Optimizing State Medicaid Agency Contracts with Dual Eligible Special Needs Plans (D-SNPs)

Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) are the primary vehicle for integrating Medicare and Medicaid services for individuals who are dually eligible for both programs. Approximately 5.3 million individuals were enrolled in a D-SNP across 45 states and the District of Columbia in 2023. All D-SNPs must have a contract with each state in which they operate. States have ample opportunities to leverage those State Medicaid Agency Contracts (SMACs) to require D-SNPs to perform certain activities that optimize Medicare and Medicaid integration for dually eligible enrollees. MACPAC and Mathematica partnered to examine how five states (California, the District of Columbia, Idaho, Minnesota, and New Jersey) with integrated care programs use their SMACs to promote integration, and which tools the states use for oversight of D-SNP compliance, performance, and quality.

The team reviewed the five states’ SMACs and interviewed Medicaid staff in these states, two D-SNP organizations that operate in these states, and representatives from the Centers for Medicare & Medicaid Services. Key findings are related to (1) SMAC provisions that states use to require D-SNPs to perform additional care coordination activities beyond those that are minimally federally required, (2) data and reporting requirements that help states monitor D-SNP performance and compliance, and (3) incentives and penalties states use to help enforce D-SNP compliance. This work informed two recommendations MACPAC made in the June 2024 report to Congress related to supporting states to optimize and oversee their SMACs.