More than 12 million Americans qualify for both Medicare and Medicaid. They are among the poorest and sickest people in our country. This dual eligibility — based on age, disability, and income — creates a bureaucratic challenge and increases the risk that beneficiaries will receive fragmented and poorly coordinated care.

Policymakers have attempted to improve coordination and integration of care by establishing the Dual-Eligible Special Needs Plan (D-SNP) within the Medicare Advantage managed care program. A new perspective in the Journal of General Internal Medicine, by Arielle Elmaleh-Sachs, M.D., of Massachusetts General Hospital and the Commonwealth Fund’s Eric C. Schneider, M.D., looks at these plans’ potential to coordinate care, improve health outcomes, and reduce costs.

More than 20% Proportion of Medicare-Medicaid beneficiaries enrolled in managed care Dual-Eligible Special Needs Plans nationwide

Efforts to Coordinate and Integrate Medicare and Medicaid

Managed care plans. Nationally, most dual-eligible beneficiaries are in some type of managed care, with plans varying by population. Most common are D-SNPs, which enroll more than 20 percent of dual-eligibles nationwide. In 2008, federal law required D-SNPs to contract with states to better coordinate Medicaid benefits. Some states offer a D-SNP with a Managed Long-Term Services and Supports program — a capitated managed care alternative for long-term care.

Aligning incentives. To better integrate Medicare and Medicaid for the dually eligible population, the Centers for Medicare and Medicaid Services has sought to align payment incentives. In 2010, the Affordable Care Act authorized Fully Integrated Dual-Eligible Special Needs Plans (FIDE SNPs), but they are not yet widespread. These plans are designed to receive Medicare and Medicaid payments for the same beneficiary and combine them under one budget administered by a managed care organization.

Improving Quality and Reducing Costs

There have been few evaluations of the effects of D-SNPs on quality and health outcomes. One study of a model administered by FIDE SNPs in Minnesota found decreased hospitalizations and emergency department use. An evaluation of dual-eligibles in Oregon with aligned Medicare Advantage and Medicaid managed care plans found a reduction in hospital utilization, an increase in primary care visits, and a greater likelihood of screening for conditions like diabetes and high cholesterol.

Overall, evaluations suggest that effective care coordination should focus on transitions in care, information technology, data reporting and information sharing, caregiver participation, and social determinants of health.

Looking Ahead

Variation among special needs plans for dual-eligibles has made evaluation challenging. Identifying and implementing plans’ best features, the authors say, could “enable some of the very sickest Americans to receive the highest quality health care at a price the nation can afford.”