Medicare Special Needs Plans: CMS Should Improve Information Available about Dual-Eligible Plans' Performance
Published: 2012-09-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: About 9 million of Medicare's over 48 million beneficiaries are also eligible for Medicaid because they meet income and other criteria. These dual-eligible beneficiaries have greater health care challenges than other Medicare beneficiaries, increasing their need for care coordination across the two programs. In addition to meeting all the requirements of other MA plans, D-SNPs are required by CMS to provide specialized services targeted to the needs of dual-eligible beneficiaries as well as integrate benefits or coordinate care with Medicaid services. GAO was asked to examine D-SNPs' specialized services to dual-eligible beneficiaries. GAO (1) analyzed the characteristics of dual-eligible beneficiaries in D-SNPs and other MA plans, (2) reviewed differences in specialized services between D-SNPs and other MA plans, and (3) reviewed how D-SNPs work with state Medicaid agencies to enhance benefit integration and care coordination. GAO analyzed CMS enrollment, plan benefit package, projected revenue, and beneficiary health status data; reviewed 15 D-SNP models of care and 2012 contracts with states; and interviewed representatives from 15 D-SNPs and Medicaid agency officials in 5 states.
section_title: What GAO Found
paragraphs: About 9 percent of the dual-eligible population is enrolled in 322 Medicare dual-eligible special needs plans (D-SNP), a type of Medicare Advantage (MA) plan. All dual-eligible beneficiaries are low income, but those in D-SNPs tended to have somewhat different demographic characteristics relative to those dual-eligible beneficiaries in other MA plans. On the basis of the most current data available (2010-2011), compared to those in other MA plans, dual-eligible beneficiaries in D-SNPs were more frequently under age 65 and disabled, more likely to be eligible for full Medicaid benefits, and more frequently diagnosed with a chronic or disabling mental health condition. In spite of these differences, the health status of D-SNP enrollees as measured by their expected cost to Medicare was similar to the health status of dual-eligible enrollees in other MA plans in 2010. D-SNPs provide fewer supplemental benefits--benefits not covered by Medicare fee-for-service (FFS)--on average, than other MA plans. Of the 10 supplemental benefits offered by more than half of D-SNPs, 7 were offered more frequently by other MA plans and 3 were offered more frequently by D-SNPs. Yet D-SNPs spent proportionately more of their rebate--additional Medicare payments received by many plans--to fund supplemental benefits compared to other MA plans, and less to reduce Medicare cost-sharing, which is generally covered by Medicaid. The models of care GAO reviewed, of 107 submitted for 2012, described in varying detail how the D-SNP planned to provide specialized services, such as health risk assessments, and meet other requirements, such as measuring performance. However, the Centers for Medicare & Medicaid Services (CMS), which administers Medicare and oversees Medicaid, did not require D-SNPs to use standardized measures in the models of care, which would make it possible to compare the performance of D-SNPs. While D-SNPs are not required to report that information to CMS, such information would be useful for future evaluations of whether D-SNPs met their intended results, as well as for comparing D-SNPs. CMS stated that contracts between D-SNPs and state Medicaid agencies are an opportunity to increase benefit integration and care coordination. Our review of the contracts indicated only about one-third of the 2012 contracts contained any provisions for benefit integration, and only about one-fifth provided for active care coordination between D-SNPs and Medicaid agencies, which indicates that most care coordination was done exclusively by D-SNPs, without any involvement of state Medicaid agencies. However, some D-SNP contracts with state Medicaid agencies specified that the agencies would pay the D-SNPs to provide all or some Medicaid benefits. Representatives from the D-SNPs and Medicaid officials from the states GAO interviewed expressed concerns about the contracting process, such as limited state resources for developing and overseeing contracts, as well as uncertainty about whether Congress will extend D-SNPs as a type of MA plan after 2013, and the implementation of other initiatives to coordinate Medicare and Medicaid benefits for dual-eligible beneficiaries that could replace D-SNPs. To increase D-SNPs' accountability, GAO recommends improving D-SNP reporting of services provided to dual-eligible beneficiaries and making this information available to the public. In its comments on a draft of GAO's report, CMS generally agreed with our recommendations.

section_title: Letter
paragraphs: About 9 million of Medicare’s over 48 million beneficiaries are also eligible  for Medicaid, a joint federal-state program that finances health insurance  coverage for certain categories of low-income adults and children. In  2007, these individuals, referred to as dual-eligible beneficiaries, made up  18 percent of all Medicare beneficiaries but accounted for 31 percent of  Medicare spending. In the same year, dual-eligible beneficiaries were  about 15 percent of Medicaid enrollees but accounted for nearly   40 percent of Medicaid spending. Disproportionate spending for these  individuals is largely because dual-eligible beneficiaries are more likely  than other Medicare beneficiaries to be disabled; report poor health status  and limitations in their activities of daily living, such as bathing and  toileting; and have cognitive impairments, mental disorders, and certain  chronic conditions such as diabetes and pulmonary disease. In addition,  dual-eligible beneficiaries’ health care services must be coordinated  across Medicare and Medicaid, and each program has its own set of  covered services, provider networks, regulations, and payment policies.
The Medicare Prescription Drug, Improvement, and Modernization Act of  2003 (MMA) authorized the creation of a type of Medicare Advantage  (MA) plan referred to as a special needs plan (SNP), to address the  unique needs of certain Medicare populations. About 1.2 million of the  dual-eligible population is enrolled in dual-eligible SNPs (D-SNP), which  are SNPs exclusively for dual-eligible beneficiaries. Dual-eligible  beneficiaries may also choose to enroll in other types of SNPs for which  they are eligible, including institutional SNPs (I-SNP) for individuals  residing in nursing facilities or institutions, chronic condition SNPs   (C-SNP) for individuals with severe or disabling chronic conditions, or  other MA plans, or remain in Medicare fee-for-service (FFS). In addition  to meeting all the requirements of other MA plans, all SNPs, including  D-SNPs, are required by the Centers for Medicare & Medicaid Services  (CMS)—the agency in the Department of Health and Human Services  (HHS) that administers Medicare and oversees Medicaid—to provide  specialized services targeted to the needs of their beneficiaries, including  a health risk assessment and an interdisciplinary care team for each  beneficiary enrolled.
