Specialized Medicare Advantage (MA) plans for special needs individuals—known as special needs plans (SNPs)—are a new type of managed care plan established by the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003. Congress included the statutory provision authorizing SNPs as part of its effort to increase both plan and beneficiary participation in Medicare managed care. Created to encourage more opportunities for special needs individuals to access managed care, the SNP option allows MA plans to specialize in care for beneficiaries who are residing in long-term care facilities, dually eligible for Medicare and Medicaid, or chronically ill (diabetics). With the SNP designation, plans may limit enrollment to one of the special needs populations, tailoring benefits and provider networks to best meet the needs of these vulnerable groups.
In addition to expanding Medicare managed care choices for special needs individuals, some view SNPs as a new opportunity to integrate Medicare and Medicaid. Coordination of acute and long-term care services through managed care for high-cost, high-need populations—particularly dual eligibles (low-income Medicare beneficiaries also eligible for Medicaid)—has been an interest of state and federal policymakers for many years. Federal and state experiments to deliver a continuum of acute and longterm care services under a capitated payment structure date back to the 1970s. Since then, congressionally authorized demonstration programs and state waiver demonstrations have explored a variety of managed care and fee-for-service (FFS) approaches to coordinating and even integrating Medicare and Medicaid financing, case management, and service delivery. In this context, SNPs may be viewed as another step toward integration because they encourage access to managed care for special needs individuals without the requirement for a Medicaid waiver or a demonstration from Medicare.
