Medicare advantage: understanding special needs plans

It has long been argued that managed care plans cherry picked members in an effort to encourage enrollment by healthy people who required fewer medical services. To prevent this practice, the federal government began to risk-adjust payments to managed care plans, based on the care needs of each member, thus removing any disincentives of enrolling sicker beneficiaries. The MMA gives plans the ability to focus on specific populations, so that services and systems can be tailored to those groups. Special Needs Plans (SNPs) can address 1 of 3 target populations: institutionalized beneficiaries, the dually eligibles, and beneficiaries with chronic or disabling conditions. By focusing on these groups, managed care plans can pull together unique systems of care to provide services in the most efficient and effective manner.