CMS to Sunset Look-Alike Dual-Eligible Special Needs Plans in 2023

The U.S. Centers for Medicare & Medicaid Services (CMS) in 2023 will phase out dual-eligibility special needs look-alike plans within Medicare Advantage. Some hospice patients rely on these plans for other health needs, such as nursing home costs.

Close to 12 million people in the United States qualify for both Medicare and Medicaid. Of those, about 3.8 million are enrolled in dual-eligibility special needs plans (D-SNPs), according to CMS. A portion of these beneficiaries are not seniors. Many become eligible due to disability. Generally, these are individuals with multiple debilitating conditions who have low incomes and high health care costs.

Though D-SNPs have existed in one form or another since 2003, Congress made the programs permanent through the Bipartisan Budget Act of 2018. These plans currently operate in 45 states and the District of Columbia, CMS has indicated.

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In recent years, Medicare Advantage organizations have created “look-alike” D-SNPs, which adapt that model. The details of these plans differ from state to state, but typically the look-alikes are not subject to the same degree of regulation as a formal D-SNP. This has raised concern among some stakeholders.

“The federal government looked at [look-alike D-SNPs], and they said, ‘You’re attracting a high need population, but not providing a model of care that supports them,’” Eve Gelb, senior vice president of duals at SCAN Health Plan, told Hospice News. “So at the end of this year these D-SNP look-alikes — which basically means they serve more than 50% dually eligible but are not an actual special needs plan — are going away.”

The look-alikes tend to be less integrated than formal D-SNPs, do not require the same degree of coordination between the patient’s Medicare and Medicaid benefits, and most are not required to enter contracts with state agencies, according to an issue brief from the senior advocacy group Justice in Aging.

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While hospice patients transition to the Medicare benefit for their end-of-life care, some may continue to need their dual-eligibility coverage to address issues that are technically outside the scope of their terminal diagnosis.

This can include payment for long-term care or some services provided in assisted living facilities.

“In theory, nothing should have happened to that person’s hospice coverage, because it’s covered by Medicare. When somebody is on hospice and a member of our plan, the plan is responsible for the non-hospice diagnosis,” Gelb said. “If somebody was institutionalized in a skilled nursing facility or a nursing home for custodial, non-medical care, Medicaid will continue to pay for that particular coverage that is not covered by Medicare.”

Private residences are the most frequently occurring location of care for hospice patients, with nursing homes coming in second followed by assisted living facilities, according to the National Hospice and Palliative Care Organization (NHPCO).

Patients in nursing homes on average were in hospice for 109 days of care in 2019, compared to 95 days among those receiving services in a private residence and 161 days in assisted living, NHPCO reported.

The sunsetting of the look-alike D-SNPs will require some retooling by Medicare Advantage organizations to ensure beneficiaries are transitioned to a different plan without interruptions in their coverage, Gelb told Hospice News.

“Medicare rarely does this, where they’ve said that a certain kind of plan has to go away. Medicare is working with each of the plans to transition the membership to an appropriate plan that that same company runs,” Gelb said. “So in October, each of the organizations that has one of these look-alikes will work with Medicare to map each individual member to an appropriate product.”

CMS rules require plans to only map people to products that have zero premiums so that the dually eligible patient will not have to pay anything to belong to that plan, according to Gelb.

This mapping process is likely to be painstaking due in part to the complexity of D-SNP programs and the associated regulations.

For example, some of these beneficiaries are considered “partially dual-eligible.” These patients typically cannot enroll in a D-SNP, though variations do exist among the requirements in different states.

Also, many state Medicaid programs will not cover long term care for partially dual-eligible patients, and zero-premium plans are not always available in every county nationwide.

“For SCAN it limits to a certain extent how we can serve dual populations because of the processes in the state of California. We have a kind of D-SNP that is fully integrated, providing all Medicare and Medicaid benefits. And we are the only one in the state of California that does that,” Gelb said. “But because we have certain eligibility criteria for that product — and because we’re not in all of the counties, different rules apply that might prohibit us from being in a certain geography.”

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