Navigating Dual-Eligibility: Regulatory Compliance and Strategic Opportunities for Health Plans

Navigating Dual-Eligibility: A Summary of Regulatory Compliance and Strategic Opportunities

Serving dual-eligible individuals—those who qualify for both Medicare and Medicaid—presents a significant regulatory challenge and a strategic growth opportunity for health plans. This high-need population of approximately 12.8 million Americans accounts for a disproportionate 34% of combined Medicare and Medicaid spending, making effective management a critical priority.

Understanding the Dual-Eligible Population

Dual-eligible beneficiaries are among the most complex populations in the U.S. healthcare system. They are often older, have multiple chronic conditions, and face significant social determinants of health (SDOH) that complicate care.

Demographics and Utilization Patterns

• High-Need Individuals: The population consists of 7.2 million low-income seniors and 4.8 million people with disabilities.

• Multiple Chronic Conditions: Nearly one-fifth of dual-eligibles have three or more chronic conditions.

• High Utilization of LTSS: Almost 40% use Long-Term Services and Supports (LTSS), such as institutional care or home and community-based services (HCBS).

• Frequent Hospitalizations: This group experiences frequent hospitalizations and emergency department visits, driving up costs.

• Behavioral Health and SDOH Needs: Dual-eligibles are disproportionately affected by factors like food insecurity, housing instability, and transportation issues.

Key Challenges in Serving Dual-Eligibles

• Fragmented care delivery across separate Medicare and Medicaid systems.

• Inconsistent benefit coordination between federal and state programs.

• Complex eligibility and enrollment processes that lead to high member churn.

• Limited member engagement due to socioeconomic barriers.

The Regulatory Landscape and D-SNP Market

The dual-eligible market has seen explosive growth, primarily through Dual-Eligible Special Needs Plans (D-SNPs). D-SNP enrollment grew from 2.2 million in 2018 to over 5.5 million in 2024. As regulations evolve, health plans must adapt to new integration and compliance mandates.

CMS Regulatory Changes: 2025–2027

Recent and upcoming changes from the Centers for Medicare & Medicaid Services (CMS) are designed to promote deeper integration of Medicare and Medicaid services. Health plans must prepare for these shifts to remain compliant. For more details, see our guide on Navigating CMS 2027 D-SNP Requirements.

Financial and Operational Implications for Health Plans

Managing the dual-eligible population carries significant financial weight and operational complexity.

Disproportionate Spending and Cost Drivers

Dual-eligible beneficiaries represent 20% of the Medicare population but account for 34% of Medicare spending. This is driven by:

• Higher Per-Patient Costs: Inpatient hospital spending reached $23,652 per dual-eligible patient compared to $19,400 for fee-for-service Medicare beneficiaries.

• Intensive Service Utilization: 94% of dual-eligibles use outpatient services.

• Long-Term Care Needs: Sustained high costs associated with LTSS.

Operational Hurdles for Payers

1. Fragmented Systems and Data Silos: Disparate platforms hinder real-time data sharing and make it difficult to coordinate Medicare and Medicaid benefits.

2. Complex Enrollment and Eligibility: Frequent changes in member status create administrative burdens and require agile systems.

3. Provider Data Management: Ensuring accurate provider data and payment coordination across different networks is resource-intensive.

4. Evolving Regulations: Staying current with federal and state mandates requires robust governance and technology.

5. STAR Ratings Pressure: Meeting quality benchmarks is challenging with a high-acuity population, impacting revenue from quality bonus payments.

Strategic Opportunities and Integrated Care Models

Despite the challenges, dual-eligibility offers health plans a chance to innovate and differentiate themselves through a multi-pronged approach focused on integrated care and technology.

• Integrated Care Models: Aligning Medicare and Medicaid services through coordinated care teams and personalized care plans improves outcomes. Effective D-SNP Care Management is crucial for success.

• Technology-Driven Automation: Automating claims adjudication, eligibility verification, and data exchange reduces administrative burden and supports proactive care management.

• Enhanced Member Engagement: Digital tools and personalized outreach can improve STAR ratings and retention. Understanding what dual-eligible members want is key to building trust and loyalty.

How HealthEdge Supports Dual-Eligible Needs

HealthEdge provides an integrated technology ecosystem designed to help payers overcome the complexities of serving dual-eligible populations. Our solutions empower health plans to automate processes, ensure compliance, and deliver coordinated, high-quality care.

• HealthEdge HealthRules® Payer: Automates synchronous claims adjudication and supports "wrap" arrangements that coordinate Medicare and Medicaid benefits.

• HealthEdge GuidingCare®: Facilitates integrated care management with interdisciplinary care team coordination and data-driven interventions to improve STAR ratings.

• HealthEdge Wellframe™: Enhances digital member engagement with personalized touchpoints that improve satisfaction and adherence.

• HealthEdge Source™: Streamlines management of Medicare updates and state Medicaid fee schedules to ensure regulatory currency.

• HealthEdge Provider Data Management: Uses AI to maintain accurate, real-time provider data across networks.

By investing in scalable technology and streamlined operations, health plans can transform the challenge of dual-eligibility into a strategic differentiator. To learn more about navigating these complexities, visit our Regulatory & Compliance Resource Hub.