GAO-20-319, Medicare and Medicaid: Alignment of Managed Care Plans for Dual-Eligible Beneficiaries

MEDICARE AND

MEDICAID

Alignment of

Managed Care Plans

for Dual-Eligible

Beneficiaries

Report to Congressional Committees

March 2020

GAO-20-319

United States Government Accountability Office

Highlights of GAO-20-319, a report to

congressional committees

March 2020

MEDICARE AND MEDICAID

Alignment of Managed Care Plans for Dual

-Eligible

Beneficiaries

What GAO Found

Dual-eligible beneficiaries are Medicare beneficiaries who are also enrolled in the

Medicaid program in their state. In certain states, they may receive both types of

benefits through private managed care plans. As of January 2019, about 386,000

such individuals were enrolled in both a private Medicare plan known as a dual-

eligible special needs plan (D-SNP) and a Medicaid managed care organization

(MCO) that were offered by the same or related companies. This arrangement,

known as aligned enrollment, may create opportunities for better coordination

between Medicare’s acute care services and Medicaid’s long-term services and

supports, such as nursing facility care or personal care services.

Example of Aligned Enrollment through Managed Care for a Dual-Eligible Beneficiary

Medicaid officials in seven selected states described challenges with aligned

enrollment. One challenge cited by officials in six of the states was using D-SNP

and Medicare data to implement and evaluate aligned enrollment. For example,

officials in one state said they cannot separate D-SNP quality data for just their

state, because some D-SNPs report data spanning multiple states to the Centers

for Medicare & Medicaid Services (CMS). As of December 2019, CMS officials

said they are determining the best way for D-SNPs to report these quality data.

CMS has assisted states with aligned enrollment, but lacks quality information on

the experiences of dual-eligible beneficiaries who have aligned enrollment

through a process known as default enrollment. With default enrollment, states

allow automatic assignment of beneficiaries who are enrolled in a Medicaid MCO

and are about to become eligible for Medicare to the D-SNP aligned with that

MCO. However, CMS’s monthly reports on default enrollment do not include

information on beneficiaries who choose to disenroll in the first 90 days after

being default enrolled, a time frame specified in regulation. According to one

beneficiary group, some beneficiaries may disenroll, because they did not realize

they were default enrolled and their provider is not in the D-SNP’s network.

Quality information on the experiences of dual-eligible beneficiaries after default

enrollment would allow CMS to better identify the extent to which beneficiaries

face challenges and to determine how, if at all, to address the challenges.

Why GAO Did This Study

Congress authorized the

establishment of D-SNPs in 2003 to

address the unique needs of dual-

eligible beneficiaries. For example,

D-SNPs are required to provide

certain specialized services targeted

at the needs of dual-eligible

beneficiaries, such as health risk

assessments. D-SNPs must have

approval of state Medicaid agencies

to operate, and states can require D-

SNPs to coordinate with Medicaid.

Congress included a provision in

statute for GAO to review D-SNPs’

integration with state Medicaid

programs. This report, among other

objectives, (1) describes what is

known about selected states’

experiences with aligned enrollment

in D-SNPs, and (2) examines CMS’s

oversight of aligned enrollment.

GAO reviewed relevant federal

guidance and internal control

standards. GAO also interviewed

Medicaid officials in seven selected

states and reviewed available

documentation. The states (Arizona,

Florida, Kansas, New Jersey,

Pennsylvania, Tennessee, and

Virginia) were selected, in part, for

variation in experiences with aligned

enrollment. GAO also interviewed

officials from CMS, beneficiary

groups, and companies that offered

D-SNPs and Medicaid MCOs.

What GAO Recommends

GAO recommends that CMS take

steps to obtain quality information on

the experiences of dual-eligible

beneficiaries who have been default

enrolled into D-SNPs. The

Department of Health and Human

Services concurred with the

recommendation.

View GAO-20-319. For more information,

contact James Cosgrove at (202) 512-7114

[email protected].

Page i GAO-20-319 Dual-Eligible Special Needs Plans

Letter 1

Background 5

Most States that Can Encourage Aligned Enrollment Have Begun

to Do So 11

Medicaid Officials in Selected States Described Challenges with

Aligned Enrollment 17

CMS Has Assisted States with Aligned Enrollment, but Lacks

Quality Information on the Experience of Beneficiaries Whose

Aligned Enrollment Was Due to Default Enrollment 23

Conclusions 26

Recommendation for Executive Action 26

Agency Comments 26

Appendix I Comments from the Department of Health and Human Services 28

Appendix II GAO Contact and Staff Acknowledgments 30

Related GAO Products 31

Table

Table 1: Approaches States Can Use to Encourage Aligned

Enrollment 8

Figures

Figure 1: States’ Use of Approaches to Encourage Aligned

Enrollment in D-SNPs for Dual-Eligible Beneficiaries, July

2019 12

Figure 2: Extent of Aligned D-SNPs in Selected States, 2019 14

Figure 3: Dual-Eligible Beneficiaries in Medicaid Managed Care in

Selected States, by Enrollment, 2019 17

Contents

Page ii GAO-20-319 Dual-Eligible Special Needs Plans

Abbreviations

CMS Centers for Medicare & Medicaid Services

D-SNP dual-eligible special needs plan

HHS Department of Health and Human Services

MA Medicare Advantage

MCO managed care organization

MLTSS managed long-term services and supports

This is a work of the U.S. government and is not subject to copyright protection in the

United States. The published product may be reproduced and distributed in its entirety

without further permission from GAO. However, because this work may contain

copyrighted images or other material, permission from the copyright holder may be

necessary if you wish to reproduce this material separately.

Page 1 GAO-20-319 Dual-Eligible Special Needs Plans

441 G St. N.W.

Washington, DC 20548

March 13, 2020

The Honorable Chuck Grassley

Chairman

The Honorable Ron Wyden

Ranking Member

Committee on Finance

United States Senate

The Honorable Frank Pallone, Jr.

Chairman

The Honorable Greg Walden

Republican Leader

Committee on Energy and Commerce

House of Representatives

The Honorable Richard Neal

Chairman

The Honorable Kevin Brady

Ranking Member

Committee on Ways and Means

House of Representatives

In 2017, about 12 million of Medicare’s over 61 million beneficiaries were

also enrolled in Medicaid.

These individuals, known as dual-eligible

beneficiaries, are often in poorer health and require more care than other

Medicare and Medicaid beneficiaries. As such, in 2019, the Centers for

Medicare & Medicaid Services (CMS), which administers Medicare and

oversees Medicaid, established better care for dual-eligible beneficiaries

as one of its 16 strategic initiatives.

Dual-eligible beneficiaries can face

challenges in dealing with the separate Medicare and Medicaid programs,

which have different or overlapping sets of benefits, provider networks,

Medicare is the federal health insurance program for seniors, certain individuals with

disabilities, and individuals with end-stage renal disease. Medicaid is a joint federal-state

program and covers medical and health-related services for certain low-income and

medically needy individuals, such as children and individuals who are disabled or elderly.

Centers for Medicare & Medicaid Services, Better Care for Dual Eligibles (Dec. 6, 2019).

At the federal level, CMS, which is part of the Department of Health and Human Services,

is responsible for overseeing the design and operation of states’ Medicaid programs.

States are responsible for the day-to-day operations of their respective Medicaid

programs.

Letter

Page 2 GAO-20-319 Dual-Eligible Special Needs Plans

and payment policies. For example, the Medicare program is generally

responsible for covering dual-eligible beneficiaries’ primary and acute

care, including hospitalizations and physician services, while state

Medicaid programs are generally responsible for covering their long-term

services and supports, such as nursing facility care or personal care

services. The fragmentation between these separate programs can lead

to poorly coordinated care for dual-eligible beneficiaries.

In certain states, dual-eligible beneficiaries may receive Medicare

benefits, Medicaid benefits, or both types of benefits through private

managed care plans. Like other Medicare beneficiaries, dual-eligible

beneficiaries can choose to enroll in Medicare Advantage (MA) plans,

which are the private plan alternative to traditional Medicare and generally

must cover all traditional Medicare benefits. In particular, as of January

2019, about 2.2 million dual-eligible beneficiaries in 42 states and the

District of Columbia had chosen to enroll in dual-eligible special needs

plans (D-SNP), which are a type of MA plan. Congress first authorized the

establishment of D-SNPs in 2003 to address the unique needs of dual-

eligible beneficiaries. D-SNPs are required to provide certain specialized

services targeted at the needs of dual-eligible beneficiaries, such as

performing health risk assessments and creating individualized care

plans. Since January 2013, federal law has required all D-SNPs to have a

contract with each state in which it wants to operate.

