MEDICARE ADVANTAGE SPECIAL NEEDS PLAN AN OVERVIEW

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

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

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

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

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

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

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

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

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

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

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?

Contact For Questions Tom C. Coble HMC of Oklahoma th Avenue N.W., Ste B Ardmore, Oklahoma Telephone: