​In 2018 Congress permanently authorized the operation of Dual-Eligible Special Needs Plans (D-SNPs), a Medicare Advantage for beneficiaries eligible for both Medicare and Medicaid coverage. The plans were first authorized in 2003 and started providing coverage three years later.

As of early 2022, 45 states as well as the District of Columbia were operating D-SNPs, serving approximately 3.8 million enrollees. They are currently the preferred model for providing integrated care to dually eligible beneficiaries, as evidenced by the Contract Year 2023 Medicare Advantage and Part D Final Rule issued by the Centers for Medicare & Medicaid Services (CMS) in May 2022. At the same time, policymakers and providers alike are increasingly asking whether that model is suitable for one subset of dual-eligible beneficiaries: those who reside in long term care (LTC) facilities.

A High-Need Pop​​ulation

Any discussion of how to provide the best care for dual-eligibles must naturally begin with who dual-eligibles are. According to the Medicare Payment Advisory Commission's March 2023 data book, there were 12.2 million dual-eligibles in 2020, 63 percent of whom were age 65 and older. The CMS-supported Integrated Care Resource Center describes dual-eligibles as a high-need population: 70 percent have at least three chronic conditions, 41 percent have a behavioral disorder, and more than 40 percent depend on long-term services and supports. Crucially, they also comprise a significant share of enrollment and spending for both Medicare (19 percent and 34 percent) and Medicaid (14 percent and 30 percent).

Care models for dual-eligibles vary by state, though in recent years CMS and state regulators have encouraged the use of D-SNPs. These plans, which are required to contract with state agencies—who specify their terms and have discretion to approve as many or as few as they wish—are distinct from Chronic Conditions Special Needs Plans (C-SNPs), which are targeted towards individuals with certain chronic conditions, and Institutional Special Needs Plans (I-SNPs), which are targeted towards individuals who reside—or are expected to reside—in long-term care facilities for 90 days or longer. That's not to say there are not dual-eligible beneficiaries who reside in LTC facilities, however. In fact, these individuals pose unique considerations that, some argue, require a reconsideration of the D-SNP model altogether.

Where D-SNPs Work Well—and Whe​​re They Don't

The 45 states operating D-SNPs introduced them with several goals, one of which is to reduce nursing home utilization.

“We want to serve people in the community to the greatest extent possible and allow people to receive services in the setting of their choice," said Suzanne Gore, principal at State Health Partners and former deputy secretary of health and human resources and senior advisor on health care for Virginia Governor Terry McAuliffe. When it comes to individuals in LTC settings, Gore observed, D-SNPs are an effective model for short-stay residents transitioning from a hospital or rehabilitation facility. “It's great to have a D-SNP there to help set up their transition back to the community, assist in getting all their Medicaid home- and community-based services in place, and help with that transition. D-SNPs can work very well in that situation."

For dual-eligibles residing in LTC more permanently, D-SNPs may not be such an effective solution. Because they're tailored towards community-dwelling beneficiaries, they are generally designed to provide an infrastructure of care that already exists within an LTC facility.

“So many of the needs that you need to address in the community—in terms of housing security, sanitation, nutrition, and just access to nursing care—they're already addressed in the skilled nursing facility," explained Ron Chaffin, CEO of SeniorSelect Partners and principal at Chaffin Management. “In home community-based services, you're really trying to replicate a lot of that support."

In North Carolina, where Adam Sholar serves as president and CEO of the North Carolina Health Care Facilities Association, roughly 10 percent of the state's dual-eligibles live in nursing homes. As in other states, this means that D-SNP enrollees who reside in nursing homes may often be one of a few plan members in their facility, or even the only one.

“They really don't get a lot of the focus," Sholar said. “The majority of D-SNP members live in the community. You're looking at supplemental benefits for people that live in the community. You are focused on improving care for people that live in the community. And the clinical resources that are unlocked with an I-SNP that has 60 plan enrollees living in the same nursing facility just aren't unlocked when you're talking about a D-SNP that's really focused on most of its members living in the community."

A Focus on Who's Paying, Not What Care Is Ne​​eded

As the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) stated in a January 2023 letter to specific members from the Senate Committee on Finance after they requested information on how to better improve dual-eligibles, D-SNPs add another administrative layer without measurable or proven data to show the impact on care.

Upwards of 95 percent of the Medicaid spending for a dual-eligible nursing home beneficiary is attributed to the nursing home custodial payment. This means that states are paying managed care organizations (MCOs) administrative fees to 'manage' very little of an enrollee's care. As Sholar put it, the D-SNP model is more focused on “who's paying for things, not what care specific individuals need."

By contrast, Gore argued, I-SNPs “are designed to improve the quality of care for nursing home residents and simplify their care model." This is in large part because the I-SNP model generally provides for onsite primary care in the form of a nurse practitioner, which goes a long way towards reducing hospitalizations (a critical quality metric for nursing homes). They also reduce administrative inefficiencies, like the additional layer of care coordination and planning necessary for what may be a facility's sole D-SNP enrollee.

Sholar echoed Gore's point, observing that I-SNPs—particularly those operated by providers themselves—allow for more integrated and effective care. “When you've got integration with the actual provider of the healthcare, your clinical staff are aligned, your incentives are aligned, that's when you really see the integrated care actually happening in a thoughtful way for that patient population," Sholar said.

The Potential of Pr​ovider-Led I-SNPs

As the chief strategy officer of provider-led I-SNP Pruitt Health, Mary Ousley sees a promising future for that model, in which providers offer their own coverage under Medicare Advantage. “I do think that it improves patient care, patient satisfaction, family satisfaction, and achieving better outcomes," she said, stressing that by providing enhanced onsite primary care, the model reduces hospitalizations, thereby saving scarce Medicare funds. “I have seen firsthand that for members of the special needs plans, their care outcomes are improved, their quality of life has improved. Especially in our own individual surveys of our families and our residents, their satisfaction with care is much greater."

The idea of forming their own I-SNPs may seem daunting to LTC providers; it's a years-long process that functionally involves becoming an insurance provider. But whereas D-SNP contracts must be approved and specified by state regulators, creating an I-SNP is a step that providers can take of their own volition to provide high-quality integrated care to LTC-dwelling dual-eligibles (and, of course, everyone else in the facility).

Still, another path may yet lie with the states. “There's a way to really make the FIDE-SNP and the I-SNP compatible with each other through the state Medicaid strategy," Chaffin said, referring to a subset of D-SNP known as a Fully Integrated Dual-Eligible SNP (FIDE-SNP). “The reason the state would do that is because the state has a vested interest in having high quality nursing homes available for individuals who need that level of care in the state."

Seth SimonsOf course, any real paradigmatic shift in care for LTC-dwelling dual-eligibles ultimately lies in the hands of policymakers. Finding the 'perfect' or 'one size fits all' solution for a highly complex dually eligible population is challenging especially given the heterogeneity of this population. In recognition of the diversity of needs between community dwelling and LTC dually eligible beneficiaries, tailoring an integrated solution for these distinct subpopulations is likely the most prudent path forward.​

Steve Manning is a journalist based in New York City.