You asked us to examine the extent to which D-SNPs provide unique  services for dual-eligible beneficiaries and how D-SNPs and states work  together to serve these beneficiaries. In this report, we (1) describe the  characteristics and health status of dual-eligible beneficiaries in D-SNPs  and how they compare to those of dual-eligible beneficiaries in other MA  plans and Medicare FFS, (2) determine the extent to which D-SNPs’  specialized services differ from those offered by other MA plans, and   (3) describe how D-SNPs work with state Medicaid agencies to enhance  benefit integration and care coordination for dual-eligible beneficiaries.
To describe the demographic characteristics of dual-eligible beneficiaries  in D-SNPs and how they compare to those of dual-eligible beneficiaries in  other MA plans and Medicare FFS, we analyzed July 2011 enrollment  data from CMS. To compare the mental health characteristics and health  status of dual-eligible beneficiaries in D-SNPs with dual-eligible  beneficiaries enrolled in other MA plans and FFS, we analyzed CMS data  on 2010 beneficiary risk scores, which measure expected Medicare costs  for each beneficiary on the basis of demographic and diagnosis data.  Specifically, we calculated the average risk scores for dual-eligible  beneficiaries in D-SNPs, other MA plans, and FFS in 2010.analyses, we used enrollment and plan benefit data to identify the type of  plan (D-SNP, other MA plan, or FFS) in which each beneficiary was  enrolled.
To determine the extent to which D-SNPs’ specialized services differed  from services offered by other MA plans, we used CMS’s 2012 plan  benefit data to compare D-SNPs’ supplemental benefits, such as dental  and vision coverage, that are outside the original Medicare FFS benefit  package, with the supplemental benefits offered by other MA plans. We  also used CMS’s 2012 bid pricing tool data, which contain information MA  plans submitted to CMS on their projected revenue requirements for  providing Medicare-covered services to enrolled beneficiaries, to  understand how D-SNPs and other MA plans fund the supplemental  benefits they offer. Additionally, we interviewed officials from 15 D-SNPs  that had enrolled at least 100 dual-eligible beneficiaries in both 2010 and  2011 to discuss what services are available to dual-eligible beneficiaries  in D-SNPs and, when applicable, whether differences exist between the  care coordination services they offer in their D-SNPs and their MA  organization’s other MA plans. We judgmentally selected these D-SNPs  to cover a range of geographic regions and plan sizes. We also reviewed  the 2012 models of care submitted to CMS by these 15 D-SNPs— representing 14 percent of the 107 models of care we received from  CMS. The model of care provides a narrative description of how the  D-SNP will address certain clinical and nonclinical elements, such as a  health risk assessment and an adequate provider network. We focused in  particular on how D-SNPs identified the most-vulnerable  subpopulations—beneficiaries that need the most-intensive care—and  how they planned to meet these care needs.
To describe how D-SNPs worked with state Medicaid agencies, we  analyzed all of the 124 contracts between D-SNPs and state Medicaid  agencies that were submitted to CMS for 2012 to determine whether the  contracts contained provisions expressly addressing benefit integration  and care coordination for dual-eligible beneficiaries between the D-SNP  and the state Medicaid agency. We supplemented this analysis with  interviews of officials from five state Medicaid agencies judgmentally  selected to cover a range of geographic areas,our sample of D-SNPs.
We assessed the reliability of the data we received from CMS by  performing appropriate electronic data checks and by interviewing agency  officials who were knowledgeable about the data. This allowed us to  determine that the data were suitable for our purposes. We did not  independently verify the statements of interview respondents or the  statements in documents, such as models of care that were submitted by  D-SNPs.
Our analysis has several limitations. We limited our analysis to the   50 states and the District of Columbia. Although most of the analysis is  based on 2012, the demographic data are from 2011, and the health  status data are from 2010, the most recent years available. The contracts  between D-SNPs and state Medicaid agencies we reviewed are limited to  contracts submitted to CMS for 2012. Because only 40 percent of all  D-SNPs were required to submit contracts in that year, these contracts  may not represent the full range of possible D-SNP arrangements with  state Medicaid agencies. Additionally, because we judgmentally selected  the state Medicaid agencies and D-SNPs for our interviews, we cannot  generalize the findings from these interviews to all states and all D-SNPs.  We did not assess the quality of care provided by D-SNPs.
We conducted this performance audit from September 2011 through  September 2012 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform our  work to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our research objectives.  We believe that the evidence obtained provides a reasonable basis for  our findings and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Special Needs Plans
paragraphs: SNPs, including D-SNPs, have been reauthorized several times since  their establishment was first authorized in 2003. For example, the  Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)  and the Patient Protection and Affordable Care Act (PPACA) both  contained provisions reauthorizing and modifying SNPs. See table 1 for a  summary of legislation establishing and modifying SNPs.