In addition, some

states require or allow Medicaid beneficiaries, including dual-eligible

beneficiaries, to receive their Medicaid benefits through a Medicaid

managed care organization (MCO).

The Bipartisan Budget Act of 2018 directed CMS to assist states that are

interested in using D-SNPs as a platform for integration with state

Medicaid programs, among other things.

Some states have pursued

such integration through the use of an arrangement known as aligned

enrollment. Aligned enrollment occurs when a dual-eligible beneficiary is

enrolled in a D-SNP and Medicaid MCO that are offered by the same or

related companies.

Some studies suggest that aligned enrollment may

42 U.S.C. § 1395w-28(f)(3)(D).

Pub. L. No. 115-123, § 50311, 132 Stat. 64, 192. We previously reviewed how D-SNPs

work with state Medicaid agencies to enhance benefit integration and care coordination.

See GAO, Medicare Special Needs Plans: CMS Should Improve Information Available

about Dual-Eligible Plans’ Performance, GAO-12-864 (Washington, D.C.: Sept. 13, 2012).

See 42 C.F.R. § 422.2 (2019).

Page 3 GAO-20-319 Dual-Eligible Special Needs Plans

create opportunities for the company or companies to better coordinate

care and integrate benefits, which may help prevent unnecessary

hospitalizations and institutionalizations.

The Bipartisan Budget Act of 2018 includes a provision for us to review

the integration between D-SNPs and state Medicaid programs.

This

report

1. describes what is known about the extent to which states have

encouraged aligned enrollment of dual-eligible beneficiaries in D-

SNPs,

2. describes what is known about selected states’ experiences with

aligned enrollment, and

3. examines CMS’s role in and oversight of states’ use of aligned

enrollment.

To describe what is known about the extent to which states have

encouraged aligned enrollment of dual-eligible beneficiaries in D-SNPs,

we reviewed published materials from the Integrated Care Resource

Center (a CMS initiative to provide technical assistance, which is

operated by contractors) and others. To corroborate this information, we

interviewed officials from CMS, the Integrated Care Resource Center, and

Medicaid agencies in seven selected states. We selected the seven

states (Arizona, Florida, Kansas, New Jersey, Pennsylvania, Tennessee,

and Virginia) based on the variation in their experiences with aligned

enrollment in D-SNPs, the number of D-SNP enrollees, and their length of

time using a managed care delivery system to provide long-term services

and supports in Medicaid, also referred to as managed long-term services

For example, a study in Minnesota compared dual-eligible beneficiaries with aligned

enrollment to dual-eligible beneficiaries in a Medicaid MCO and either traditional Medicare

or an MA plan. The researchers found the dual-eligible beneficiaries with aligned

enrollment received more primary care and less care in hospital settings from 2010

through 2012. However, they could not assess whether more frequent primary care use

directly led to lower hospital-based care. Another study compared dual-eligible

beneficiaries with aligned enrollment to dual-eligible beneficiaries covered by traditional

Medicare and Medicaid in Massachusetts, and it found fewer entries into nursing facilities

between 2007 and 2012. See Wayne L. Anderson, Zhanlian Feng, and Sharon K. Long,

Minnesota Managed Care Longitudinal Data Analysis (Washington, D.C.: Office of the

Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human

Services, Mar. 31, 2016); and JEN Associates, Inc., Massachusetts SCO Evaluation

Nursing Facility Residency and Mortality Summary Report (Cambridge, Mass.: Nov. 23,

2015).

Pub. L. No. 115-123, § 50311(e), 132 Stat. 64, 199.

Page 4 GAO-20-319 Dual-Eligible Special Needs Plans

and supports (MLTSS). We limited our scope to states with MLTSS, in

part, because about 80 percent of Medicaid spending on relevant dual-

eligible beneficiaries was for long-term services and supports in 2013, the

most recent year such data were available.

We reviewed the selected

states’ contracts with D-SNPs and other available documentation to

corroborate evidence gathered in these interviews. We also received data

on aligned enrollment from five of the seven selected states. We

assessed the reliability of the state-reported data by checking for internal

consistency and comparing the state-reported data to published

information, and we determined the data were sufficiently reliable for the

purposes of this report.

To describe what is known about selected states’ experiences with

aligned enrollment, we interviewed Medicaid officials in each of the seven

selected states and CMS officials. In addition, we reviewed available

documentation to corroborate officials’ statements. To supplement this

information, we interviewed seven beneficiary groups, which included

nonprofit organizations, State Health Insurance Assistance Programs in

two of our seven selected states, and the long-term care ombudsman in

one selected state.

We also interviewed three companies that offered D-

SNPs and Medicaid MCOs, and these companies varied in their number

of D-SNP enrollees and number of selected states served. The

perspectives of the Medicaid officials and other groups interviewed in the

seven selected states are not generalizable, but provided us with valuable

insight on states’ experiences with aligned enrollment.

To examine CMS’s role in and oversight of states’ use of aligned

enrollment, we reviewed CMS’s policies and procedures on D-SNPs and

aligned enrollment and assessed them against federal internal control

standards related to information and communication.

We also

Medicare Payment Advisory Commission, Report to the Congress: Medicare and the

Health Care Delivery System (Washington, D.C.: June 14, 2019), 427.

Each state has a State Health Insurance Assistance Program, which is a state agency or

contractor that provides insurance counseling and assistance to Medicare beneficiaries,

their families, and caregivers. In addition, each state has a long-term care ombudsman

program that provides assistance for residents of nursing homes, assisted living facilities,

and other types of facilities by working to resolve problems raised by residents or their

families. A state’s long-term care ombudsman program assists Medicaid beneficiaries and

individuals not covered by Medicaid.

See GAO, Standards for Internal Control in the Federal Government, GAO-14-704G

(Washington, D.C.: Sept. 10, 2014). Internal control is a process effected by an entity’s

oversight body, management, and other personnel that provides reasonable assurance

that the objectives of an entity will be achieved.

Page 5 GAO-20-319 Dual-Eligible Special Needs Plans

interviewed CMS officials, Medicaid officials in each selected state,

beneficiary groups, and companies that offered D-SNPs and Medicaid

MCOs, as previously discussed.

We conducted this performance audit from February 2019 to March 2020

in accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain

sufficient, appropriate evidence to provide a reasonable basis for our

findings and conclusions based on our audit objectives. We believe that

the evidence obtained provides a reasonable basis for our findings and

conclusions based on our audit objectives.

Dual-eligible beneficiaries qualify for both Medicare and Medicaid, and

may enroll in and receive benefits covered by each program. Individuals

ages 65 or older can qualify for Medicare based on age, and individuals

ages 18 to 64 can qualify for Medicare based on disability.

Medicaid

eligibility varies by state, but beneficiaries may qualify based on having a

low level of income, a need for nursing home care, high medical

expenses, or other criteria.

For dual-eligible beneficiaries, Medicare is the primary payer for any

benefits covered by both programs. As a result, Medicare is the primary

payer for acute and post-acute care, such as physician services,

hospitalizations, prescription drugs, and skilled nursing facility care. For

many dual-eligible beneficiaries, Medicaid covers benefits not covered by

Medicare. This includes long-term services and supports, which may

include nursing home care, personal care services, or adult day care.

Whether Medicaid covers these benefits varies between the two main

categories of dual-eligible beneficiaries. Those in the first category are

known as full-benefit, dual-eligible beneficiaries, because they may

receive all Medicaid benefits, in addition to Medicare benefits.

Medicaid

also pays for their Medicare premiums and, in some cases, the cost-

sharing for their Medicare benefits. Those in the second category are

known as partial-benefit, dual-eligible beneficiaries, because Medicaid

assistance is limited to payment of their Medicare premiums and, in some

Individuals of any age with end-stage renal disease can also qualify for Medicare.

For the remainder of the report, we are referring to full-benefit, dual-eligible beneficiaries

when discussing dual-eligible beneficiaries unless otherwise specified.

Background

Medicare and Medicaid

Coverage for Dual-Eligible

Beneficiaries

Page 6 GAO-20-319 Dual-Eligible Special Needs Plans

cases, the cost-sharing for their Medicare benefits. Partial-benefit, dual-

eligible beneficiaries have limited income and assets, but their income

and assets are not low enough to qualify them for full Medicaid benefits in

their state.

