MEDICARE ADVANTAGE SPECIAL NEEDS PLAN

1. MEDICARE ADVANTAGE SPECIAL NEEDS PLAN AN OVERVIEW

2. SNP Statutory Authority • Established by Section 231 of the Medicare Modernization Act of 2003 • Exclusively or disproportionately serve beneficiaries who are institutionalized or eligible for equivalent level of care, dually eligible for Medicare and Medicaid and those with severe or disabling chronic conditions • Authority to limit enrollment to special needs beneficiaries expires December 31, 2009

3. SNP Legislative Intent • To improve quality and cost outcomes for high-risk and vulnerable Medicare beneficiaries by providing; • Authority to target and specialize in care of high-risk beneficiaries • Vehicle for specialty demonstrations to obtain permanent MA authority and replicate program innovations • Platform for integrating Medicare and Medicaid for dually eligible beneficiaries

4. SNP Types • Institutional • MA beneficiaries who reside in a long-term care facility • MA beneficiaries living in the community who require an institutional level of care based on State approved assessment • Dual Eligible • MA beneficiaries who are dually eligible for Medicare and Medicaid • Chronic Condition • MA beneficiaries with severe or disabling chronic conditions

5. SNP Program Status • As of May 2008, close to 1.2 million Medicare beneficiaries were enrolled in SNPs offered by 160 MA companies that collectively offer 769 benefit options • Dual SNP 844,010 • Chronic SNP 188,679 • Institutional SNP 133,982

6. SNP Program Status (cont’d) • Nearly 50% of MA contracts include at least one SNP • SNP enrollment accounted for about 11% of overall MA enrollment as of July 2007 • As of November 2007, about 50% of SNP enrollment was concentrated in 9 states and another 23% were in Puerto Rico

7. SNP Program Status (cont’d) • Congress passed legislation in December 2007 placing a moratorium on service area expansion of existing SNPs and new SNP applications • Congress has not passed legislation extending SNP authority beyond December 31, 2009

8. SNP Provisions • Must offer all MA services, including Part D drug benefits • Are expected to provide specialized benefits and services consistent with the needs of their target population • Paid using the same payment methodology used for standard MA plans

9. SNP Provisions (cont’d) • Institutional and dual SNPs have continuous enrollment. There is a “one time” special election period per year for beneficiaries who become eligible to join a Chronic Condition SNP • SNPs serving duals not mandated to have state contract for Medicare/Medicaid coordination

10. SNP Success Factors • Program stability • Congressional action needed to extend authority • Fair and appropriate payment • Align SNP reimbursement with specialization requirements • Integration of Medicare and Medicaid • More work needed for current demonstrations to transition into SNP programs and replication • Appropriate quality measures • CMS and NCQA are working on SNP specific performance measures

11. SNP Contracting Considerations • Contracts • Exclusive or Non-exclusive • Rates and payment terms • Additional benefits provided • Integration of Medicare and Medicaid • Medicare Part D • What PBM does SNP use • What drugs are covered under formulary • Care coordination • Nurse practitioners on site • Telephonic

12. SNP Contracting Considerations (cont’d) • Preauthorization • Onsite by nurse practitioner • Telephonic • Is facility Medical Director contracted with SNP? • How does SNP enroll members? • Dedicate sales person • Agents • Does insurance company own other MA products?

13. Contact For QuestionsTom C. CobleHMC of Oklahoma1908 12th Avenue N.W., Ste BArdmore, Oklahoma 73401Telephone: 580-223-8805tom_coble@hotmail.com