In 2012, 322 D-SNPs are operating in 38 states and the District of  Columbia. CMS pays D-SNPs the same way that it pays other MA  plans; that is, a monthly amount determined by the plan bid—the plan’s  estimated cost of providing Medicare Part A and Part B benefits—in  relation to a benchmark, which is the maximum amount the Medicare  program will pay MA plans in a given locality. CMS then adjusts the  monthly payments to MA plans on the basis of beneficiaries’ risk scores.  If an MA plan’s bid exceeds the benchmark, the plan must charge each of  its beneficiaries an additional premium to make up the difference. If a  plan’s bid is less than the benchmark, a proportion of the difference is  returned to the plan as additional Medicare payments called rebates,  which must be used to reduce premiums, reduce cost sharing, or provide  mandatory supplemental benefits, such as vision and dental care.  Beginning in 2012, CMS has begun to phase in PPACA-mandated  modifications in the rebate amount and introduced varied rebate amounts   For 2012, rebates ranged  based on CMS’s assessments of plan quality.from 66.67 percent of the difference between a plan’s bid and benchmark  for plans with the lowest quality ratings to 73.33 percent of the difference  for plans with the highest quality ratings.
D-SNPs must meet the same requirements as other MA plans, such as  submitting an application to CMS. And like other MA plans, D-SNPs that  meet minimum enrollment requirements are also required to submit data,  such as the Health Effectiveness Data and Information Set (HEDIS)  quality measures. In addition, they must conduct quality improvement  activities, which include the reporting of certain structure and process  measures, such as describing how they manage medication reconciliation  associated with patient transitions between care settings.
CMS requires D-SNPs to develop a model of care that describes their  approach to caring for their target population. The model of care must  describe how the plan will address 11 clinical and nonclinical elements  established in CMS guidance: (1) describing the specific target  population, (2) tracking measurable goals, (3) describing the staff  structure and care management goals, (4) providing an interdisciplinary  care team, (5) establishing a provider network that has specialized  expertise and describing the use of clinical practice guidance and  protocols, (6) training plan employees and the provider network on the  model of care, (7) performing health risk assessment, (8) creating  individualized care plans, (9) establishing a communications network,   (10) providing care management for the most vulnerable subpopulations,  and (11) measuring plan performance and health outcomes. These  models of care are reviewed and approved by NCQA—a private health  care quality organization—on the basis of scoring criteria developed with  CMS that emphasized the inclusion of in-depth descriptions or case  studies. In their MA applications, D-SNPs must also “attest” that they  meet a total of 251 subelements related to the 11 elements in their model  of care.
New and expanding D-SNPs are required to contract with state Medicaid  agencies in 2012, and beginning in 2013, all D-SNPs will be required to  have contracts with state Medicaid agencies. According to CMS, the  contracts are an opportunity to improve the integration of Medicare and  Medicaid benefits, and the agency has implemented this requirement with  the goal of “increased integration and coordination” for dual-eligible  beneficiaries.
D-SNPs do not cover the same categories of dual-eligible beneficiaries,  but their chosen category(ies) must correspond to those under the  Medicaid program in the state in which the D-SNP is being offered. Dual- eligible beneficiaries fall into two main categories. One group, termed full- benefit dual-eligible beneficiaries, may receive the entire range of  Medicaid benefits, including long-term care. The other group, partial- benefit dual-eligible beneficiaries, does not receive Medicaid-covered  health care services, but Medicaid covers Medicare premiums or cost- sharing, or both, for these beneficiaries. Some D-SNPs limit enrollment to  full-benefit dual-eligible beneficiaries, while others are open to all dual- eligible beneficiaries. Additionally, some D-SNPs are open only to  disabled beneficiaries under age 65, whereas others are open only to  those aged 65 and over.
section_title: Other Initiatives for Care Coordination for Dual- Eligible Beneficiaries
paragraphs: Recently, the federal government, states, researchers, and advocates  have focused increased attention on care coordination for dual-eligible  beneficiaries. PPACA required HHS to establish the Federal Coordinated  Health Care Office (generally known as the Medicare-Medicaid  Coordination Office) within CMS to more-effectively integrate Medicare  and Medicaid benefits and to improve federal-state coordination for dual- eligible beneficiaries to ensure that they receive full access to the items   Experts believe that, in addition  and services to which they are entitled.to benefiting dual-eligible beneficiaries, more-effective benefit integration  and care coordination can generate significant savings by, for example,  lowering emergency room use.
The Medicare-Medicaid Coordination Office, working with the Center for  Medicare & Medicaid Innovation (called the Innovation Center), is  beginning a financial alignment initiative that is expected to enroll up to   2 million beneficiaries in 26 states and is intended to align Medicare and  Medicaid services and funding so as to reduce costs while improving  beneficiaries’ care. governments expect to realize savings from aligning the payments and  integrating care. Under existing coordination efforts, integrating benefits  requires an investment of resources from states to work with D-SNPs, or  other stakeholders, but according to experts most of the financial savings  accrue to Medicare, because most savings result from services that are  largely paid for by Medicare, such as reductions in the number or length  of hospital stays. Under the financial alignment initiative, savings will be  shared by Medicare and Medicaid without reference to whether the  savings are achieved in Medicare or Medicaid services, although the  allocation of these savings between Medicare and Medicaid has not yet  been finalized. Two models will be tested: a managed FFS model, under  which payments are adjusted retrospectively, and a capitated model  under which one payment is made to an MA plan under a three-way  contract among Medicare, the state Medicaid agency, and the plan.
In 2011, the Medicare-Medicaid Coordination Office, in partnership with the Innovation  Center, entered into contracts with 15 states for up to $1 million each to design state  demonstrations. Furthermore, in July 2011 CMS issued a letter calling for additional state  Medicaid agencies to submit letters of intent to participate in the demonstrations to better  align Medicare and Medicaid funding.
The initiative is being conducted under the demonstration authority of the  Innovation Center, under which the Secretary of HHS may conduct  evaluations that analyze both quality of care and changes in spending.  For purposes of testing models under this authority, budget neutrality— which would require that no more be spent under the demonstration than  is currently being spent on care for dual-eligible beneficiaries—does not  apply. The Secretary can expand the demonstrations nationwide if the  demonstrations are determined to reduce spending without reducing the  quality of care or improve the quality of care without increasing  spending.
