Minnesota

Minnesota Senior Health Options (MSHO) and Senior Care Plus (MSC+)

Minnesota Senior Health Options is a voluntary managed care program for dual-eligible (Medicare and Medicaid) seniors. It has been in operation since 1997 under the combined authority of Sections 1915(a) and (c) of the Social Security Act.

Minnesota Senior Care Plus began operation in 2005 as a successor to a prior 1115 Waiver program. It is a 1915(b) program operating in parallel with the state's 1915(c) Elderly Waiver. All Minnesota seniors receiving Medicaid services are enrolled in MSC+, except those dual eligibles opting to participate in MSHO.

The capitation rate structure for both programs is unlike that used in other states, in that the managed care organizations are paid only a Basic Care rate for institutionalized members, which is lower than the payments for community-resident members. Rather than paying plans a higher rate for institutionalized members, the state supplements the community-resident capitated payment to account for the risk that any given member will be institutionalized. After 180 days of institutionalization, the member's nursing home services become the responsibility of the state agency. The MCOs, therefore, is at risk for a large payout for any member who becomes instutionalized, and thus have a strong financial incentive to divert members from from nursing home placement and transition them back to the community as soon as possible.

There are essentially three tiers of payment: the Basic Care rate for all members regardless of LTSS utilization, which is supplemented by a Nursing Facility Add-On rate for all community residents and additionally supplemented by an Elderly Waiver Add-On rate for those receiving HCBS through the Waiver. These rates vary by gender, age group (65-74, 75-84, and 85+), and whether the person is also covered under Medicare.