Doctor Talking with Young Patient

Is the current legislative environment creating a framework for personalized plan design that could someday expand to all Americans?

Innovation and disruption

Medicare Advantage For All: Could It Happen?

  • 12/7/2018

With health care representing almost 20 percent of the Gross Domestic Product (GDP) today, it’s no secret there is a burning platform to find innovative ways to drive down costs while increasing value and ensuring that affordable health care is accessible to all Americans. Ideologies gaining popularity and drawing political debate are focused on “Medicare for All” or a single-payer system.

Medicare is the largest federally funded, single-payer health system for aging Americans 65 and older and the disabled. It reimburses hospitals and physicians on a fee-for-service basis through a largely one-size-fits-all approach. In June 2018, a Medicare Trustees report forecasted solvency of the Medicare Trust fund through 2026, creating further impetus to creatively affect how Medicare reimbursement and care delivery is done today. Medicare was created in 1965 as a social program to ensure elderly Americans had health insurance. Today, nearly 25 percent of all Medicare spending occurs in the last year of life, and we are facing an insurgence of Baby Boomers into the system at a rate of 10,000 per day.

While there may be political and emotional push for “Medicare for all,” Americans may not benefit from a one-size-fits-all approach, nor is it likely to be economically viable for the long-run. Perhaps using Baby Boomers, the largest segment of Americans today, in a consumerism field test, we might be persuaded that personalized, affordable care for all could be a reality that is not that far off in the distant future due to several recent legislative actions.

Medicare beneficiaries have choices

If the one-size-fits-all approach isn’t ideal for a particular lifestyle or condition, beneficiaries may choose to forego original Medicare and instead receive their Medicare health benefits from a commercial insurance company through a Medicare Advantage plan (MA plan), which has been a common practice since the 1970s. Today, approximately one-third, or 20 million, of all Medicare eligible patients are choosing to do so, and this number is estimated to grow, with premiums forecasted to be an average of six percent less for 2019.

MA plans come in all shapes and sizes and historically have had flexibility to build on the original Medicare benefit platform, providing supplemental benefits such as preventive physicals, dental, and vision services, or coverage for international travel, as long as anti-discrimination laws were adhered to.

The Centers for Medicare and Medicaid Services (CMS) typically pays MA plans a capitated amount (per member per month) based on risk factors of the beneficiary captured through diagnosis codes, which are used to predict the cost of care for a given year. Therefore, if a Medicare beneficiary chooses a MA plan, the MA plan uses clinical and claims data to focus on understanding the health status and decisions of the patient through utilization patterns, disease presence, and wellness attainment.

The Bipartisan Budget Act of 2018 opens the door for personalized benefits

The Bipartisan Budget Act of 2018 (BBA of 2018) finalized legislation that effectively allows MA plans to focus benefits on specific needs of individuals in 2019, relaxing the long-standing uniformity requirement that requires plans to treat all enrollees the same. Under the old rules, MA plans were required to offer all enrollees the same basic supplemental benefits at the same out-of-pocket cost-sharing amounts. This regulatory limitation has inhibited “patient-centered care” from flourishing. Patients are unique, and their needs vary by geography, disease state, preference, and across clinical settings. In order to reduce unnecessary utilization, a more personalized approach to benefit design could be advantageous, drive engagement, and ultimately be more affordable.

Under the old rules, any supplemental benefit offered to MA plan enrollees had to be primarily health-related and focused on preventing, curing, or diminishing an illness or injury. On April 27, 2018, CMS clarified that beginning in 2019, a primarily health-related benefit is one that is used “to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions or reduces avoidable emergency and health care utilization.” This clarification enhances the framework for “targeted” supplemental benefits and opens the door to benefit design by patient profile or disease cohort (or “personalized benefits”).

In 2020, MA supplemental benefits will be expanded to include chronically ill enrollees. Chronic care benefits are not required to be health-related, but only related to the health and overall function of the beneficiary. This change could have a dramatic impact on plan design and clinical delivery to patients with chronic diseases. And, for the first time, patients may have a better understanding of what they are buying as they look for MA plans to address their personal needs more holistically.

Supplemental benefits may influence social determinants of health

While the clarification CMS provided in April indicates supplemental benefits to address social determinants of health (SDoH) are not a primarily health-related benefit, the “allowed” examples are likely to directly influence SDoH. A non-exhaustive, high-level overview of supplemental benefits includes:

  • Adult day care services
  • Home-based palliative care
  • In-home support services
  • Support for caregivers of enrollees
  • Medically-approved non-opioid pain management
  • Stand-alone memory fitness benefit
  • Home and bathroom safety devices & modifications
  • Transportation
  • Over-the-counter (OTC) benefits

SDoH are a silent influencer of overall health care costs. In a recent study, the American Hospital Association estimated that 40 percent of an individual’s overall health is a direct result of socioeconomic factors, all occurring outside of the traditional walls of health care systems.

Unless we create a health care system and approach that accounts for these factors, bending the cost curve may be next to impossible.