The state demonstrations under the financial alignment initiative do not  necessarily include D-SNPs, and in some cases may replace D-SNPs. As  of June 2012, all 26 states had submitted their proposals for the  demonstrations. Decisions about implementation of these designs had  not been announced as of July 2012 yet implementation of these models  is expected to begin by January 2013 and continue into 2014.
section_title: Dual-Eligible Beneficiaries in D-SNPs Had Similar Health Status to Other Dual-Eligible Beneficiaries
paragraphs: The demographic and mental health characteristics of dual-eligible  beneficiaries enrolled in D-SNPs in 2011 differed from those of dual- eligible beneficiaries in other MA plans and, to a lesser extent, from those  of dual-eligible beneficiaries in FFS. Despite these differences, dual- eligible beneficiaries in D-SNPs and dual-eligible beneficiaries in FFS and  other MA plans had very similar health status in 2010, the year for which  the most recent data were available, as measured by Medicare risk  scores.
subsections: section_title: Dual-Eligible Beneficiaries in D-SNPs Had Characteristics That Were Generally Similar to Their FFS Counterparts but Differed in Key Respects from Such Beneficiaries in Other MA Plans
paragraphs: Dual-eligible beneficiaries in D-SNPs (9 percent of all dual-eligible  beneficiaries in 2011, as shown in fig. 1) were most similar to dual-eligible  beneficiaries in FFS, but differed substantially from dual-eligible  beneficiaries in other MA plans on certain demographic and mental health  measures.
A larger proportion of dual-eligible beneficiaries in D-SNPs, as well as  dual-eligible beneficiaries in FFS, were under age 65 and disabled in  2011 compared with those in other MA plans (see fig. 2). Additionally,  similar proportions of dual-eligible beneficiaries in D-SNPs and dual- eligible beneficiaries in FFS (15 and 16 percent, respectively) were  diagnosed with a chronic or disabling mental health condition such as  major depressive disorder or schizophrenia, compared with just   10 percent of dual-eligible beneficiaries in other MA plans. Among the  characteristics in our analysis, the largest difference between D-SNPs  and other MA plans was the proportion of full-benefit beneficiaries in each  plan type: 80 percent of dual-eligible beneficiaries in D-SNPs and   75 percent of dual-eligible beneficiaries in FFS were eligible for full  Medicaid benefits, compared with just 34 percent of dual-eligible  beneficiaries in other MA plans.
While dual-eligible beneficiaries in D-SNPs were generally similar to  those in FFS, there were several demographic measures on which dual- eligible beneficiaries in D-SNPs differed from both those in FFS and other  MA plans. A smaller proportion of dual-eligible beneficiaries in D-SNPs  lived in institutions (e.g., nursing facilities, intermediate care facilities, or  inpatient psychiatric hospitals) in July 2011 compared with dual-eligible  beneficiaries in FFS, and, to a lesser extent, other MA plans. D-SNPs  also enrolled a smaller proportion of dual-eligible beneficiaries who were  85 or older compared with the other plan types, as well as a larger  proportion of beneficiaries who were racial or ethnic minorities.
section_title: Health Status of Dual- Eligible Beneficiaries in D-SNPs Was Similar to That of Dual-Eligible Beneficiaries in FFS and Other MA Plans
paragraphs: Dual-eligible beneficiaries in D-SNPs had very similar health status as  measured by their 2010 risk scores, the year for which the most recent  data were available, when compared with dual-eligible beneficiaries in  FFS and other MA plans. As shown in figure 3, the average risk score— which predicts Medicare costs—of dual-eligible beneficiaries in D-SNPs  (1.29) was similar to the average scores for dual-eligible beneficiaries in  FFS (1.35) and other MA plans (1.34).eligible beneficiaries in D-SNPs and dual-eligible beneficiaries in FFS and  other MA plans were expected to cost Medicare at least twice as much as  the average Medicare FFS beneficiary, and less than 10 percent in each  plan type were expected to cost at least three times the average.
section_title: D-SNPs Typically Offer Fewer Supplemental Benefits Than Other MA Plans, and Information on Planned Services Is Not Comparable
paragraphs: Dual-eligible beneficiaries in D-SNPs do not necessarily get more benefits  than those in other MA plans, although D-SNP representatives told us  their care coordination services are more comprehensive than other MA  plans. D-SNPs and other MA plans varied in how frequently they offered  supplemental benefits—benefits not covered by FFS—and MA plans  offered more of these supplemental benefits than D-SNPs. While the  models of care we reviewed described in varying detail how the D-SNPs  plan to provide other services, such as health risk assessments, to  beneficiaries, most D-SNPs did not provide—and are not required to  provide—estimates of the number of dual-eligible beneficiaries that would  receive the services.
subsections: section_title: D-SNPs Offered Fewer of Their 10 Most-Common Supplemental Benefits Than Other MA Plans
paragraphs: D-SNPs provide fewer supplemental benefits, on average, than other MA  plans. Of the 10 supplemental benefits offered by more than half of  D-SNPs, 7 were offered more frequently by other MA plans and 3 were  offered more frequently by D-SNPs.benefits were offered much more frequently by D-SNPs compared to  other MA plans: they offered dental benefits one-and-a-half times more   (See fig. 4.) These 3 supplemental  often, over-the-counter drugs nearly twice as often, and transportation  benefits almost three times more often. However, a smaller proportion of  D-SNPs compared to other MA plans offered hearing benefits, as well as  benefits for certain inpatient settings and outpatient services. For some of  the services D-SNPs offered less frequently, dual-eligible beneficiaries  may receive some coverage through Medicaid. In addition, according to  CMS, some of the benefits offered more frequently by other MA plans  (e.g. international outpatient emergency) are not necessarily as useful a  benefit for D-SNPs.
