In-Home Care Services to be Covered by Medicare Advantage Plans

Published May 29, 2018

On April 2, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a final Call Letter announcing expansion services covered by Medicare Advantage plans. Beginning in 2019, for the first time, Medicare Advantage benefits will include non-skilled home care services.

These services include benefits such as transportation to doctors’ offices or help shopping for healthier food. Some industry specialists expect that the benefit expansion may include safety improvements at home, including installation of bathroom grab bars, on top of non-skilled help with activities of daily living. The new benefits may not require a physician’s prescription, but they must be designated as medically-appropriate by a licensed healthcare provider.

A significant change in focus

In the past, CMS did not cover services for “daily maintenance.” The new Call Letter indicated the statute authorizing Medicare Advantage plans will expand the scope of the “primarily health-related supplemental benefit” standard. Now, CMS will allow supplemental benefits to be used to “diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization.” The goal is to keep members healthier longer so as to forestall expensive acute-care hospitalization.

High needs, high costs

When the rule was announced in February 2018, it was hailed as a boon to the increasingly large number of dual-eligible members, i.e., persons who qualify for both Medicare and Medicaid. According to Alicia Kelley, director of Medicare sales for Capital District Physicians’ Health Plan, the new rule allows Medicare Advantage plans to “build off the existing benefits that we already have in place that are focused more on prevention of avoidable injuries or exacerbation of existing health conditions.”

By 2015, the proportion of Medicare beneficiaries covered by Medicare Advantage plans had reached 35%. In 2017, 20 million seniors chose Medicare Advantage plans. These numbers are expected to rise in coming years.

Addressing the doubters

There has been criticism of the recent announcement. Certain commentators expressed concerns that the expansion of Medicare Advantage would come at the expense of traditional Medicare recipients. Others have noted there will be a great deal of regional variation in implementation of the home care benefit, such that some plans will not offer the benefit to members. Still others lamented the already cash-strapped Medicare system cannot afford further expansion.

However, it is likely the benefits will outweigh the costs. According to Dustin Harper of California’s Institute for Aging, integrated approaches, such as those provided by the Medicare Advantage expansion, can save an individual member up to 30 percent of annual costs. Patients themselves much prefer to be cared for at home than in long-term care facilities.

Lessons from abroad

The Medicare Advantage expansion can be thought of as the US catching up with the rest of the world in terms of direction of resources toward health maintenance at home. In the UK, for example, the Care Act of 2014 mandated services and support for family and unrelated individuals providing care to others in the home. The UK system is patient-centered, in the sense that each elder and their family is extensively evaluated to assess individual needs. Care is then provided based on need, no matter how small. Non-paid caregivers are also compensated in the form of respite leave. Previously, this type of intensive support at home was available in the US only through limited programs such as Medicaid LTSS.

Leveraging technology

Financial pressures notwithstanding, US Medicare recipients are likely to benefit from lessons learned from our neighbors across the pond. In particular, the integration of connectivity technologies promises to augment the level of care provided by both skilled and non-skilled in-home caregivers. Studies will almost certainly show that the combination of technology and increased levels of care at home will give rise to better outcomes. The Medicare Advantage expansion is a promising first step.