For Medicare, dual-eligible beneficiaries can choose to receive their

Medicare services from either traditional Medicare or from MA plans.

These options differ in key ways. For example, traditional Medicare may

have a more extensive provider network than MA plans. However, MA

plans may cover additional benefits, such as vision or dental care, which

are generally not covered under traditional Medicare. If dual-eligible

beneficiaries choose to enroll in MA plans, they may also have the choice

between regular MA plans and D-SNPs, which offer certain services

targeted at the needs of dual-eligible beneficiaries. For example, D-SNPs

are required to perform health risk assessments, create individualized

care plans, and provide an interdisciplinary care team for each beneficiary

enrolled. They may also cover transportation services, home

modifications, or other specialized services that are more likely to be used

by dual-eligible beneficiaries.

For Medicaid, states may allow or require Medicaid beneficiaries,

including dual-eligible beneficiaries, to receive their Medicaid benefits

through an MCO. In this managed care model, Medicaid MCOs are

responsible for arranging for and paying providers’ claims for a specific

set of Medicaid benefits provided to beneficiaries.

More recently, some

states have created new Medicaid managed care programs or expanded

the benefits covered by existing Medicaid managed care programs in

order to include additional populations previously covered through

Medicaid fee-for-service. The new populations include seniors, persons

with disabilities, and those who need long-term services and supports—

many of whom may be dually eligible.

A dual-eligible beneficiary may be able to enroll in a D-SNP and Medicaid

MCO that are offered by the same or related companies, an arrangement

CMS pays MA plans a fixed monthly amount per beneficiary based on (1) the plan’s

estimated cost for providing the same benefits as traditional Medicare; and (2) CMS’s

benchmark, which is the maximum amount it will pay MA plans in a given locality.

States pay Medicaid MCOs a fixed periodic payment per beneficiary.

Aligned Enrollment in D-

SNPs in States with

MLTSS

Page 7 GAO-20-319 Dual-Eligible Special Needs Plans

known as aligned enrollment.

In states with MLTSS, aligned enrollment

means the same or related companies provide a beneficiary’s Medicare

benefits, such as primary and acute care, through a D-SNP and Medicaid

benefits, such as long-term services and supports, through a Medicaid

MCO.

State Medicaid agencies enter into contracts with both D-SNPs and

Medicaid MCOs, and these contracts may include provisions to facilitate

and encourage aligned enrollment. Since January 2013, all D-SNPs have

been required to have an executed contract with the Medicaid agency in

each state in which it operates.

A state can enter into contracts with all,

some, or none of the D-SNPs seeking to operate in the state, and any D-

SNPs that the state declines to contract with cannot operate in the state.

Each year, CMS reviews D-SNPs’ contracts with states to ensure that

they include eight required elements, including the D-SNP’s responsibility

for providing or arranging the provision of Medicaid benefits, among other

things.

According to CMS officials, in these reviews, CMS does not

collect information regarding whether states are imposing requirements

pertaining to aligned enrollment. States also have contracts with Medicaid

Aligned enrollment can occur under three scenarios: (1) the same company offers the D-

SNP and Medicaid MCO, (2) the companies that offer the D-SNP and Medicaid MCO

have the same parent company, and (3) the Medicaid MCO is owned or controlled by the

D-SNP’s parent company. See 42 C.F.R. § 422.2 (2019). For the purposes of this report,

we refer to the companies in the second and third scenarios as “related companies.”

For purposes of this report, we specifically reviewed aligned enrollment between D-

SNPs and Medicaid MCOs that cover long-term services and supports. However, the

definition of aligned enrollment in federal regulation does not require the Medicaid MCO to

cover long-term services and supports. See 42 C.F.R. § 422.2 (2019). According to CMS

officials, aligned enrollment can include Medicaid MCOs that are responsible for covering

benefits like behavioral health, home health, or durable medical equipment. Both Medicare

and Medicaid cover these benefits, but eligibility requirements and scope of coverage

differ between the two programs. Therefore, aligned enrollment between the D-SNP and

Medicaid MCO can improve the coordination of these benefits for dual-eligible

beneficiaries.

42 U.S.C. § 1395w-28(f)(3)(D).

These eight elements are specified in regulation. They are (1) the D-SNP’s

responsibility, including financial obligations, to provide or arrange for Medicaid benefits;

(2) the categories of eligibility for dual-eligible beneficiaries to be enrolled in the D-SNP;

(3) the Medicaid benefits covered under the D-SNP; (4) the cost-sharing protections

covered under the D-SNP; (5) the identification and sharing of information about Medicaid

provider participation; (6) the verification process of beneficiaries’ eligibility for both

Medicare and Medicaid; (7) the service area covered by the D-SNP; and (8) the contract

period for the D-SNP. See 42 C.F.R. § 422.107(c) (2019).

Page 8 GAO-20-319 Dual-Eligible Special Needs Plans

MCOs, which can include requirements that could facilitate or encourage

aligned enrollment.

As shown in table 1, CMS’s Integrated Care Resource Center has

identified five types of approaches that states can use to encourage

aligned enrollment.

For example, states can manage which D-SNPs

operate in the state, such as only allowing D-SNPs with an aligned

Medicaid MCO (that is, a MCO offered by the same company or a related

company). This gives dual-eligible beneficiaries greater options for

choosing aligned enrollment. As another example, states can allow the

automatic assignment of certain dual-eligible beneficiaries to a D-SNP

aligned with a Medicaid MCO, a process known as default enrollment.

Default enrollment, which requires CMS approval, can directly increase

the number of dual-eligible beneficiaries with aligned enrollment.

Table 1: Approaches States Can Use to Encourage Aligned Enrollment

Approach

Description of how a state can implement the approach

Managing which dual-eligible

special needs plans (D-SNP)

operate in the state

For example, the state contracts only with certain D-SNPs, such as contracting only with D-SNPs that

have an aligned Medicaid managed care organization (MCO)—that is, a Medicaid MCO offered by

the same or a related company. As another example, the state requires some or all Medicaid MCOs

to offer an aligned D-SNP.

As a result, some or all D-SNPs operating in the state would also have an aligned Medicaid MCO,

giving dual-eligible beneficiaries greater options for choosing aligned enrollment.

Limiting D-SNP enrollment to

full-benefit, dual-eligible

beneficiaries

The state uses its contracts with some or all D-SNPs in the state to limit enrollment to full-benefit,

dual-eligible beneficiaries who may receive all Medicaid benefits in addition to Medicare benefits. This

would exclude partial-benefit, dual-eligible beneficiaries whose Medicaid assistance is limited to

payment of their Medicare premiums and, in some cases, the cost-sharing for their Medicare benefits.

As a result, the state can deliver a unified Medicare-Medicaid benefit package, because the benefit

package does not need to accommodate the differences in Medicaid benefits received by partial- and

full-benefit, dual-eligible beneficiaries. A unified Medicare-Medicaid benefit package can be more

easily described in D-SNP marketing materials and communications, according to the Integrated Care

Resource Center.

This may help a beneficiary make a more informed decision around aligned

enrollment.

Erin Weir Lakhmani and Alexandra Kruse, Tips to Improve Medicare-Medicaid

Integration Using D-SNPs: Promoting Aligned Enrollment (Integrated Care Resource

Center, Apr. 2018).

Page 9 GAO-20-319 Dual-Eligible Special Needs Plans

Approach

Description of how a state can implement the approach

Automatically assigning

certain beneficiaries to plans

with aligned enrollment,

including default enrollment

The state allows automatic assignment of full-benefit, dual-eligible beneficiaries to an aligned D-SNP

(which is known as default enrollment); the state assigns full-benefit, dual-eligible beneficiaries to an

aligned Medicaid MCO; or both.

• Assignment to aligned D-SNPs (default enrollment). The state allows automatic assignment

of beneficiaries who are enrolled in a Medicaid MCO and are about to become eligible for

Medicare to a D-SNP aligned with that MCO. With default enrollment, beneficiaries have the

ability to opt out of the D-SNP prior to being enrolled or to disenroll within the first 90 days after

enrollment. CMS approves D-SNPs’ eligibility to receive beneficiaries through the default

enrollment process, and CMS processes the enrollment transactions of beneficiaries being

default enrolled.

• Assignment to aligned Medicaid MCOs. The state automatically assigns dual-eligible

beneficiaries to the Medicaid MCO aligned with their existing D-SNP, subject to the beneficiaries’

ability to opt out or choose a different Medicaid MCO. For example, this can occur with

beneficiaries who are already in a D-SNP and about to become eligible for Medicaid long-term

services and supports.