For the three most-common D-SNP supplemental benefits—vision,  prevention, and dental—we analyzed the individual services covered  under these benefits and found that D-SNPs’ vision and dental benefits  were generally more comprehensive than those offered by other MA  plans. For example, in their vision benefit, a larger proportion of D-SNPs  compared to other MA plans covered contact lenses and eyeglasses. In  addition, a larger proportion of D-SNPs compared to other MA plans  included in their dental benefit coverage of oral surgery, extractions, and  restorative services. However, D-SNPs were less likely than other MA  plans to include membership in health clubs as part of their preventive  health care benefits.
Despite offering these supplemental benefits somewhat less often than  other MA plans, D-SNPs allocated a larger percentage of their rebates to  supplemental benefits than other MA plans. (See table 2.) They were able  to do so largely because they allocated a smaller percentage of rebates  to reducing cost-sharing. Most dual-eligible beneficiaries will have their  cost-sharing covered by Medicaid, so D-SNPs have less need than other  MA plans to cover cost-sharing. We also found that D-SNPs tended to  receive smaller rebates than other MA plans ($70 per member per month  on average compared to $108).
Although the 15 models of care we reviewed described the types of  services D-SNPs intended to provide, D-SNPs generally did not state in  their models of care how many of their enrolled beneficiaries were  expected to receive these services. The criteria D-SNPs are evaluated on  in the approval process emphasize the inclusion of in-depth descriptions  and case studies rather than details about how many beneficiaries would  likely receive these services, for example, the number of beneficiaries  that will use additional services targeted to the most vulnerable. CMS  does not require D-SNPs to report that information in the models of care,  although such information could be useful for future evaluations of  whether D-SNPs met their intended goals, as well as for comparisons  among D-SNPs.specificity in the model-of-care scoring criteria confused some D-SNPs;  having more specific scoring criteria may also eliminate some uncertainty  in the approval process.
Three D-SNPs we interviewed told us that a lack of  Knowing the extent of the special services D-SNPs expect to provide  would assist future evaluations of whether they met their goals, but most  models of care did not include this information. For example, all 15  D-SNPs stated in their models of care that they planned to conduct health  risk assessments for beneficiaries within 90 days of enrollment and an  annual reassessment, as they are required to do by CMS. However, only  4 provided information on how many members had actually completed a  health risk assessment or reassessment in prior years, with cited  completion rates for 2010 ranging from 52 to 98 percent. In addition, none  of the D-SNPs we reviewed indicated in their models of care how many  beneficiaries were expected to receive add-on services such as social  support services that were intended for the most-vulnerable beneficiaries.  The models of care we reviewed did include, as required in the model-of- care scoring criteria, information about how the D-SNP identifies the most  vulnerable beneficiaries in the plan and the add-on services and benefits  that would be delivered to these beneficiaries. D-SNPs’ models of care  described a variety of methods used to identify these beneficiaries: health  risk assessments (10 D-SNPs); provider referrals (9); and hospital  admissions or discharges (7). However, the models of care generally did  not indicate how many or what proportion of beneficiaries were expected  to be among the most vulnerable, although one D-SNP’s model of care  stated that complex-care patients constituted over one-third of its  membership. Furthermore, it was sometimes unclear whether the  services described as targeted to these beneficiaries were in addition to  those available to all dual-eligible beneficiaries in the D-SNP. D-SNPs  also described the services that they plan to offer to the most-vulnerable  beneficiaries, the most frequent being complex/intensive case  management (6 D-SNPs). Other services D-SNPs planned to offer the  most-vulnerable beneficiaries included 24-hour hotlines, social support  services, and supplemental benefits beyond what was planned to be  offered to all dual-eligible beneficiaries in the D-SNP.
CMS guidance also requires D-SNPs to describe how they intend to  evaluate their performance and measure outcomes in achieving goals  identified in their models of care, but CMS does not stipulate the use of  standard outcome or performance measures in the model of care, such  as measures of patient health status and cognitive functioning. As a  result, it would be difficult for CMS to use any data it might collect on  these measures to compare D-SNPs’ effectiveness or evaluate how well  they have done in meeting their goals. Furthermore, without standard  measures, it would not be possible for CMS to fully evaluate the relative  performance of D-SNP models of care. While it is not required, an  evaluation of D-SNPs could both help to improve the D-SNP program and  inform other initiatives to better coordinate care for dual-eligible  beneficiaries. The models of care we reviewed had little uniformity in the  measures plans selected. Four D-SNPs discussed their approach to  performance and health outcome measurement largely in general terms,  such as describing which datasets they would use or the categories of  outcomes that would be measured. The other 11 D-SNPs provided  specific measurements, which included measuring items such as  readmissions, emergency room utilization, and receipt of follow-up calls  after inpatient stays. Were CMS to move to a standard set of performance  and outcome measures, it could be less burdensome and no more costly  than what some D-SNPs currently collect. Using standard measures  could also streamline the models-of-care review process.
section_title: D-SNPs Reported More- Comprehensive Care Coordination Services and Greater Beneficiary Interaction Than Other MA Plans
paragraphs: Of the 15 D-SNPs we interviewed, 9 were in organizations that offered  both D-SNPs and other MA plans, and representatives from 7 of those  D-SNPs told us that their care coordination services are different from  those in their organization’s other MA plan offerings. For example, a  representative from one D-SNP told us that while care coordination and  case management were available in both types of plans offered by that  organization, dual-eligible beneficiaries in the D-SNP are continuously  enrolled in case management, whereas dual-eligible beneficiaries in other  MA plans who need these services receive them for only a limited time. A  representative from another D-SNP said that the plan provides care  coordination services similar to those of other MA plans offered by its  organization but that dual-eligible beneficiaries in the D-SNP who need  these services are identified faster than are dual-eligible beneficiaries in  the other MA plans. A representative of a third D-SNP said it has a  community resource unit that is not available in other MA plans offered by  its organization, which works with local agencies such as long-term care  providers and adult protective services.
