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Special Needs Plans Push to Get Moratorium Lifted

By Mary Agnes Carey, CQ HealthBeat Associate Editor

April 24, 2008 -- Facing criticism that they have not yet proven their worth in the Medicare prescription drug program, sponsors of so-called special needs plans said Thursday they are willing to give Congress more data to show how they provide additional services to beneficiaries with severe chronic medical conditions.

"I don't think you can set the bar high enough for us," John Mach, chief executive officer of Evercare, a special needs plan based in Minneapolis, said at a Capitol Hill briefing. Robb Cohen, chief government affairs officer for XL Health, based in Baltimore, concurred. "The industry at large absolutely supports that requirement," he said.

Medicare special needs plans were added to the private health plan side of Medicare under the 2003 Medicare overhaul law (PL 108-173) and account for much of the surge in overall Medicare Advantage enrollment since then. Created to improve the quality and efficiency of care for Medicare's sickest and poorest enrollees, the plans haven't convinced some policy analysts that they are developing real expertise in managing care for Medicare's neediest enrollees in spite of the higher payment rates they receive.

In Medicare legislation (S 2499) President Bush signed into law in December, the plans, also known as SNPs, face a moratorium. The agreement bars the plans from expanding their service areas through Dec. 31, 2009, and prevents new special needs plans from entering the program until that time. As of 2007, more than 470 SNPs were operating in the Medicare program, serving more than one million enrollees, and more than 760 SNPs will be available in 2008, according to the Centers for Medicare and Medicaid Services. Proponents of special needs plans are hoping to get those restrictions lifted in Medicare legislation now being developed on Capitol Hill.

The plans serve "dual eligibles"—Medicare beneficiaries who qualify for both Medicare and Medicaid—Medicare beneficiaries with severe or disabling chronic conditions, and Medicare beneficiaries who live in nursing homes and other long-term care settings. Additional services the plans provide include dental and vision and benefits, reduced cost-sharing for prescription drugs, tailored case management, and other specialized services, according to America's Health Insurance Plans, a trade group representing health insurers.

At its December meeting, the Medicare Payment Advisory Commission approved several recommendations regarding SNPs, including that Congress extend the authority to limit SNP enrollment, now set to expire in December 2008, and that Congress should require the secretary of the Department of Health and Human Services to establish additional tailored performance measures for the plans and evaluate their performance on those measures every three years.

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