Either form of automatic assignment can directly increase the number of dual-eligible beneficiaries

with aligned enrollment.

Encouraging D-SNP

marketing to better support

informed beneficiary decision-

making

For example, the state, through its contracts with D-SNPs, requires or encourages a D-SNP to target

its marketing and outreach to beneficiaries in its aligned Medicaid MCO. As another example, the

state reviews D-SNP marketing materials and develops standard marketing messages to make sure

the marketing accurately characterizes D-SNPs and services provided.

This may minimize beneficiaries’ confusion by informing them about aligned enrollment options and

the benefits of aligned enrollment.

Enabling counselors to assist

beneficiaries with aligned

enrollment decisions

The state trains counselors in its State Health Insurance Assistance Program (a state agency or

contractor that provides insurance counseling to Medicare beneficiaries) on how to assist dual-eligible

beneficiaries with considerations related to aligned enrollment and with enrollment into aligned plans.

As a result, the counselors may be better equipped to reduce beneficiaries’ confusion and help them

make informed decisions about whether to enroll in aligned plans.

Source: GAO analysis of Integrated Care Resource Center information. | GAO-20-319

Notes: We considered aligned enrollment to occur when a dual-eligible beneficiary—a beneficiary

who qualifies for Medicare and Medicaid—is enrolled in a D-SNP and Medicaid MCO that are offered

by the same or related companies, and the MCO covers long-term services and supports.

The Integrated Care Resource Center is a CMS initiative to provide technical assistance and is

operated by contractors.

In addition to D-SNPs with aligned enrollment, two other types of

Medicare plans—Medicare-Medicaid plans and Program of All-Inclusive

Care for the Elderly plans—exclusively or primarily serve dual-eligible

beneficiaries and are responsible for both Medicare and Medicaid

benefits. These three types of Medicare plans jointly served

approximately 818,000 dual-eligible beneficiaries as of January 2019.

• Aligned enrollment in D-SNPs: As of January 2019, approximately

386,000 dual-eligible beneficiaries enrolled in D-SNPs had aligned

enrollment, according to a report by the Medicare Payment Advisory

Coordinated Care for

Dual-Eligible Beneficiaries

Inside and Outside of D-

SNPs

Page 10 GAO-20-319 Dual-Eligible Special Needs Plans

Commission.

This includes beneficiaries in a subset of D-SNPs that

have been designated as fully integrated D-SNPs, which must meet

additional specific requirements. For example, they must provide both

Medicare and Medicaid benefits through a single managed care plan.

In addition, the Medicaid benefits provided by the fully integrated D-

SNPs must include long-term services and supports.

• Medicare-Medicaid plans: As of January 2019, approximately

388,000 dual-eligible beneficiaries in nine states were enrolled in

these types of plans. These plans, which were established through

CMS’s Financial Alignment Initiative, provide all Medicare benefits

and all or almost all Medicaid benefits, and have some administrative

processes that have been combined.

In April 2019, CMS sent a

letter to state Medicaid directors inviting additional states to express

interest in the use of Medicare-Medicaid plans.

• Program of All-Inclusive Care for the Elderly plans: As of January

2019, approximately 44,000 beneficiaries in 31 states were enrolled in

these types of plans. Most, but not all, are full-benefit, dual-eligible

beneficiaries, and they are ages 55 or older and need the level of care

provided in a nursing home. The plans are provider-sponsored and

provide all Medicare and Medicaid benefits. In addition, each plan is

required to have a physical site to provide adult day services.

Medicare Payment Advisory Commission, Report to the Congress: Medicare and the

Health Care Delivery System (Washington, D.C.: June 14, 2019), 436. The report did not

indicate the number of states in which this aligned enrollment occurred. This is about 18

percent of the 2.2 million full- and partial-benefit, dual-eligible beneficiaries enrolled in D-

SNPs as of January 2019.

Starting in 2021, “highly integrated D-SNPs” will be a new designation for D-SNPs that

provide long-term services and supports, behavioral health services, or both, consistent

with state policy—including when provided through an aligned Medicaid MCO. Also

starting in 2021, D-SNPs that do not qualify for the fully integrated D-SNP or highly

integrated D-SNP designations will face new requirements for notifying state Medicaid

agencies about hospital and skilled nursing facility admissions for certain dual-eligible

beneficiaries.

In a previous report on the Financial Alignment Initiative, we made two

recommendations designed to help CMS strengthen its oversight of the provision of care

coordination services for dual-eligible beneficiaries enrolled in the initiative; CMS took

action to address these recommendations. See GAO, Medicare and Medicaid: Additional

Oversight Needed of CMS’s Demonstration to Coordinate the Care of Dual-Eligible

Beneficiaries, GAO-16-31 (Washington, D.C.: Dec. 18, 2015).

Centers for Medicare & Medicaid Services, State Medicaid Director Letter #19-002, Re:

Three New Opportunities to Test Innovative Models of Integrated Care for Individuals

Dually Eligible for Medicaid and Medicare (Baltimore, Md.: Apr. 24, 2019).

Page 11 GAO-20-319 Dual-Eligible Special Needs Plans

As of July 2019, of the 19 states with MLTSS and where aligned

enrollment of dual-eligible beneficiaries in D-SNPs is possible, 16 have

implemented at least one of the five approaches to encourage aligned

enrollment identified by CMS’s Integrated Care Resource Center.

(See

fig. 1.) Of those 16 states, 11 managed which D-SNPs operate in the

state, which is the foundation for promoting aligned enrollment, according

to officials from the Integrated Care Resource Center.

According to the Medicaid and CHIP Payment and Access Commission, 24 states had

MLTSS programs as of June 2019. (See Medicaid and CHIP Payment and Access

Commission, Managed Long-Term Services and Supports, accessed December 17, 2019,

https://www.macpac.gov/subtopic/managed-long-term-services-and-supports/). We

determined that aligned enrollment in D-SNPs is not possible in five of the 24 states with

MLTSS. As of July 2019, one state did not have D-SNPs, two states administered MLTSS

programs via quasi-governmental entities, and two states did not have MLTSS programs

separate from the Financial Alignment Initiative.

Most States that Can

Encourage Aligned

Enrollment Have

Begun to Do So

Page 12 GAO-20-319 Dual-Eligible Special Needs Plans

Figure 1: States’ Use of Approaches to Encourage Aligned Enrollment in D-SNPs for Dual-Eligible Beneficiaries, July 2019

Note: We considered aligned enrollment to occur when a dual-eligible beneficiary—a beneficiary who

qualifies for Medicare and Medicaid—is enrolled in a D-SNP and Medicaid managed care

organization (MCO) that are offered by the same or related companies, and the MCO covers long-

term services and supports. This map reflects the status of states’ implementation of approaches to

encourage aligned enrollment as of July 2019. Medicaid officials in some states told us they plan to

Page 13 GAO-20-319 Dual-Eligible Special Needs Plans

start or end the use of some approaches in 2020. Dual-eligible beneficiaries who are enrolled in

Medicare-Medicaid plans or in Program of All-Inclusive Care for the Elderly plans in other states have

a form of integrated care that is similar to, but different from, aligned enrollment in D-SNPs. In

particular, as of July 2019, dual-eligible beneficiaries in nine states (California, Illinois,

Massachusetts, Michigan, New York, Ohio, Rhode Island, South Carolina, and Texas) are enrolled in

Medicare-Medicaid plans.

The “State where aligned enrollment between D-SNPs and MLTSS was not possible” category

includes five states with MLTSS. Of those, one state did not have D-SNPs, two states administered

MLTSS programs via quasi-governmental entities, and two states did not have MLTSS programs

separate from the Financial Alignment Initiative. The other 26 states and the District of Columbia did

not have MLTSS.

Of our seven selected states, all of them had implemented at least one of

the five approaches to encourage aligned enrollment in 2019. The three

most common approaches among our selected states were (1) managing

which D-SNPs operate in the state; (2) limiting D-SNP enrollment to full-

benefit, dual-eligible beneficiaries; and (3) encouraging D-SNP marketing

to better support informed beneficiary decision-making. The details of the

approaches implemented in each state varied widely.