Multiple representatives of the 15 D-SNPs we interviewed described their  care coordination services as being “high touch”—meaning that the plans,  particularly the case managers, have frequent interaction with dual- eligible beneficiaries in the D-SNP. For example, representatives from  one D-SNP told us that its plan includes in-person meetings with case  managers. Representatives from another D-SNP described several  specific examples of care coordination successes, such as when a case  manager followed up on a beneficiary’s Medicaid reenrollment application  to ensure that the beneficiary did not lose eligibility, and another situation  in which a case manager worked with the complex social and housing  needs of a beneficiary who had both physical and mental health issues.  Representatives from a third D-SNP noted that they have providers who  conduct home visits to help prevent hospitalization.
section_title: Although Some D-SNP Contracts with State Medicaid Agencies Expressly Provide for Benefit Integration or Care Coordination, Most Do Not
paragraphs: CMS stated that contracts between D-SNPs and state Medicaid agencies are an opportunity to increase benefit integration and care coordination.However, only about one-third of the 2012 contracts we reviewed  contained any provisions expressly providing for D-SNPs to deliver  Medicaid benefits, thereby achieving benefit integration. Only about one- fifth of the contracts expressly provided for active care coordination  between D-SNPs and Medicaid agencies, which indicates that most care  coordination was done exclusively by D-SNPs, without any involvement of  state Medicaid agencies. Further, D-SNP representatives and state  Medicaid officials expressed concerns about resources needed to  contract with D-SNPs, and uncertainty about the future of D-SNPs.
subsections: section_title: Some Contracts Include Provisions to Address the Integration of Benefits or Meaningful Coordination of Services between D-SNPs and Medicaid Agencies, but Most Do Not
subsections: section_title: Benefit Integration
paragraphs: The 2012 D-SNP contracts with state Medicaid agencies we reviewed  varied considerably in their provisions for integration of benefits and state  payments to D-SNPs for covering specific services. According to CMS,  “his variability is to be expected, as States and MA organizations can  develop agreements for  to assume responsibility for providing  or arranging for a wide range of Medicaid services based on each State’s  ability and interest in integrating its Medicaid program with Medicare via a  SNP.” Thirty-three percent of the 124 D-SNP contracts with state  Medicaid agencies for 2012 that we reviewed expressly provided for the  delivery of at least some portion of Medicaid benefits, thereby integrating  Medicare and Medicaid benefits. The contracts varied in the extent of the  Medicaid benefits for which a plan was responsible. About 10 percent  provided a limited number of Medicaid services, such as dental or vision  benefits. In contracts where there was some integration of Medicare and  Medicaid benefits, states contracted for the different services, making  comparisons among the contracts difficult. Of the 23 percent that  integrated most or all Medicaid benefits, 64 percent of D-SNPs provided  all Medicaid benefits, including long-term care support services in  community settings and institutional care; 25 percent provided most  Medicaid benefits, including long-term support services in community  settings but not institutional care; and 11 percent provided most Medicaid  benefits but did not provide any long-term support services or institutional  care. (See fig. 5.)
Sixty-seven percent of contracts between D-SNPs and state Medicaid  agencies did not expressly provide for D-SNPs to cover Medicaid  benefits. To carry out MIPPA’s requirement that each D-SNP contract  provide or arrange for Medicaid benefits to be provided, CMS guidance  has required that contracts list the Medicaid benefits that dual-eligible  beneficiaries could receive directly from the state Medicaid agency or the  state’s Medicaid managed care contractor(s).
For D-SNPs contracting with state Medicaid agencies to provide all or  some Medicaid benefits, the capitated payment reflected variation in  coverage and conditions. One state that contracts for all Medicaid  benefits except a limited number of services including long-term care  services paid the D-SNP at a rate of $423 per member per month.  Another state, which contracted for a limited number of benefits, including  Medicare-excluded drugs, expanded dental coverage, and case- management services, paid the D-SNP $132 per member per month. This  state’s Medicaid agency retained responsibility for inpatient hospital  services and long-term care coverage. Some contracts, rather than  stating a single capitation rate, gave payment rates for different  categories, including risk or acuity level, beneficiary age, and service  location, as well as whether the beneficiary was designated as nursing  home eligible and whether services for these beneficiaries were provided  in the community or facility setting. Within one state, payment rates  ranged from just under $170 per month for dual-eligible beneficiaries who  were neither nursing home eligible nor had a chronic mental health  condition and were living in the community to over $8,600 per month for  dual-eligible beneficiaries residing in a nursing facility and requiring the  highest level of care.
Some of the 2012 contracts providing for payments from state Medicaid  agencies to D-SNPs did not address the direct provision of benefits, often  providing for payments to the D-SNP for assuming the state’s  responsibility for paying dual-eligible beneficiaries’ Medicare copayments,  coinsurance, and deductibles. These payments ranged from $10 to $60  per member per month.
While all contracts between D-SNPs and state Medicaid agencies for  2012 provided for some level of care coordination to beneficiaries,  approximately 19 percent expressly provided for active coordination of  beneficiary services between the D-SNP and the state Medicaid  agency. Most active coordination occurs when dual-eligible beneficiaries  transition between care settings or between Medicare and Medicaid.  Thirteen percent of all contracts contained provisions requiring D-SNPs  and the state Medicaid agency to coordinate the transition of beneficiaries  between care settings (such as hospital to nursing home) within a given  time frame. For example, one state’s D-SNP contracts directed the plans  to notify the Medicaid service coordinators or agency caseworker, as  applicable, no later than 5 business days after a dual-eligible beneficiary  had been admitted to a nursing facility. The other 6 percent of contracts  included provisions for providing different coordination activities such as  requiring the plan to work with Medicaid staff to coordinate delivery of  wrap-around Medicaid benefits.
