Under a new medicare program to expand coordinated care for vulnerable seniors, insurers and managed care plans across the
country are offering a range of Special Needs Plans (SNPs, or "snips") to beneficiaries who are dual eligibles, in nursing
homes or suffer from chronic conditions. Most of the 275 SNPs approved by the Medicare program so far aim to provide care
to low-income seniors who now receive prescription drug benefits from Medicare instead of state Medicaid programs; special
needs plans for other groups are emerging slowly.
Special needs plans by SNP type
|
A main attraction for insurers in adopting the SNP format is the ability to design benefit packages that provide care more
efficiently and economically to particular Medicare populations. Although this new type of Medicare plan doesn't pay higher
rates, many enrollees are eligible for significant subsidies from the federal program, which can offset additional medical
costs. In addition, payments to Medicare Advantage-Prescription Drug plans (MA-PDs) are scheduled to be fully risk-adjusted
in 2007; analysts expect that payments to SNPs ultimately will be higher on average because of the subsidies plus payment
adjusters based on beneficiary characteristics.
For the Centers for Medicare and Medicaid Services (CMS), the program provides an opportunity to better coordinate federal
and state coverage for vulnerable populations. The hope is that SNPs will be able to provide higher quality of care to these
patients at lower costs.
The Medicare Modernization Act of 2003 (MMA) established the SNP program as a way to permit MA plans to demonstrate their
ability to manage the care of certain high-cost elderly beneficiaries more efficiently and effectively. While most SNPs are
offered by existing MA plans, some are SNP-only, i.e., the contractor sponsors only that plan. All plans have to meet all
MA criteria, including prescription drug coverage. However, SNPs have some flexibility in enrollment procedures and reporting
requirements and may enroll a "disproportionate percentage" of a target population than occurs nationally in the Medicare
population. RAPID GROWTH
Shifting from demo to SNP
|
SNPs have grown quickly, rising from 125 in 2005 to 276 this year. As of January 1, 2006, CMS had signed 164 contracts with
91 MCOs and other healthcare organizations to offer SNPs in 42 states and Puerto Rico. Many of these contracts cover more
than one SNP, while some insurers prefer to negotiate a separate agreement for each plan. Most SNP contracts are linked to
HMOs; 23 contracts are with local PPOs. Some SNPs cover entire states, but most serve specific counties or metropolitan areas.
Three SNP contracts are with regional PPOs in Hawaii, Florida and New York (see map, "Special Needs Plans by SNP type;" detailed
information on the SNP program is available at http://www.cms.hhs.gov/specialneedsplans/).
As a result, almost 60% of all Medicare beneficiaries now live in areas served by some kind of SNP. Most are clustered in
more populated regions, while eight states have only one SNP. Florida has 14 SNP contracts, followed by New York, Minnesota,
California, Arizona and Texas. Although only 65,000 Medicare beneficiaries were enrolled in SNPs last year, the number now
is much higher and is projected to grow as additional SNPs gain approval.
The market response "is much stronger than anyone anticipated when the measure was drafted," says John Blum, analyst with
Avalere Health. The Medicare legislation aimed to provide an umbrella for several smaller demonstrations and other special
programs. Insurers have seized the program as a way to broaden their market by integrating services for dual eligibles, as
well as for institutionalized and vulnerable populations, Blum says. And some plans are offering "niche products" that provide
services to seniors with HIV/AIDS or mental health conditions.