Managing which D-SNPs operate in the state. Five of the seven

selected states (Arizona, New Jersey, Pennsylvania, Tennessee, and

Virginia) managed which D-SNPs operated in 2019, but they varied in

how they implemented this approach. For example, when Virginia

established its Medicaid MLTSS program in 2017, only one D-SNP

operated in the state, and Virginia required the companies with Medicaid

MLTSS contracts to also start offering D-SNPs within 3 years. In contrast,

when Pennsylvania and Tennessee implemented this approach, multiple

D-SNPs already operated in each state. Pennsylvania and Tennessee

required new D-SNPs to have aligned Medicaid MCOs, but allowed

existing D-SNPs to continue operating. As a result, beneficiaries had the

choice between D-SNPs that had aligned Medicaid MCOs and D-SNPs

that did not have aligned Medicaid MCOs. Medicaid officials in these two

states told us they chose not to cancel existing D-SNPs that did not have

aligned Medicaid MCOs, as doing so could have disrupted beneficiary-

provider relationships.

As a result of the selected states’ differing approaches to managing which

D-SNPs operated, the proportion of aligned to unaligned D-SNPs in each

state varied. (See fig. 2.)

Page 14 GAO-20-319 Dual-Eligible Special Needs Plans

Figure 2: Extent of Aligned D-SNPs in Selected States, 2019

Note: We considered aligned enrollment to occur when a dual-eligible beneficiary—a beneficiary who

qualifies for Medicare and Medicaid—is enrolled in dual-eligible special needs plan (D-SNP) and

Medicaid managed care organization (MCO) that are offered by the same or related companies, and

the MCO covers long-term services and supports. However, depending on the state, not all dual-

eligible beneficiaries in aligned D-SNPs have aligned enrollment.

The states shown managed which D-SNPs operated, generally contracting only with D-SNPs with

aligned Medicaid MCOs. Pennsylvania and Tennessee required new D-SNPs to have aligned

Medicaid MCOs, but allowed existing D-SNPs to continue operating.

Limiting D-SNP enrollment to full-benefit, dual-eligible beneficiaries.

Five of the selected states (Arizona, Kansas, New Jersey, Pennsylvania,

and Virginia) limited D-SNP enrollment in some or all of their D-SNPs to

full-benefit, dual-eligible beneficiaries in 2019.

In particular, Arizona and

New Jersey Medicaid officials said that limiting D-SNP enrollment to full-

benefit, dual-eligible beneficiaries allowed D-SNPs to provide a more

straightforward benefit package. In turn, this can be more easily

described in D-SNP materials and communications, which may help

Kansas had three D-SNPs, and the state limited enrollment in two D-SNPs to full-

benefit, dual-eligible beneficiaries in 2019, according to Kansas Medicaid officials. The

other D-SNP could enroll partial-benefit, dual-eligible beneficiaries. Kansas Medicaid

officials also told us that all D-SNPs in the state will be able to enroll partial-benefit, dual-

eligible beneficiaries in 2020. Pennsylvania had 10 D-SNPs, and the state limited

enrollment in the state’s three aligned D-SNPs to full-benefit, dual-eligible beneficiaries in

2019. The state’s other seven non-aligned D-SNPs could enroll partial-benefit, dual-

eligible beneficiaries.

Page 15 GAO-20-319 Dual-Eligible Special Needs Plans

beneficiaries to make more informed decisions around aligned

enrollment.

Encouraging D-SNP marketing to better support informed

beneficiary decision-making. Five of the selected states (Arizona, New

Jersey, Pennsylvania, Tennessee, and Virginia) took steps to encourage

D-SNP marketing to support informed beneficiary decision-making in

2019. For example, Arizona and Pennsylvania encouraged D-SNPs to

directly market themselves to beneficiaries in the D-SNP’s aligned

Medicaid MCO, in order to promote aligned enrollment. In addition, New

Jersey Medicaid officials told us they review D-SNP marketing and work

directly with D-SNPs to develop standard marketing language. In

particular, the officials said some D-SNPs had marketed themselves as

offering certain extra benefits, but those benefits were already a standard

part of the state’s Medicaid package. The officials said they worked with

the D-SNPs to correct the marketing, and they also developed standard

language for marketing in the state. This can help reduce beneficiary

confusion when making enrollment decisions.

Automatically assigning certain beneficiaries to plans with aligned

enrollment. Four selected states (Arizona, Florida, Pennsylvania, and

Tennessee) allowed automatic assignment of certain beneficiaries to

plans with aligned enrollment in 2019. For example, Arizona,

Pennsylvania, and Tennessee allowed default enrollment by which

certain Medicaid beneficiaries were automatically assigned to aligned D-

SNPs.

Under federal rules, beneficiaries have the opportunity to opt out

prior to being default enrolled and select a different source of Medicare

coverage; they also have the opportunity to disenroll within the first 90

days after default enrollment and select a different source of Medicare

coverage.

In addition, Florida and Pennsylvania automatically assigned certain dual-

eligible beneficiaries to aligned Medicaid MCOs. For example, Florida law

requires the state Medicaid agency to automatically assign certain D-SNP

enrollees to aligned MLTSS plans when beneficiaries become eligible for

Virginia Medicaid officials told us the state will allow D-SNPs that receive CMS approval

to start using default enrollment in 2020. In addition, CMS officials told us other states are

considering using default enrollment in the future.

Page 16 GAO-20-319 Dual-Eligible Special Needs Plans

long-term services and supports and have not voluntarily chosen an

MLTSS plan.

Engaging counselors to assist beneficiaries with aligned enrollment

decisions. Two of the seven selected states (Arizona and Pennsylvania)

engaged enrollment counselors to encourage aligned enrollment in 2019.

For example, Arizona’s state Medicaid office works with the state’s Aging

and Disability Resource Center and State Health Insurance Assistance

Program counselors to increase beneficiary understanding of aligned

enrollment and options to enroll in aligned plans. In 2019, Pennsylvania’s

contracts with D-SNPs required collaboration between the D-SNPs and

the state’s independent enrollment broker that assists beneficiaries with

Medicaid enrollment.

In addition to there being variation in the selected states’ use of

approaches to encourage aligned enrollment, the proportion of D-SNP

enrollees with aligned enrollment varied from 20 percent in Pennsylvania

to 100 percent in New Jersey among the selected states that were able to

provide data for 2019. (See fig. 3.) There can be multiple reasons for the

varied levels of aligned enrollment between D-SNPs and MLTSS. For

example, Arizona recently entered into new Medicaid MCO contracts, and

this resulted in changes to the parts of the state served by each Medicaid

MCO. According to state Medicaid officials, these new contracts

somewhat reduced the extent of aligned enrollment.

Fla. Stat. Ann. § 409.984 (2019).

According to Pennsylvania Medicaid officials, the state relied on its State Health

Insurance Assistance Program to educate beneficiaries about Medicare coverage. The

state’s contract also required the independent enrollment broker to be familiar with the

State Health Insurance Assistance Program and provide the program’s contact

information when appropriate.

Page 17 GAO-20-319 Dual-Eligible Special Needs Plans

Figure 3: Dual-Eligible Beneficiaries in Medicaid Managed Care in Selected States,

by Enrollment, 2019

Note: We considered aligned enrollment to occur when a dual-eligible beneficiary—a beneficiary who

qualifies for Medicare and Medicaid—is enrolled in a D-SNP and Medicaid managed care

organization (MCO) that are offered by the same or related companies, and the MCO covers long-

term services and supports. For Arizona, the figure also includes the number of dual-eligible

beneficiaries with aligned enrollment between D-SNPs and Medicaid MCOs that cover certain

behavioral health services, in addition to Medicaid MCOs that cover long-term services and supports.

Pennsylvania and Virginia data are from July 2019, Tennessee and New Jersey data are from August

2019, and Arizona data are from September 2019. Kansas and Florida could not provide data.

New Jersey limits enrollment in D-SNPs to beneficiaries who choose aligned Medicaid MCOs, but

could not provide data on the number of dual-eligible beneficiaries not enrolled in D-SNPs.

Medicaid officials in the seven selected states described various

challenges with aligned enrollment. The most common challenge

mentioned was difficulty using D-SNP data to implement and evaluate

aligned enrollment policies. Medicaid officials in the selected states told

us many of these challenges require ongoing monitoring and

collaboration with CMS and the companies offering D-SNPs.

Difficulty using data to implement and evaluate aligned enrollment.

Medicaid officials in six of the selected states (Florida, Kansas, New

Medicaid Officials in

Selected States

Described Challenges

with Aligned

Enrollment

Page 18 GAO-20-319 Dual-Eligible Special Needs Plans

Jersey, Pennsylvania, Tennessee, and Virginia) told us that using D-SNP

and Medicare data to implement and evaluate aligned enrollment policies

can be difficult. For example, Tennessee Medicaid officials told us that

getting the data from CMS needed for default enrollment was a challenge.