The remaining 81 percent of all contracts did not specifically address  D-SNPs’ coordination with state Medicaid staff, such as case managers.  Rather, these contracts indicated that the D-SNP would coordinate  Medicaid and Medicare services but did not specify the role of the state  Medicaid agency in coordinating those services. Because D-SNPs are  required by Medicare to provide care coordination services to dual-eligible  beneficiaries, these services are often provided without reimbursement or  payment from the state Medicaid agency.
section_title: D-SNP and State Officials Expressed Some Concerns about Contracting
subsections: section_title: Concerns about Resource Investment
paragraphs: D-SNP representatives and state Medicaid officials we spoke with  reported that contract development and submission to CMS are resource- intensive. State officials reported that because they had limited resources,  they needed to balance the benefits of the contract with the time and  resources needed to develop and oversee it. As one state Medicaid  official said, the state “bandwidth”—resources—was a challenge, and she  was concerned about contracting with the large number of D-SNPs in her  state. This official added that the state did not want to be in the position of  making contractual commitments that could not be honored because of  limited funds or other resources. In contrast, the plan representatives we  interviewed expressed interest in continuing to operate D-SNPs and were  therefore eager to contract with states despite any challenges that might  exist. Beginning in 2013, D-SNPs will not be permitted to operate without  state contracts.
Representatives from 12 of the 15 plans and officials from 3 of the 5 state  Medicaid agencies we spoke with pointed out that establishing a contract  between Medicaid and a Medicare plan highlights conflicts between  federal and state requirements. A representative from one D-SNP told us  that it was challenging for plans and state Medicaid agencies to agree  about the characterization of dual-eligible beneficiaries because Medicare  and some states have different definitions. Officials from one state  Medicaid agency and D-SNP representatives reported difficulty  reconciling the difference between the Medicare contracting cycle, which  is based on the calendar year, and the fiscal year contracting cycle for  their states. They reported that, if a contract would not cover the entire  calendar year, CMS would not approve it. In one case, a state Medicaid  official reported that CMS’s deadline of July 1, 2012, for 2013 contracts  would occur before the state signed contracts for 2013. Sometimes non- Medicaid structures conflict with CMS’s contracting requirements for  D-SNPs. A representative of one D-SNP told us that Medicaid benefits for  individuals with developmental disabilities were managed through a  contract with the state’s family services agency, not the state Medicaid  agency. Therefore, to provide services to this population, the D-SNP had  to become a subcontractor to the family services agency. The official said  that the D-SNP and the state need to work with CMS to develop a  subcontracting relationship that is acceptable. State Medicaid officials  and D-SNP representatives reported that they did not always have the  resources or the administrative ability to resolve these types of issues  before entering into a contract.
Beginning in 2013, D-SNPs must secure a contract with the state  Medicaid agency in each state in their service area. To do this, D-SNPs  may need to establish new relationships with state officials who,  according to the D-SNP representatives we interviewed, sometimes have  very limited knowledge of Medicare and its requirements. However, some  states have experience with Medicaid managed care and in some cases,  D-SNP representatives had previously worked with the state on Medicaid  contracts, thereby somewhat easing the transition to working with  D-SNPs.
Plan representatives and state Medicaid officials told us that uncertainty  about the future made them cautious in contracting. Authority for SNPs to  restrict enrollment to special needs populations (such as dual-eligible  beneficiaries) currently expires at the end of 2013; SNPs may not  continue as a unique type of MA plan if Congress does not extend this  authority. Were this to occur, states would lose any advantages they  might have gained from investing their resources to work with D-SNPs to  integrate benefits and coordinate care. Furthermore, uncertainty  regarding the future of D-SNPs creates uncertainty for the states about  how to continue to serve dual-eligible beneficiaries currently enrolled in  D-SNPs.
Uncertainty about the implementation of state demonstrations under the  CMS initiative to align Medicare and Medicaid services—financial  alignment initiative—has made some states hesitant to enter into  contracts with D-SNPs. As of June 2012, all proposals had been made  available for public comment but CMS had not finalized agreements with  the states. Medicaid officials from two states told us that if their proposed  financial alignment demonstrations were implemented, D-SNPs in their  states would cease to exist. Some states were moving forward with  D-SNP contracts while concurrently preparing to shift D-SNPs to a  different type of managed care plan if their demonstration proposal is  implemented. However, officials from one state told us that they did not  have sufficient clarity about the direction of the state Medicaid program in  relation to its proposed demonstration to enter into contracts. Even in  those states where demonstrations would not eliminate D-SNPs,  contracting challenges as well as potential financial incentives associated  with the demonstrations from the financial alignment initiatives create  disincentives for states to work with D-SNPs outside of the financial  alignment initiatives and, therefore, leaves the future of D-SNPs in  question in these states as well.
section_title: Conclusions
paragraphs: D-SNPs have the potential to help beneficiaries who are eligible for both  Medicare and Medicaid navigate these two different systems and receive  the health services that meet their individual needs. However, CMS has  not required D-SNPs to report information that is critical to better holding  plans accountable and determining whether they have realized their  potential. Although the models of care D-SNPs must submit to CMS  generally state what these plans intend to do, they do not all report the  number of services they intend to provide. For example, plans are not  required to report the number of enrollees they expect to designate as  most vulnerable, or how many and which additional services they will  provide to these enrollees. Although D-SNPs are required to collect  performance and outcome measures, they are not required to use  standard measures such as existing measures of hospital readmission or  patient health status and cognitive functioning. Further they are not  required to report these measures to CMS, and, lacking standard  measures, it would in any case be difficult to compare D-SNPs’  effectiveness. Standardizing these measures should have a minimal  effect on D-SNPs’ administrative efforts, because additional measures  could replace some or all of the measures currently used as well as much  of the narrative in models of care. Standardizing measures could also  reduce CMS’s administrative efforts by streamlining review of D-SNPs.  Additional standardized information would allow CMS to meet its goals for  accountability for effective and efficient use of resources.
