Special Needs Plans Help Medicare Advantage Members With Complex Health Issues

posted by Greg Berger & Tom Kornfield

on July 19, 2017

Special Needs Plans (SNPs, pronounced “snips”) are Medicare Advantage plans that serve as a crucial safety net for more than 2.4 million of our nation’s most vulnerable seniors and individuals with disabilities. SNPs have been an option for Medicare beneficiaries since 2006, and fall into three categories:

  • Chronic condition SNPs (C-SNPs) serve individuals with certain chronic illnesses like diabetes or heart failure. Nearly 340,000 beneficiaries are enrolled in C-SNPs.
  • Dual eligible SNPs (D-SNPs) serve individuals who are dually eligible for both Medicare and Medicaid benefits. Almost 2 million beneficiaries are enrolled in D-SNPs (more than 80 percent of SNP enrollees).
  • Institutional SNPs (I-SNPs) serve people who live in a nursing home or similar facility, or otherwise require an institutional level of care. There are roughly 65,000 beneficiaries enrolled in I-SNPs.

Better Benefits, Better Outcomes

SNPs enable Medicare Advantage plans to tailor their benefits and services to address the particular health care challenges of these three populations. Medicare beneficiaries who enroll in SNPs benefit from care coordination, disease management, and other initiatives pioneered by Medicare Advantage plans that ensure members receive high-quality health care to meet their health needs. For dual eligibles, SNPs also coordinate and integrate Medicaid benefits and services to provide a more seamless experience of care that reduces patient burden and improves health.

Research shows the substantial investments made by Medicare Advantage plans to provide SNP benefits is improving health outcomes in comparison to traditional Medicare: A Health Affairs study found beneficiaries with diabetes in a Medicare Advantage SNP had “lower admission rates, shorter average lengths-of-stay in the hospital, lower readmission rates, slightly lower rates of hospital outpatient visits, and slightly higher rates of physician office visits than their fee-for-service counterparts.” Specifically, the study indicated SNP enrollees had 9 percent lower hospital admission rates, 19 percent fewer hospital days, and 7 percent more office visits than beneficiaries in traditional Medicare.

Higher Quality for the Same Cost

During the past 10 years, SNP enrollment has nearly tripled, from 900,000 in 2007 to 2.4

million enrollees today. At the same time, SNP quality of care has increased substantially. The average Star Rating of contracts that include SNPs increased from 3.59 stars in 2013 to 4.07 stars in 2017.

In addition, the Medicare Payment Advisory Commission (MedPAC) estimates in 2017, Medicare payments to SNPs equal 100 percent of traditional Medicare costs. That means Medicare spending on beneficiaries enrolled in SNPs is now equivalent to spending on beneficiaries in traditional Medicare, despite SNP enrollees receiving all of the additional benefits that come with Medicare Advantage coverage.

Since its creation in 2006, Congress has extended the SNP program seven times. Despite rapid growth in the number of individuals served by SNPs and the advances in quality made by these plans while costs have dropped, the SNP program is scheduled to expire on Dec. 31, 2018, without action by Congress to extend the program. It is important that beneficiaries with complex health issues continue to have access to this option for receiving care that better meets their needs and provides so much value to the Medicare program.

Greg Berger is executive director of Medicare Policy and Tom Kornfield is vice president of Public Programs Policy at AHIP.

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