This is the third and final part of my interview with Marsha Gold of Mathematica Policy Research.
It is my understanding that dual eligible Special Needs Plans (SNPs) do not include capitation for Medicaid costs. Is this correct? Are there likely to be movements in this direction?
Yes, you are right. The SNP contract is between Medicare and the Medicare Advantage plan operating the SNP. The payments cover only Medicare benefits, though SNPs must account for any savings they may have over and above the payments for providing such benefits and use them to enrich benefits (or reduce costs) for enrollees. Though some SNPs have contracts with state Medicaid agencies that cover Medicaid benefits for these enrollees, most do not. Instead, state Medicaid agencies pay Medicaid’s share of Medicare benefits and other Medicaid benefits (like long-term care) separately, usually on a fee-for-service basis. Plans seeking to pair a Medicaid capitated contract with an SNP contract face obstacles because the two programs do not necessary apply the same requirements to managed-care entities.
This may change in the future but probably not quickly and not in all states. The Medicare Improvements for Patients and Providers Act of 2008 requires all SNPs to submit models of care but requires only new SNPs to contract with state Medicaid programs. Also, there is no parallel requirement that Medicaid agencies contract with SNPs. Contracting is complicated because state Medicaid agencies have little “skin in the game” now in paying for Medicare’s acute care benefits and face many challenges in contracting for other benefits that are financially relevant to them (like long-term care). The Affordable Care Act requires all dual eligible SNPs to contract with state agencies by 2013, though it does not require states to contract with any or all of them nor do such contracts have to include Medicaid payments. The Affordable Care Act also allows a frailty adjustment to Medicare rates of dual eligible SNPs that are “fully integrated” (that is, have a Medicaid capitation contract that covers benefits including long-term care as well as an SNP contract).
How likely is it that new regulations to enhance coordination between Medicare and Medicaid will work?
I’m hopeful that the new federal initiatives will support progress by states that have long sought to better integrate care for dual eligibles and by other states that seek to follow their lead. However, I think that coordination can’t be attained by simply legislating it, it must be achieved by hard work on the ground and a commitment to better care for the people who are dually eligible for Medicare and Medicaid. I have some concerns that the current budget climate will lead to unrealistic expectations about the pace of change or the extent of savings to be achieved, thus undercutting the potential to make real improvements for the people covered under these programs.
Yes. As these issues are debated, it’s important to avoid thinking of integration strategies as “one size fits all.” The dual eligible population is highly diverse in ways that are likely to require different models of care and different uses of Medicare and Medicaid benefits. The same strategies may not work for subgroups of dual eligibles who need different kinds of care, particularly in terms of the services that Medicaid covers or that are provided in communities. Care for dual eligibles is likely to require a variety of models and considerable flexibility in adapting them across the states. Creative development, evaluation, and sharing of models will be of great value. The real policy challenge is to encourage such innovation while maintaining appropriate beneficiary protections and national oversight over the use of federal funds in both Medicare and Medicaid.
 Medicare Payment Advisory Commission. “Chapter 5. Coordinating Care for Dual Eligibles.” In Report to the Congress: Medicare and the Health Care Delivery System. Washington, DC: MedPAC, June 2011.
 Melanie Bella and Lindsay Palmer. “Encouraging Integrated Care for Dual Eligibles” Resource Paper. Princeton, NJ: Center for Health Care Strategies, July 2009.