integration. CMS began to address this in January 20223 by implementing restrictions against D‑SNP “lookalikes,” non-D-SNP plans that enroll a substantial portion of dual-eligible individuals. However, the threshold for dual-eligible enrollment is high (80 percent of the plan’s enrollment must be dual-eligible to meet the lookalike definition), and certain plans aren’t subject to the definition (e.g., chronic condition (C)-SNPs targeting individuals with diabetes or heart disease). This definition is likely CMS’ attempt to ease the restriction in, but the consequence could be continued circumvention of integration requirements. At a minimum, CMS should monitor the market closely to ensure programs don’t operate just below the thresholds to undermine integration, or leverage another type of special needs plan tailored for individuals with chronic illness (C‑SNPs) to work around requirements to become a D‑SNP.
- CMS should communicate the value of integrated care clearly. Eliminating work arounds to integration should be coupled with making it easer to choose an integrated program for dual-eligible individuals. We’ve written before about how difficult it is to choose an integrated program when one is presented with dozens of options, and when enrollment counselors aren’t trained on the nuances or unique needs of dual-eligible individuals. CMS can improve this through refining Medicare Plan Finder, working with and empowering State Health Insurance Assistance Programs (SHIPs) and other enrollment channels, and incentivizing Medicare agents to sell into integrated products (or disincentivizing them from selling into unintegrated products).
- Mandate all D‑SNPs operate on a separate contract. Do not just leave this up to states with a FIDE-SNP or D‑SNPs that have exclusively aligned enrollment. Integrated quality and financial reporting and oversight is the keystone to aligning incentives between Medicare and Medicaid, and all dual-eligible individuals that opt to enroll in these plans should have this degree of transparency.
- Expand opportunities for passive enrollment. Federal regulation4 allows CMS to passively enroll individuals when necessary to promote “integrated care” and “continuity of care” for full benefit dual-eligible individuals. CMS should reinterpret what qualifies as a situation necessary to promote integrated care and continuity of care and give states greater discretion to passively enroll dual-eligible individuals into integrated D‑SNPs, including extending to individuals becoming newly dually eligible. Passive and auto-enrollment happen across our health care system today — including for low-income subsidy Medicare Part D plans, employer-sponsored health plans, and Medicaid plans. Coupled with appropriate beneficiary education, passive enrollment can be a strong tool to increase dual-eligible beneficiary participation in integrated programs with enhanced beneficiary protections. Importantly, it can simplify their choices.
- Provide a clearer path to state Medicare shared savings. Perhaps the most consequential policy flexibility allowed through the demonstrations has been the ability for states to share in Medicare savings. A common concern for states that invest in integrated programs is that short-term financial savings occur through reduced hospital and emergency department utilization, both of which accrue to the Medicare program, despite Medicaid investments. The demonstration addressed this by offering states a percentage of the assumed savings that occur due to integration. As the demonstration sunsets, it will be important for CMS to identify new mechanisms that incentivize state investment in integration.
- Explore Medicaid authority more broadly. CMS has considerable untapped Medicaid authority to promote Medicare-Medicaid integration and ensure that all dual-eligible individuals have access to an integrated model. Leaning on Medicaid program approvals, CMS (through the Center for Medicaid and CHIP Services or CMCS) could extend the reach of integrated programs and promote access for the dual-eligible individuals who live in a community without a meaningfully integrated option.
All told, the CY2023 Medicare Advantage Final Rule is a big step forward, demonstrating an unprecedented and incredible amount of focus on Medicare-Medicaid integration in Medicare Advantage.
Community Catalyst. The Biggest Value is Getting the Voice of the Member. January 2019.↩︎
For additional detail on Final Rule provisions specific to D-SNPs and dual eligible individuals, see https://atiadvisory.com/ati-analysis-of-the-cy2023-medicare-advantage-final-rule-d-snp-and-dual-eligible-impacts/↩︎
42 CFR 422.514(d)↩︎
42 CFR 422.60(g)(1)(iii)↩︎