In particular, they said that, when the state was first starting to implement

default enrollment, they had challenges with getting data from CMS in a

timely fashion to identify which Medicaid beneficiaries were about to

become dually eligible for Medicare, particularly those with eligibility due

to disability.

This meant that the state could not provide D-SNPs with

the information needed by the D-SNPs to send notices to those

beneficiaries in the required time frame.

CMS officials also

acknowledged that its data do not always identify individuals becoming

eligible for Medicare early enough for D-SNPs to send notices in the

required time frame. Tennessee Medicaid officials told us that CMS has

worked with the state on this issue and it has now become easier for the

state to receive the needed data. Furthermore, CMS and its Integrated

Care Resource Center have also developed materials and, according to

CMS officials, provided ongoing technical assistance for states on

accessing data for default enrollment and other aspects of

implementation of aligned enrollment.

Medicaid officials in Virginia and New Jersey described related

challenges with using D-SNP data to determine whether their policies

work. Virginia Medicaid officials told us that it can be difficult to evaluate

the health benefits of aligned enrollment, because data on quality

States must provide the information necessary for D-SNPs to identify individuals who

are in their initial coverage election period and, therefore, may be default enrolled into the

plan. See 42 C.F.R. § 422.66(c)(2)(i)(B) (2019).

D-SNPs must send notices to individuals qualifying for default enrollment at least 60

days prior to enrollment. The notice is required to include information on the beneficiary’s

ability to opt out of the D-SNP, among other information. See 42 C.F.R. § 422.66(c)(2)(iv)

(2019).

For example, see CMS, Aligning Coverage for Dually Eligible Beneficiaries Using

Default and Passive Enrollment (July 2018); Integrated Care Resource Center, CMS Files

that Provide Data to States on Upcoming Medicare Eligibility (Integrated Care Resource

Center, July 2018); and Danielle Chelminsky, How States Can Better Understand their

Dually Eligible Beneficiaries: A Guide to Using CMS Data Resources (Integrated Care

Resource Center, Nov. 2018).

Page 19 GAO-20-319 Dual-Eligible Special Needs Plans

measures can span multiple states.

Specifically, one of the state’s D-

SNPs operates in multiple states and therefore reports health outcome

data to CMS for its entire service area.

Virginia Medicaid officials told us

they are not able to separate data for Virginia residents from those of

other states. As a result, they said they currently cannot determine the

effect of their aligned enrollment policies, and they plan to require the D-

SNP to report Virginia-specific quality data in the future. New Jersey

Medicaid officials described a challenge with receiving the relevant data

to evaluate health outcomes for dual-eligible beneficiaries with aligned

enrollment. The state has CMS approval to receive Medicare data directly

from CMS. However, as of November 2019, the state’s data vendor was

not in compliance with federal Medicare data security requirements for

storing certain data, which meant that the state could not accept the

Medicare data.

The Bipartisan Budget Act of 2018 encourages CMS to require reporting

of MA quality measures, including D-SNP quality measures, at the plan

level.

However, CMS has identified several challenges to developing

such a requirement. One challenge CMS has identified is that about two-

thirds to three-quarters of D-SNPs would not have reliable ratings, for

The data on quality measures come from two data sets. The first data set is the

Healthcare Effectiveness Data and Information Set, which measures plan performance on

clinical processes and intermediate clinical outcomes. For example, it measures the

percentage of beneficiaries who have discussed the risk of falling with their health care

provider and who have received certain cancer screenings, among other things. The

second data set is the Consumer Assessment of Healthcare Providers and Systems. The

surveys provide information on respondents’ personal experiences interacting with their

health plan and health care providers.

All MA organizations, including D-SNPs, have contracts with CMS, and a single contract

can pertain to more than one MA plan. For example, a single contract between an MA

organization and CMS can pertain to both special needs plans and non-special needs

plans, or a single contract can pertain to plans in multiple states. CMS generally requires a

MA organization to report quality data for each contract and not for the separate plans, if

any, under each contract. The Healthcare Effectiveness Data and Information Set includes

certain measures that are collected at the plan level for D-SNPs and other special needs

plans only, and these plan-level data are publicly available. These measures include

advanced care planning, functional status assessment, medication review, and pain

assessment, and they are aggregated to the contract level with weighting based on the

enrollment of each special needs plan.

Pub. L. No. 115-123, § 50311(d), 132 Stat. 64, 198 (codified as amended at 42 U.S.C.

§§ 1395w-23(o)(6), (7)).

Page 20 GAO-20-319 Dual-Eligible Special Needs Plans

example, because those plans had too few participants in the survey.

Another challenge CMS has identified is the additional complexity and

administrative burden for plans completing this reporting. As of December

2019, CMS officials told us they are continuing to work to determine the

best reporting level for each quality measure. They also plan to collect

additional feedback from stakeholders and a technical expert panel.

Difficulties with information dual-eligible beneficiaries receive about

Medicare enrollment choices. Medicaid officials in five of the selected

states (Kansas, New Jersey, Pennsylvania, Tennessee, and Virginia) told

us they have experienced challenges in ensuring that beneficiaries

receive quality information about their Medicare enrollment choices. For

example, in 2019, Pennsylvania’s contracts with D-SNPs required

collaboration between the D-SNPs and the state’s independent

enrollment broker that assists beneficiaries with Medicaid enrollment.

However, Pennsylvania Medicaid officials told us the state’s independent

enrollment broker did not have the capacity to provide this type of

assistance in addition to its primary responsibility of assisting

beneficiaries with Medicaid enrollment.

As another example, Virginia Medicaid officials told us they have faced

challenges using state D-SNP contracts to regulate D-SNP marketing.

They told us that certain provisions in the state’s contracts with D-SNPs

were intended to regulate the extent of D-SNP marketing in 2019. In

particular, each D-SNP was supposed to only market to beneficiaries

enrolled in that D-SNP’s aligned Medicaid MCO, which was intended to

increase the extent of aligned enrollment in the state. However, state

Medicaid officials told us that D-SNPs had different interpretations of the

contract provisions, and one D-SNP had billboards and television

advertisements available to the general public. Due to the difficulty of

enforcement, among other reasons, Virginia Medicaid officials told us

they chose to not include these provisions in the D-SNP contracts for

2020.

Through the Integrated Care Resource Center, CMS has developed

materials describing how states can regulate D-SNP marketing in their

contracts with D-SNPs, and the agency reviews and may disapprove D-

For example, there must be at least 11 respondents, among other criteria, for reliable

scoring of measures from the Consumer Assessment of Healthcare Providers and

Systems. According to CMS’s analyses, which it summarized in the preamble to the final

rule for 2019, this threshold meant that measures could not be reported at the plan level

for two-thirds of D-SNPs. 83 Fed. Reg. 16,440, 16,526 (April 16, 2018).

Page 21 GAO-20-319 Dual-Eligible Special Needs Plans

SNP marketing materials that do not follow federal requirements. CMS

officials also told us they make themselves available to states to explain

how to include marketing restrictions in the contracts that states have with

D-SNPs.

Limits of staff knowledge. Medicaid officials in four of the selected

states (Florida, Kansas, New Jersey, and Pennsylvania) told us that

limited staff knowledge of Medicare presents a challenge. For example,

Medicaid officials in Kansas told us only one or two staff in the state’s

Medicaid agency are knowledgeable about Medicare and would have the

knowledge to implement aligned enrollment approaches. Similarly,

Medicaid officials in Florida said they only recently learned about one of

the approaches for encouraging aligned enrollment, which is that the

state can decline to contract with certain D-SNPs. In addition, New Jersey

and Pennsylvania Medicaid officials told us staff knowledge of Medicare

is limited and that they would like to increase their level of knowledge as

they continue to foster aligned enrollment.

Competition from look-alike MA plans targeted to dual-eligible

beneficiaries. Medicaid officials in four of our selected states (Arizona,

Pennsylvania, Tennessee, and Virginia) identified certain MA plans that

are so-called “look-alike” plans to the D-SNPs, which create a potential

challenge to fostering aligned enrollment.

According to CMS, look-alike

plans are MA plans that are designed for and marketed exclusively to

dual-eligible beneficiaries, but that are not D-SNPs. Therefore, look-alike

plans do not need a contract with the state to operate and do not have to

comply with state approaches that foster aligned enrollment.

