How Dual-Eligible Special Needs Plans Affect Medicaid Spending
A study explores dual-enrollment in these plans—compared to other Medicare Advantage plans— impacts North Carolina’s Medicaid fee-for-service spending.
Dual-eligible individuals—those who are enrolled in both Medicare and Medicaid—help drive spending in both programs,1 especially since their care needs and social risk factors are associated with high care utilization.2
However, there are reportedly high costs among this segment of beneficiaries, due to in efficiencies surrounding “misaligned” incentives and issues with care coordination, including challenges with navigating two programs at the same time.3 For those reasons, 46 of the US states have Dual Special Needs Plans (D-SNPs), a Medicare Advantage (MA) plan tailored for dual-eligible beneficiaries that handles care coordination of services spanning both programs.
What makes D-SNPs different from other MA plans is that they must contract with state Medicaid agencies, and, during that process, provide a coordination framework that brings together responsibilities across Medicare and Medicaid; they also need to follow Centers for Medicare & Medicaid Services and state Medicaid agency-approved model of care.
Keeping this in mind, a cohort study published in JAMA Network Open4 sought to investigate whether being dual-enrolled compared to other (MA) plans impacts fee-for-service (FFS) spending in North Carolina.
The study consisted of full-benefit dual-eligible (FBDE) beneficiaries in the state who were enrolled in FFS Medicare for 365 days before enrolling in either a D-SNP or another MA plan between the years of 2014 and 2017. This was powered by fully-linked Medicare and North Carolina Medicaid claims data, which specified the payments from both payers before and after MA enrollment. Other types of tracked expenditures were the Medicaid-funded services and supplemental Medicaid payments for Medicare-funded services. The data were analyzed from August 2023 to November 2024.
Including the 8,869 D-SNP cohort participants, 4,762 (53.7%) of them were younger than 65 years of age, 5,833 (65.8%), were female, and 975 (11.0%) lived in rural areas. Following an inverse probability of treatment weighting process, qualities were similar among the comparison MA cohort of 4,389 participants (4,706 [53.2%] aged <65 years; 5,739 [64.9%] female; 971 [11.0%] rural).
No significant differences in Medicaid FFS spending per person-year (PPY) at baseline or differential change in the year after new enrollment (mean marginal effect, −$387 [95% confidence interval or CI, −$1274 to $501) between the groups were found. However, there were significant differences between the groups in the change in spending on long-term services and supports, along with a continued spending on community-based personal care services after new enrollment in D-SNPs. This was compared alongside reductions for other MA plans, resulting in a relative increase of $343 (95% CI, $147 to $539).
“In this cohort study of coordination-only D-SNPs in North Carolina, we found that D-SNPs were associated with differences in how Medicaid dollars were spent compared with other MA plans; however, if states seek to reduce or delay nursing home transitions, higher levels of integration may be needed,” recommended the study authors, who also noted that selection bias could potentially be an issue, given the fact that beneficiaries could choose to enroll or not enroll in D-SNPs. “State Medicare-Medicaid integration efforts may further incentivize D-SNPs to improve care coordination and outcomes for beneficiaries.”
References
1. Kaufman BG, Jones KA, Greiner MA, et al. Health care use and spending among need-based subgroups of Medicare beneficiaries with full Medicaid benefits. JAMA Health Forum. 2023;4(5):e230973. doi:10.1001/jamahealthforum.2023.0973
2. Centers for Medicare & Medicaid Services. CY 2023 Medicare Advantage and Part D Final Rule (CMS-4192-F). Accessed December 9, 2024. https://www.cms.gov/newsroom/fact-sheets/cy-2023-medicare-advantage-and-part-d-final-rule-cms-4192-f
3. Grabowski DC. Medicare and Medicaid: Conflicting incentives for Long-Term Care. Milbank Q. 2007;85(4):579-610. doi:10.1111/j.1468-0009.2007.00502.x
4. Coulibaly N, Jones KA, Smith VA, et al. Medicaid Spending in Coordination-Only Dual-Eligible Special Needs Plans. JAMA Netw Open. 2025;8(1):e2455461. doi:10.1001/jamanetworkopen.2024.55461
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