Next Steps for Some Beneficiaries In Medicare Special Needs Plans

An estimated 50,000[1] Medicare beneficiaries who are currently enrolled in Medicare Advantage "Special Needs Plans" (SNPs) but who do not meet the definition of a special needs individual for purposes of their plan will be disenrolled from those plans effective December 31, 2011.

Before the end of September 2011, each such beneficiary will receive a notice from the plan with this information as well as information about other options available to the individual.  Individuals affected by this change will have an extended enrollment period from December 8, 2011 through February 29, 2012.  This extended enrollment period does not apply to individuals who enrolled in the SNP after January 1, 2010.

Background

The Medicare Modernization Act of 2003 (MMA) authorized the creation of new Medicare Advantage plans for individuals with certain special needs.[2]  Three types of plans were authorized:  those serving institutionalized individuals (I-SNPs), those serving individuals dually-enrolled in Medicare and Medicaid (D-SNPs) and those with certain severe and disabling chronic conditions (C-SNPs).  The plans were initially authorized to exist with such focused enrollment through December 2008; such authority has been extended several times, most recently by health care reform – the Affordable Care Act (ACA) – through December 2013.[3]

The initial authority for SNPs allowed them to enroll, either exclusively or disproportionately, those individuals with the special needs for whom the plan was designed.  A disproportionate SNP had to enroll a greater percentage of the special needs population than occur nationally in the Medicare population.[4]  According to a recently released report on SNP enrollment, the Centers for Medicare & Medicaid Services (CMS) estimated that between 25% and 40% of dual eligible SNP enrollees do not meet the definition of dual eligible for D-SNP purposes.[5]

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) eliminated the authority for SNPs to be disproportionate SNPs, effective January 1, 2010.  Thus, beginning with the 2010 plan year and going forward, all SNPs can enroll only those individuals who meet the definition of special needs individual.[6]  The change in the law applied only to new enrollees; existing plan members who did not meet the special needs definition were permitted to remain.

Affordable Care Act

ACA requires the Secretary to establish procedures to transition non-special needs individuals out of SNPs, and back into either traditional Medicare or a non-SNP Medicare Advantage plan, so that all such individuals would be out of SNPs no later than January 1, 2013.[7]  The provision allows for an exception to this process for "a limited period of time" for individuals enrolled in dually-eligible D-SNPs who have lost their eligibility for Medicaid.

The Secretary has chosen to implement the ACA provision to require such transition by January 1, 2012.

CMS Guidance of June 17, 2011 to All Medicare Advantage Organizations

CMS's Guidance to Medicare Advantage Organizations (MAOs) states that its disenrollment directives only apply to:

• Those individuals who enrolled in a disproportionate SNP prior to January 1, 2010 and did not meet the special needs definition of their plan and;
• Those individuals enrolled in a C-SNP prior to January 1, 2010 but who no longer meet C-SNP criteria (that were revised pursuant to provisions of MIPPA) as of that date.[8]

The SNP must retain individuals who did not meet the special needs definition prior to January 1, 2010, but who currently do meet that definition.

The Guidance states that MAOs may not passively enroll individuals affected by this disenrollment into other MA plans that they sponsor.  They may, however, market their other plans to the beneficiaries, in accordance with general MA marketing requirements, giving beneficiaries the choice to actively enroll in their other plans, or not.

Model Notice

The Model Notice included with the CMS Guidance informs the beneficiary that the plan believes the beneficiary does not meet the definition of a special needs individual and that the beneficiary's enrollment will end on December 31, 2011; it tells the individual to contact the plan at a number given if the information is incorrect. 

The notice further describes options to join another MA plan or change to original Medicare with supplemental coverage and a Prescription Drug Plan.  It informs such beneficiaries that they have until February 29, 2012 to enroll in a new plan, but that for coverage in another MA plan to be available as of January 1, 2012, the beneficiary should enroll before December 31, 2011. 

The notice informs the recipient that if she or he receives Extra Help (the Part D low income subsidy) or Medicaid, she or he can enroll in an MA plan at any time during the year. 

The notice includes telephone numbers for the plan, for Medicare, for the State Medical Assistance Office and for the State Health Insurance Commissioner's office for assistance with Medigap policy choices.[9]

Special Needs Individuals Who Subsequently Lose Special Needs Status

With respect to those individuals who met the special needs definition when they enrolled but subsequently lost that status, Medicare Advantage Organizations (MAOs) are directed to follow existing policies that allow for a grace period of continued eligibility pending the possibility of regaining special needs status.  Under these circumstances, the plan must continue the individual's enrollment for at least one month and up to six months if the individual can reasonably be expected to re-qualify as a special needs individual within six months.  The one to six months continued enrollment period begins on the first month after the information about the loss of status has been received by the plan and communicated to the individual.[10]

Conclusion

The fall months bring many notices to Medicare beneficiaries about their status, options and choices.  This notice will be one among many that beneficiaries might receive.  Beneficiaries and those who assist them should be attentive to the various notices and should seek assistance if they do not understand a particular notice.  In addition, it is important for beneficiaries and their advocates to retain for their records at least a copy of all notices received.