Medicare Advantage’s Supplemental Benefits

Published January 14, 2020

During CareCentrix’s recent webinar, Year in Review: CMS’ Changes Impact on the Future of Health Care, our panel of industry experts discussed the expansion of supplemental benefits, which can include offerings that are not necessarily health-related but have a reasonable expectation of improving or preserving a member’s health and/or functional status, and how these benefits may impact health plans’ Medicare Advantage 2021 bids.1 These benefits can include coverage for things such as for personal care, transportation and medically-tailored nutrition.

Medicare Advantage is an alternative to conventional Medicare (Part A and B), offered by private health plans.2 Prior to CMS’ rule changes, supplemental benefits offered as part of Medicare Advantage mainly included dental, vision and hearing coverage.3 Now, as the healthcare climate pivots from fee-for-service to value-based payment models, these benefits are expanding to include a broader scope of offerings. Insurers are slowly realizing that the value of offering these benefits is far greater than paying for treatment costs, including time spent in high-cost, acute care facilities, once a patient’s illness becomes more severe.

Medicare Advantage has grown significantly over the past ten years, and as a result, more health plans have entered the market, making it very competitive.4 Plans must deliver effective, high-quality solutions that successfully manage costs and provide excellent care. In an effort to address the rapidly growing “silver tsunami” population, CMS finalized rule changes that will expand current policies to allow plans to cover a wider range of supplemental benefits.  The new regulations seek to drive more care to the home and focus on maintaining member health, instead of only treating illnesses or declining function.

Health plans’ primary objectives for supplemental benefits in relation to their Medicare Advantage 2021 bids will be to include benefit options that address non-clinical social determinants of health (SDoH) for people with acute health needs or chronic illnesses. Health plans are beginning to recognize the importance of SDoH in driving better health outcomes and lowering health care costs.

Personal Care

The majority of people would prefer to receive care at home. However, home health services are currently only offered for a short period of time and only after a patient has been hospitalized for a minimum of three days. The new policy takes into consideration these challenges and aims to support patients in residing independently in their homes for as long as possible. These changes would allow Medicare Advantage plans to include personal care as an offering for those in managed care. Members will have the option to choose an available plan that covers more services than traditional Medicare. If all goes as intended, patients and the healthcare system can expect to save a great deal of money.5

Transportation

As health plans look to implement better ways to manage the health of the aging population (many of whom can no longer drive or get around on their own), transportation benefits are critical to ensuring members are receiving the care they need. Through the new policies, members may be able to access transportation for physician visits, preventive care, and other healthcare related services. This year, 243 health plans introduced a transportation benefit as part of their Medicare plans and this number is expected to grow even more next year.6 In 2020, one-third of plans (33 percent) will provide some type of transportation benefit as part of the extra benefits in plans for general enrollment.7 Additionally, almost all Medicare Advantage beneficiaries (92 percent) will have access to transportation assistance in 2020, as part of the extra benefits included with Medicare Advantage plans, which are not currently covered under original Medicare.8 Insurers now have the flexibility to segment their plans by specific populations and offer this benefit to individuals whose health outcomes will be most significantly impacted.

Medically-Tailored Nutrition

It is no secret that proper diet has a direct link to better health and prevents chronic illnesses like diabetes and high blood pressure; however, many seniors lack access to adequate nutrition. As part of CMS’ policy revisions, Medicare Advantage beneficiaries may now be able to qualify for home-delivered meal services. Health plans can also offer targeted meal delivery services for specific conditions. For example, members with heart conditions may now have the option of heart healthy meal delivery through their plan. Health plans can also now offer members transportation to diabetes education services or to see a nutritionist who can customize a diet plan based on their health condition. Traditionally, Medicare enrollees had to meet specific chronic condition criteria to qualify, but the new rules allow members to access meal services if it can improve or maintain the member’s overall health or function related to their chronic condition.9

Conclusion

While the effects of CMS’ policy changes remain to be seen, the good news is that millions of Medicare Advantage beneficiaries stand to benefit from these changes in a very big way, especially those who require home health services but currently do not qualify or do not have the means to cover out-of-pocket expenses. Given the rapidly growing 65-and-older population, fee-for-service models are increasingly transitioning to value-based arrangements, driving care to the home in an effort to improve costs and achieve better outcomes. What’s more, the industry’s view of “health” now considers the importance of non-clinical issues such as proper personal care, nutrition, and transportation needs. These types of benefits improve overall health and quality of life, while reducing the risk of illness and subsequent treatment and/or hospital costs. With the deadline for Medicare Advantage bid submission approaching fast, it is in the best interest of health plans (and their members) to incorporate these changes as part of their benefit offerings, or risk a significant drop in enrollment. While these regulatory changes will not alleviate all of the challenges that Medicare Advantage beneficiaries face, it is a step in the right direction. Insurers should develop strategies and create competitive benefits packages so they don’t fall behind the curve.

References

1Department of Health & Human Services, “Implementing Supplemental Benefits for Chronically Ill Enrollees,” accessed December 26, 2019, https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/Supplemental_Benefits_Chronically_Ill_HPMS_042419.pdf.

2 Centers for Medicare & Medicaid Services “Milestones 1937-2015,” accessed December 26, 2019, https://www.cms.gov/About-CMS/Agency-Information/History/Downloads/Medicare-and-Medicaid-Milestones-1937-2015.pdf.

3Department of Health & Human Services, “Implementing Supplemental Benefits for Chronically Ill Enrollees.”

4The Henry J. Kaiser Family Foundation, “Medicare Advantage Fact Sheet,” accessed December 26, 2019, http://files.kff.org/attachment/Fact-Sheet-Medicare-Advantage.

5 Department of Health & Human Services, “Implementing Supplemental Benefits for Chronically Ill Enrollees.”

6SafeRide Health, “CMS Changes Pave the Way for Medicare Advantage Transportation Benefits in 2020,” accessed December 26, 2019, https://saferidehealth.com/blog/medicare-advantage-transportation-in-2020.

7The Henry J. Kaiser Family Foundation, “Medicare Advantage 2020 Spotlight: First Look,” accessed December 26, 2019, https://www.kff.org/report-section/medicare-advantage-2020-spotlight-first-look-data-note.

8The Henry J. Kaiser Family Foundation, “Medicare Advantage 2020 Spotlight: First Look.”

9Department of Health & Human Services, “Implementing Supplemental Benefits for Chronically Ill Enrollees.”