Newsletter

Policy Watch

For years, long-term services and supports (LTSS) providers have operated primarily as Medicaid service providers. That model is beginning to change. As CMS accelerates Medicare-Medicaid integration through Dual Eligible Special Needs Plans (D-SNPs) and other initiatives, health plans are increasingly looking for providers that can contribute to care coordination, quality outcomes, and population health management—not simply deliver authorized services.

The direction of travel is becoming increasingly clear. CMS continues to move aggressively toward greater integration of Medicare and Medicaid for individuals who are dually eligible for both programs. While much of the policy discussion focuses on health plans and regulators, the implications for LTSS providers may ultimately be more significant than for any other segment of the healthcare system.

Opening Context

Dual eligible beneficiaries often navigate two separate systems with different rules, financing structures, provider networks, and care management approaches. The resulting fragmentation can create confusion for consumers, administrative burden for providers, and inefficiencies for taxpayers.

Federal policymakers increasingly view integration as the solution. D-SNPs were originally designed to bridge these gaps, but today’s regulatory environment is focused on something much broader: creating a healthcare system in which Medicare and Medicaid services function with greater coordination, accountability, and alignment around outcomes.

Federal Developments and What They Mean for Providers

Several federal developments are accelerating the movement toward integration.

CMS has made clear that greater alignment between Medicare and Medicaid is a long-term policy objective. The agency’s actions increasingly support a future where a significantly larger share of dual eligible individuals receive services through highly integrated care models. For providers, this means future procurements, network requirements, and care delivery expectations are likely to become increasingly coordinated across Medicare and Medicaid.

CMS also continues to strengthen requirements around highly integrated D-SNP models, including FIDE-SNPs and HIDE-SNPs. Health plans are investing heavily in these products and increasingly evaluating provider networks through an integrated care lens. Providers that can support care coordination and measurable outcomes will have a competitive advantage as these models expand.

At the same time, Medicare Advantage supplemental benefits continue to grow in areas that overlap with traditional LTSS functions, including transportation, meals, caregiver supports, home modifications, and in-home services. These developments create opportunities for community-based providers to expand partnerships and diversify revenue streams.

Finally, CMS continues to prioritize health equity and the reduction of health-related social disparities. Community-based providers are uniquely positioned to support these objectives because they often have the closest and most consistent relationships with beneficiaries in their homes and communities.

Policy and Market Analysis

The rationale behind integration is straightforward. Dual eligible individuals often require a combination of medical care, behavioral health services, LTSS, transportation, housing supports, and caregiver assistance. When these services operate independently, avoidable hospitalizations, unnecessary institutional placements, and poor consumer experiences become more common.

As integration expands, health plans are increasingly looking beyond traditional service delivery. They are seeking provider partners that can help improve outcomes, reduce avoidable utilization, support transitions of care, and provide meaningful insight into member needs that may not be visible through claims data alone.

This represents both opportunity and risk. Providers that successfully demonstrate their value within an integrated care framework may become increasingly important strategic partners. Organizations that remain focused solely on task-based service delivery may find themselves under growing competitive pressure.

Operational Implications for Providers

The providers most likely to thrive in this environment will be those that position themselves as essential members of the care team. Home care agencies, adult day programs, personal assistance providers, and other community-based organizations often have more frequent contact with beneficiaries than physicians, hospitals, or health plans.

That proximity creates opportunities to identify risks early, address social determinants of health, prevent avoidable crises, and support successful transitions between care settings.

As integration continues, providers should expect increased emphasis on data sharing, interdisciplinary care planning, quality measurement, care transition support, and collaboration with plan-based care managers. Organizations that invest in these capabilities today will be better positioned for future contracting opportunities and value-based payment arrangements.

Strategic Priorities for LTSS Providers

Providers do not need to wait for future regulations to begin preparing.

• Strengthen care coordination and interdisciplinary care planning capabilities.
• Improve data collection and reporting systems that demonstrate measurable outcomes.
• Build stronger relationships with D-SNPs, Medicare Advantage organizations, and Medicaid managed care plans.
• Evaluate opportunities to participate in value-based purchasing and outcome-driven contracting models.
• Document and communicate your organization’s role in reducing hospitalizations, preventing institutionalization, and addressing social determinants of health.

The organizations that can clearly demonstrate their contribution to member outcomes will be best positioned as integrated care models continue to expand.

Data Point

Approximately 12 million Americans are dually eligible for Medicare and Medicaid. While they represent a relatively small share of enrollment, they account for a disproportionate share of healthcare spending because of the complexity of their medical, behavioral health, and LTSS needs.