Medicaid officials from our selected states and the Medicare Payment

Advisory Commission gave examples of the impact of look-alike plans.

For example, Tennessee Medicaid officials told us that dual-eligible

beneficiaries in look-alike plans do not receive care coordination between

Medicare and Medicaid, in contrast with dual-eligible beneficiaries in D-

SNPs, which are required to provide such coordination. In addition,

Arizona Medicaid officials told us that look-alike plans have affected

There is no single definition of what constitutes a look-alike plan. The Medicare Payment

Advisory Commission has defined a look-alike plan as a traditional MA plan that had drug

coverage and that had dual-eligible beneficiaries as the majority of its enrollees. It found

that the number of plans meeting this definition grew from 44 in 2017 to 95 in 2019.

Medicare Payment Advisory Commission, Report to the Congress: Medicare and the

Health Care Delivery System (Washington, D.C.: June 14, 2019), 441-443.

Page 22 GAO-20-319 Dual-Eligible Special Needs Plans

levels of aligned enrollment in the state. Similarly, according to the

Medicare Payment Advisory Commission, look-alike plans can undermine

states’ efforts to develop D-SNPs that integrate Medicare and Medicaid

by encouraging dual-eligible beneficiaries to instead enroll in look-alike

plans.

CMS has also identified look-alike plans as a challenge and is

considering some steps in response. In 2018, CMS revised its marketing

guidelines to prohibit look-alike plans from marketing themselves as

designed for dual-eligible beneficiaries and as having a relationship with

the state Medicaid agency. In its April 2019 policy update for MA plans,

CMS said that look-alike plans enable companies to offer plans that

circumvent state and federal requirements for D-SNPs, which undermines

efforts to improve the quality of care.

In February 2020, CMS published

a proposed rule that, if finalized, would prohibit the offering of MA plans

whose enrollment of dual-eligible beneficiaries exceeds specific projected

or actual enrollment thresholds in states with a D-SNP. According to

CMS, this would prevent look-alikes from undermining the statutory and

regulatory framework for D-SNPs.

Extent of overlapping provider networks. Medicaid officials in two of

our selected states (Pennsylvania and Tennessee) reported challenges

with aligned D-SNPs and Medicaid MCOs that do not have completely

overlapping networks of relevant providers.

That is, even though the D-

SNP and Medicaid MCO are offered by the same or related companies,

certain providers may be in only the D-SNP network or only the Medicaid

MCO network—but not both. For example, representatives from a

beneficiary group in Pennsylvania told us that a dual-eligible beneficiary’s

provider may be in the Medicaid MCO network, but not the D-SNP

network. This can disrupt that beneficiary’s continuity of care if he or she

is default enrolled into the D-SNP. There are no requirements for the

Medicare Payment Advisory Commission, Report to the Congress: Medicare and the

Health Care Delivery System (Washington, D.C.: June 14, 2019), 441.

Centers for Medicare & Medicaid Services, Announcement of Calendar Year (CY) 2020

Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment

Policies and Final Call Letter (Apr. 1, 2019).

In the preamble to the proposed rule, CMS proposed a threshold of 80 percent and

sought comment on other enrollment thresholds. See 85 Fed. Reg. 9,002, 9,021-23

(proposed Feb. 18, 2020).

A third state (New Jersey) told us they have received a few complaints about this issue,

but that it is not a common issue.

Page 23 GAO-20-319 Dual-Eligible Special Needs Plans

state or D-SNP to ensure that a beneficiary’s primary care provider is in

the D-SNP into which he or she is default enrolled. CMS’s model for the

notice sent to beneficiaries identified for default enrollment suggests (but

does not require) that the D-SNP include information on whether or not

the beneficiary’s primary care provider is in the D-SNP’s network.

CMS officials said they did not know of any complaints the agency has

received on the issue. They also said they have not analyzed how the

provider network of a D-SNP compares to the provider network of its

aligned Medicaid MCO. Furthermore, in the preamble to the default

enrollment final rule issued in April 2018, CMS said that it did not include

any criteria related to provider networks, but that network adequacy

requirements would apply and states can use their contracts with D-SNPs

to create requirements for continuity of care. One state that does this is

Tennessee, which specifically requires D-SNPs to develop provider

networks that have substantial overlap with the provider network of their

aligned Medicaid MCOs. The state also requires D-SNPs to ensure

continuity of care for beneficiaries who have been default enrolled. For

example, Tennessee Medicaid officials said that if a beneficiary who has

been default enrolled has a long-standing primary care provider with the

D-SNP’s aligned Medicaid MCO, the state requires the D-SNP to

continue covering services by that provider for at least 30 days and to

attempt to contract with the provider.

CMS has assisted states with aligned enrollment. In particular, CMS has

provided technical assistance to states on implementing the various

approaches that encourage aligned enrollment. One way that CMS has

done this is through its Integrated Care Resource Center, which has

developed materials on how states can use their contracts with D-SNPs

to align enrollment and promote integration.

The Integrated Care

Resource Center has also facilitated peer-to-peer assistance between

states. For example, Integrated Care Resource Center officials said they

facilitated conversations and assistance between state Medicaid officials

in New Jersey and Pennsylvania on D-SNP marketing. Medicaid officials

in six of our selected states said they had utilized CMS’s technical

assistance, and they had overall positive views of CMS’s assistance.

CMS reviews some aspects of the contracts between states and D-SNPs,

including checking that the contracts include the eight required elements.

For example, see James Verdier, et al., State Contracting with Medicare Advantage

Dual Eligible Special Needs Plans: Issues and Options (Integrated Care Resource Center,

November 2016).

CMS Has Assisted

States with Aligned

Enrollment, but Lacks

Quality Information on

the Experience of

Beneficiaries Whose

Aligned Enrollment

Was Due to Default

Enrollment

Page 24 GAO-20-319 Dual-Eligible Special Needs Plans

According to CMS officials, in these reviews, CMS does not collect

information regarding whether states are imposing requirements

pertaining to aligned enrollment. CMS’s program audits of MA plans

similarly do not include reviews of such state requirements pertaining to

aligned enrollment.

CMS has a direct role with one aspect of aligned enrollment: default

enrollment. In particular, CMS approves D-SNPs to receive beneficiaries

through default enrollment, and it processes the enrollment transactions

of beneficiaries being default enrolled.

• D-SNPs’ approval for default enrollment: Before a D-SNP can

receive beneficiaries through default enrollment, it must submit a

proposal to CMS for approval. CMS reviews the D-SNP’s proposal

and checks that the D-SNP meets an established list of requirements

outlined in regulation. Among other requirements, the D-SNP must

demonstrate it has the state’s support for default enrollment and that

the required elements have been included in its template for the

notice that is sent to beneficiaries identified for default enrollment.

CMS also checks that the D-SNP is not facing any CMS enrollment

sanctions and that the D-SNP has a quality rating of three or more

stars.

CMS grants approval for up to 5 years if it determines the D-

SNP meets these requirements.

• Default enrollment transactions: CMS processes the enrollment

transactions of dual-eligible beneficiaries being default enrolled, and it

tracks these transactions in a monthly report. The monthly report lists

the total number of beneficiaries identified for default enrollment for

each applicable D-SNP, and the report lists numbers for certain

subsets of beneficiaries who were ultimately not default enrolled.

These subsets include beneficiaries who opted out prior to being

default enrolled and beneficiaries whose default enrollment was not

allowed by CMS for various reasons.

Despite its direct role in default enrollment, CMS lacks quality information

on the experiences of dual-eligible beneficiaries after they are default

enrolled. This is inconsistent with federal internal control standards on

information and communication, which state that management should use

According to CMS officials, the agency does not collect information related to aligned

enrollment in its oversight of state Medicaid managed care programs.

CMS has a 5-star quality rating system—with 5 stars indicating the highest quality—for

MA plans as a tool to help beneficiaries make enrollment decisions.

Page 25 GAO-20-319 Dual-Eligible Special Needs Plans

quality information to achieve the agency’s objectives.

In particular, the

monthly reports on enrollment transactions do not include data on the

extent to which dual-eligible beneficiaries choose to disenroll after being

default enrolled. Although the reports include data on the number of

beneficiaries who opt out prior to being default enrolled (which CMS

officials said was low), they do not include data on beneficiaries who

choose to disenroll in the first 90 days after being default enrolled.

This

90-day time frame for disenrollment is specified by federal regulation, and

beneficiaries may choose to disenroll for various reasons.