Further, CMS has neither evaluated the sufficiency and appropriateness  of the care that D-SNPs provide nor assessed their effectiveness in  integrating benefits and coordinating care for dual-eligible beneficiaries.  Nonetheless, CMS is embarking on a new demonstration in up to 26  states with as many as 2 million beneficiaries to financially realign  Medicare and Medicaid services so as to serve dual-eligible beneficiaries  more effectively. If CMS systematically evaluates D-SNP performance, it  can use information from the evaluation to inform the implementation and  reporting requirements of this major new initiative.
section_title: Recommendations for Executive Action
paragraphs: To increase D-SNPs’ accountability and ensure that CMS has the  information it needs to determine whether D-SNPs are providing the  services needed by dual-eligible beneficiaries, especially those who are  most vulnerable, the Administrator of CMS should take the following four  actions:  require D-SNPs to state explicitly in their models of care the extent of  services they expect to provide, to increase accountability and to  facilitate evaluation;  require D-SNPs to collect and report to CMS standard performance  and outcome measures to be outlined in their models of care that are  relevant to the population they serve, including measures of  beneficiary health risk, beneficiary vulnerability, and plan  performance;  systematically analyze these data and make the results routinely  available to the public; and  conduct an evaluation of the extent to which D-SNPs have provided  sufficient and appropriate care to the population they serve, and  report the results in a timely manner.
section_title: Agency and Other External Comments and Our Evaluation
paragraphs: We obtained comments on a draft of this report from HHS and the SNP  Alliance, which represents 32 companies that offer more than 200 SNPs.  CMS provided written comments, which are reprinted in appendix I, and  technical comments that we incorporated where appropriate.  Representatives from the SNP Alliance provided us with oral comments.
subsections: section_title: HHS Comments
paragraphs: HHS concurred with our recommendation that CMS should require plans  to explicitly state in their models of care the extent of services they expect  to provide, and agrees that information about the extent to which D-SNPs  provide certain services would increase accountability and facilitate  evaluation. HHS also stated that CMS recently began to collect  information on the completion of health risk assessments, but has not  made it public because the information is relatively new. HHS did  question the usefulness of quantifying the number of members expected  to receive services described in the documents, stating that the model of  care is a framework for indicating how the SNP proposes to coordinate  the care of SNP enrollees. However, as we noted in the draft report, we  believe such information could be useful in later evaluating whether   D-SNPs met their intended goals.
HHS also concurred with our recommendation that CMS should require  D-SNPs to collect and report standard measures relevant to the  populations they serve, and stated that CMS is working to create new  measures that will be relevant to dual-eligible beneficiaries in D-SNPs.  HHS also stated that CMS currently collects a broad range of standard  quality measures, including HEDIS, as well as structure and process  measures. HHS included in its response a recent Health Plan System  Management memorandum that CMS sent to MA organizations, including  D-SNPs, which outlined updated reporting requirements for 2013. HHS  also noted that in addition to the data it currently collects, CMS requires  D-SNPs to conduct both a Quality Improvement Project and a Chronic  Care Improvement Project, and asked GAO to note this in the final report.  We did not include these because, as we noted in the draft report, quality  and quality measures were not in the scope of our work.
HHS also concurred with our other two recommendations.
section_title: SNP Alliance Comments
paragraphs: First, SNP Alliance representatives stated that the benefits D-SNPs  provide most frequently are more meaningful to dual-eligible beneficiaries  than some of the supplemental benefits provided more frequently by other  MA plans. We note in the report that some of the supplemental benefits  offered at lower rates by D-SNPs may be covered by Medicaid, thereby  reducing the need for them to be covered by D-SNPs. Second, SNP  Alliance representatives were concerned with our definition of FIDESNPs.  They explained that CMS’s definition, which we used, limits FIDESNPs to  those that integrate all Medicare and Medicaid benefits without any limits,  such as the number of nursing home days covered. They contended that  some D-SNPs may be considered fully integrated even though they do  not include all benefits, such as nursing home care, and may have some  limits. However, in reporting on CMS activities we have no basis for using  different definitions than those formally applied by the agency. Third, SNP  Alliance representatives stated that the ability of their D-SNP members to  fully integrate benefits through contracting is limited by the capacity and  interest of state Medicaid agencies. We note in the report that state  Medicaid agencies we interviewed acknowledged limitations in their  capacity for contracting. Fourth, SNP Alliance representatives had some  concern with our emphasis on estimating how many beneficiaries are  expected to receive the services described in the model of care, stating  that all dual-eligible beneficiaries would have access to the services  described based on need. However, as we stated in the draft report,  information is not generally available on the number of beneficiaries that  use these benefits. Finally, SNP Alliance representatives were supportive  of the state demonstrations under the financial alignment initiative. They  noted that D-SNPs are being used as a platform for half of the state  demonstrations, with the remainder being based on a Medicaid model.  They considered the adoption of the D-SNP model by many of the state  demonstrations as evidence of D-SNPs’ success.
SNP Alliance representatives generally agreed with our  recommendations. They said that they support better aligning reporting  requirements with the models of care, and stated that D-SNPs need a set  of core measures that are most relevant to the dual-eligible population  they serve.
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If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or CosgroveJ@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix II.
section_title: Appendix I: Comments from the Department of Health & Human Services
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Phyllis Thorburn, Assistant  Director; Ramsey Asaly; George Bogart; Melanie Anne Egorin; Linda  Galib; Giselle Hicks; Corissa Kiyan; Elizabeth T. Morrison; and Kristal  Vardaman made key contributions to this report.