Special Needs Plans

What is a Special Needs Plan?

A special needs plan (SNP) is a Medicare Advantage (MA) coordinated care plan (CCP) specifically designed to provide targeted care and limit enrollment to special needs individuals.  A special needs individual could be any one of the following:

1. An institutionalized individual,
2. A dual eligible, or
3. An individual with a severe or disabling chronic condition, as specified by CMS.

A SNP may be any type of MA CCP, including either a local or regional preferred provider organization (i.e., LPPO or RPPO) plan, a health maintenance organization (HMO) plan, or an HMO Point-of-Service (HMO-POS) plan.  There are three different types of SNPs:

1. Chronic Condition SNP (C-SNP)
2. Dual Eligible SNP (D-SNP)
3. Institutional SNP (I-SNP)

Statutory and Regulatory History

The Medicare Modernization Act of 2003 (MMA) established an MA CCP specifically designed to provide targeted care to individuals with special needs.  In the MMA, Congress identified “special needs individuals” as:  1) institutionalized individuals; 2) dual eligibles; and/or 3) individuals with severe or disabling chronic conditions, as specified by CMS.  MA CCPs established to provide services to these special needs individuals are called “Specialized MA plans for Special Needs Individuals,” or SNPs. 42 CFR 422.2 defines special needs individuals and specialized MA plans for special needs individuals.  SNPs were first offered in 2006.  The MMA gave the SNP program the authority to operate until December 31, 2008.

The Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 subsequently extended the SNP program from December 31, 2008, to December 31, 2009, but imposed a moratorium that prohibited CMS from approving new SNPs after January 1, 2008.  Accordingly, CMS did not accept SNP applications in 2008 for contract year (CY) 2009.

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) lifted the Medicare, Medicaid, and SCHIP Extension Act of 2007 moratorium on approving new SNPs. MIPPA further extended the SNP program through December 31, 2010, thereby allowing CMS to accept MA applications for new SNPs and SNP service area expansions until CY 2010.  CMS accepted SNP applications from MA applicants for creating new SNPs and expanding existing CMS-approved SNPs for all three types of specialized SNPs in accordance with additional SNP program requirements specified in MIPPA.  CMS regulations that implement and further detail MIPPA application requirements for SNPs are located at 42 CFR 422.501-504.

Effective immediately upon its enactment in 2011, section 3205 of the Patient Protection and Affordable Care Act (“ACA”) extended the SNP program through December 31, 2013.  Section 607 of the American Taxpayer Relief Act of 2012 (ATRA) extended the SNP program through December 31, 2014.  Section 1107 of the Bipartisan Budget Act of 2013 (Pub. L. 113-67) extended the SNP program through December 31, 2015.  Section 107 of the Protecting Access to Medicare Act of 2014 extended the SNP program through December 31, 2016.  Most recently, section 206 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the SNP program through December 31, 2018.

Requirements and Payment Procedures

SNPs are expected to follow existing MA program rules, including MA regulations at 42 CFR 422, as modified by guidance, with regard to Medicare-covered services and Prescription Drug Benefit program rules.  All SNPs must provide Part D prescription drug coverage because special needs individuals must have access to prescription drugs to manage and control their special health care needs.  SNPs should assume that, if no modification is contained in guidance, existing Part C and D rules apply.  

Payment procedures for SNPs mirror the procedures that CMS uses to make payments to non-SNP MA plans.  SNPs must prepare and submit bids like other MA plans, and are paid in the same manner as other MA plans based on the plan’s enrollment and risk adjustment payment methodology.  All SNPs must abide by current CMS guidance on cost sharing requirements.

Site Overview

Specific information about each of the three SNP types (C-SNPs, D-SNPs, and I-SNPs), as well as information on the SNP Application and the SNP Model of Care, can be found by clicking the appropriate links on the left-hand side of this page.  In addition, there is a link below to the online Medicare Managed Care Manual, which contains Chapter 16b – CMS's current sub-regulatory guidance on SNPs.