For example,

one reason for disenrollment given by one beneficiary group we

interviewed is that some beneficiaries may not realize they have been

default enrolled into a D-SNP until they next see their provider, and that

provider may not be in the D-SNP’s provider network. They said that

beneficiaries may not have seen the notice or other information about

being default enrolled, or they may not have understood the information.

In addition, CMS cannot systematically review beneficiary complaints for

trends or concerns related to default enrollment. Dual-eligible

beneficiaries, like other Medicare beneficiaries, can submit complaints to

CMS. These complaints are entered in the agency’s complaint tracking

module, and D-SNP account managers, like other MA plan account

managers, are responsible for monitoring complaints.

CMS officials said

that the D-SNP account managers have not identified any trends or

concerns about default enrollment. However, CMS officials said default

enrollment is not tracked as a distinct category in the complaint tracking

module, and the guidance on monitoring complaints that is provided to

the D-SNP account managers does not direct them to look for issues

explicitly related to default enrollment. Quality information on the

experiences of dual-eligible beneficiaries after they are default enrolled

would allow CMS to better identify the extent to which these beneficiaries

See GAO-14-704G.

According to CMS officials, approximately 6,300 beneficiaries were identified for default

enrollment from January 1 through August 1, 2019, and approximately 300 of those

beneficiaries opted out prior to being default enrolled through September 30, 2019. These

numbers include data on default enrollment for D-SNPs in six states and Puerto Rico.

Two selected states (Arizona and Tennessee) require D-SNPs to report the number of

beneficiaries who disenroll during the first 90 days after being default enrolled.

Account managers are the CMS officials responsible for overseeing the contracts

between the MA organization and CMS. A single contract can contain more than one MA

plan or D-SNP.

Page 26 GAO-20-319 Dual-Eligible Special Needs Plans

face challenges as a result of default enrollment and to determine how, if

at all, to address the challenges.

Future studies may provide CMS with additional information on

beneficiaries in D-SNPs with aligned enrollment, but that information will

not be available until 2022 or later. In particular, federal law directs the

Medicare Payment Advisory Commission, in consultation with the

Medicaid and CHIP Payment and Access Commission, to compare the

quality of the different types of D-SNPs, including those with aligned

enrollment, as well as comparing them to other types of plans.

The

commission is to develop an initial report by 2022 with subsequent

reports afterward.

Better care for dual-eligible beneficiaries is one of CMS’s strategic

initiatives, and the agency has supported states’ decisions to encourage

aligned enrollment in order to encourage better coordination of care.

However, CMS lacks quality information on the experiences of

beneficiaries who have aligned enrollment as the result of the use of

default enrollment. For example, CMS’s monthly reports on default

enrollment do not include data on beneficiaries who choose to disenroll

after being default enrolled. CMS lacks this information even though

selected states and others have reported challenges that could affect the

care received by those beneficiaries. Quality information on the

experiences of these dual-eligible beneficiaries would allow CMS to better

identify the extent to which beneficiaries are facing challenges as a result

of default enrollment and to determine how, if at all, to address those

challenges.

We are making the following recommendation to CMS:

The Administrator of CMS should take steps to obtain quality information

on the experiences of dual-eligible beneficiaries who have been default

enrolled into D-SNPs, such as by obtaining information about the extent

to which and reasons that beneficiaries disenroll from a D-SNP after

being default enrolled. (Recommendation 1)

We provided a draft of this report to the Department of Health and Human

Services (HHS) for comment. In its comments, reproduced in appendix I,

HHS concurred with our recommendation. HHS stated that it is committed

to increasing the number of dual-eligible beneficiaries in integrated care

42 U.S.C. § 1395w-28(f)(8)(E).

Conclusions

Recommendation for

Executive Action

Agency Comments

Page 27 GAO-20-319 Dual-Eligible Special Needs Plans

and that it supports states with these efforts, such as the use of aligned

enrollment. HHS also said that it has not identified any trends or areas of

concern in its monitoring of beneficiaries who opted out prior to being

default enrolled. In response to our recommendation, HHS stated it will

evaluate opportunities to obtain more information on dual-eligible

beneficiaries who disenroll from a D-SNP after being default enrolled.

HHS also provided technical comments, which we incorporated as

appropriate.

We are sending copies of this report to the appropriate congressional

committees, the Administrator of the Centers for Medicare & Medicaid

Services, and other interested parties. In addition, the report is available

at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact

me at (202) 512-7114 or [email protected]. Contact points for our

Offices of Congressional Relations and Public Affairs may be found on

the last page of this report. GAO staff who made key contributions to this

report are listed in appendix II.

James Cosgrove

Director, Health Care

Appendix I: Comments from the Department of

Health and Human Services

Page 28 GAO-20-319 Dual-Eligible Special Needs Plans

Appendix I: Comments from the Department

of Health and Human Services

Appendix I: Comments from the Department of

Health and Human Services

Page 29 GAO-20-319 Dual-Eligible Special Needs Plans

Appendix II: GAO Contact and Staff

Acknowledgments

Page 30 GAO-20-319 Dual-Eligible Special Needs Plans

James Cosgrove, (202) 512-7114 or [email protected]

In addition to the contact named above, Martin T. Gahart (Assistant

Director), Corissa Kiyan-Fukumoto (Analyst-in-Charge), Jason Coates,

Kelly Krinn, Virginia Lefever, Drew Long, Jennifer Rudisill, and Ethiene

Salgado-Rodriguez made key contributions to this report.

Appendix II: GAO Contact and Staff

Acknowledgments

GAO Contact

Staff

Acknowledgments

Related GAO Products

Page 31 GAO-20-319 Dual-Eligible Special Needs Plans

Medicare and Medicaid: Additional Oversight Needed of CMS’s

Demonstration to Coordinate the Care of Dual-Eligible Beneficiaries.

GAO-16-31. Washington, D.C.: December 18, 2015.

Disabled Dual-Eligible Beneficiaries: Integration of Medicare and

Medicaid Benefits May Not Lead to Expected Medicare Savings.

GAO-14-523. Washington, D.C.: August 29, 2014.

Medicare and Medicaid: Consumer Protection Requirements Affecting

Dual-Eligible Beneficiaries Vary across Programs, Payment Systems, and

States. GAO-13-100. Washington, D.C.: December 5, 2012.

Medicare Special Needs Plans: CMS Should Improve Information

Available about Dual-Eligible Plans’ Performance. GAO-12-864.

Washington, D.C.: September 13, 2012.

Medicare and Medicaid: Implementing State Demonstrations for Dual

Eligibles Has Proven Challenging. GAO/HEHS-00-94. Washington, D.C.:

August 18, 2000.

Related GAO Products

(103367)

The Government Accountability Office, the audit, evaluation, and investigative

arm of Congress, exists to support Congress in meeting its constitutional

responsibilities and to help improve the performance and accountability of the

federal government for the American people. GAO examines the use of public

funds; evaluates federal programs and policies; and provides analyses,

recommendations, and other assistance to help Congress make informed

oversight, policy, and funding decisions. GAO’s commitment to good government

is reflected in its core values of accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is

through our website. Each weekday afternoon, GAO posts on its website newly

released reports, testimony, and correspondence. You can also subscribe to

GAO’s email updates to receive notification of newly posted products.

The price of each GAO publication reflects GAO’s actual cost of production and

distribution and depends on the number of pages in the publication and whether

the publication is printed in color or black and white. Pricing and ordering

information is posted on GAO’s website, https://www.gao.gov/ordering.htm.

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, MasterCard,

Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or Email Updates. Listen to our Podcasts.

Visit GAO on the web at https://www.gao.gov.

Contact FraudNet:

Website: https://www.gao.gov/fraudnet/fraudnet.htm

Automated answering system: (800) 424-5454 or (202) 512-7700

Orice Williams Brown, Managing Director, William[email protected], (202) 512-4400,

U.S. Government Accountability Office, 441 G Street NW, Room 7125,

Washington, DC 20548

Chuck Young, Managing Director, y[email protected], (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149

Washington, DC 20548

James-Christian Blockwood, Managing Director, spel@gao.gov, (202) 512-4707

U.S. Government Accountability Office, 441 G Street NW, Room 7814,

Washington, DC 20548

GAO’s Mission

Obtaining Copies of

GAO Reports and

Testimony

Order by Phone

Connect with GAO

To Report Fraud,

Waste, and Abuse in

Federal Programs

Congressional

Relations

Public Affairs

Strategic Planning and

External Liaison

Please Print on Recycled Paper.