Health Plans: Unintended Consequences

John Baackes, CEO of Senior Whole Health in Cambridge, MA, which offers SNPs to 5,400 dual eligibles in Massachusetts and 700 in New York, says his company expects a 2% cut in revenue from its Massachusetts program and between 4% and 5% in New York. He believes the company can weather the cuts by adjusting expenses and making changes to its care management programs, reviewing its relationships with vendors, and possibly implementing more prior authorization.

But the payment cuts could just be the start of a difficult year for SNPs, which are set to end by 2011 unless Congress reauthorizes the program.

"Even if Congress reauthorizes the program, we may see health plans getting out of the SNP market for a variety of reasons," says Miley, citing lower reimbursements and increased regulatory costs, which "could make continuation of SNPs unfeasible for some health plans."

Though SNP enrollments are a small percentage of Medicare beneficiaries, Miley suggests that cutting the program could cause a ripple effect to state Medicaid budgets, which are already overburdened.

"If SNPs are eliminated, these members may be moved back to Medicaid, which could challenge already strained state budgets," says Miley.

Pushing SNP beneficiaries into Medicare FFS could also affect nursing homes and hospitals. Baackes says SNPs' care management programs and support services have reduced beneficiaries? admission into nursing homes, and LeMasurier says SNPs are able to reduce hospital readmissions. "[SNPs] are keeping them at home or in the community with a lower level of care, but better care actually," she says.

Beyond the affect on states, nursing homes, and hospitals, cutting SNPs would have the biggest impact on beneficiaries and their families. Without SNPs, they would go back into Medicare and Medicaid populations without the safety net of care coordination, say supporters.

"It would be a step backward. They will go back to FFS . . . then they will be lost again. Then, they will realize there was some real value to that program," says Baackes.

—Les Masterson