A recent study conducted by HealthConnections, a program from WellCare Health Plans, concluded that health plans that account for and address social needs of patients can see costs decrease by 11 percent overall. There is also likely a correlated impact on outcomes and patient experience. This study seems to point out that when SDoHs are built into the overall plan design, cost savings and increased patient satisfaction can occur. For example, a patient that has been identified as suffering from isolation and depression with limited caretaker interaction during the daytime hours would benefit from a plan with adult day care as a supplemental benefit. If MA plans can identify SDoHs by patient or disease cohort, it may allow for whole person care aligned to their benefit plan design.

Special needs plans, a targeted approach

Section 231 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created opportunities for MA plans to target beneficiaries through special needs plans (SNPs) in certain categories, including:

  • Beneficiaries residing in institutional settings, like nursing homes;
  • Those dually eligible for Medicare and Medicaid; and
  • Those with severe or disabling chronic conditions.

SNPs must include prescription drugs in the overall management and control of spending. SNPs are built on a chassis of chronic care and behavioral health management across the three populations:

  • Institutionalized (I-SNP)
  • Dual eligible (D-SNP)
  • Chronic care (C-SNP)

The BBA of 2018 expanded supplemental benefits and permanently reauthorized SNPs as a type of MA plan. Based on design, the SNP environment further extrapolates an MA plan’s ability to create personalized benefits for targeted populations. With robust access to patients’ utilization data across the continuum, and an in-depth look at risk scores and predictability provided by diagnostic information, SNPs have the necessary insights to personalize supplemental benefit design. The plans can then be aligned to disease-specific care protocols, and SNPs can implement non-traditional approaches targeted at reducing high cost services and providing the right care, in the right place, at the right time. Opportunities to use artificial intelligence technology and advanced data mining will continue to expand the ability of SNPs to manage robust populations by targeting prospective benefit design.

AMERIGROUP expands supplemental benefits in four MA plans for 2019

Amerigroup wasted no time introducing their plans to address social and support needs as part of their 2019 MA plan benefits when they launched their Everyday Extras in October 2018. This innovative approach to personalized care will focus on wellness services including healthy food delivery, personal home helpers to aid daily activities at home, personal assistance devices, transportation, and alternative medicine to address pain and discomfort.

Evidence of the personalized approach to care delivery is woven into the structure of all of the supplemental plan benefits, including the healthy food delivery benefit, which can be triggered by a hospital discharge for patients with a BMI greater than 25 or an A1C greater than 9. This is a great example of a personalized benefit design targeted at specific cohorts of patients with a goal of influencing SDoHs for better outcomes and overcall cost savings.

Telehealth expansion brings even more opportunity

The BBA of 2018 also included language that would expand an MA plan’s ability to reimburse for “clinically appropriate” telehealth benefits not otherwise available in original Medicare beginning in 2020. Telehealth under original Medicare is restricted statutorily to rural areas and consumer applicability is limited. The provisions of the BBA of 2018 were formally introduced in the Medicare Advantage Proposed Rule 2018 released by CMS on October 26. The rule outlines how MA plans will have flexibility to implement telehealth benefits not currently covered by Medicare. The rule articulates that the technology types will not be limited in definition and can include asynchronous or other forms of communication, as appropriate, and further recognizes a rapidly changing and dynamic technology environment.

This move by the CMS will provide Medicare beneficiaries freedom of choice to decide how they will receive services and will likely increase access to care. The rule also allows a beneficiary’s home in both rural and urban geographies to be a reimbursable location. This expansion of virtual options could further the development of personalized benefits based on a cohort of patients or to manage a specific condition, patient population, or simply to extend care coordination and management services.

Medicare Advantage could be a framework for all

Recent legislative action is paving the way for an environment which opens the door to personalized MA benefit plan design, while also targeting the SDoH that have longed eluded the system. Although currently focused on government-insured lives within Medicare and Medicaid, a petri dish of possibilities is being created. The current ecosystem, coupled with analytic capabilities of big data and artificial intelligence, could result in an expedited move from fee-for-service toward evaluating personalized care across populations beyond the walls of Medicare and Medicaid.

Value-based holistic health care designed with predictability in mind and meeting the needs of many, while still retaining individuality, could become a reality. Although it may sound a little “George Jetson” for some of us, it seems we are on the cusp of a health care evolution that will enable the system to meet patients where they are at using innovative, individualized approaches, and leveraging data and technology to extend relationships. The result is a tighter ability to control costs and influence engagement and outcomes. While this may not be a panacea and may not solve the debate of a single-payer system, the path to personalized Medicare is being trudged — why should we stop there? Doesn’t it make sense to at least consider a world in which any person could have affordable, accessible, personalized health care? Now’s the time to sit back and watch what Medicare Advantage can teach us.

How we can help

Medicare Advantage plans are creating opportunities to personalize benefits across government health care programs. Moving forward in this dynamic health care environment, it will be important to consider how these plans fit into your future. CLA can help you strategically analyze alternative payment models, examine your health risk assessment and HCC scores to see if they fully reflect the complexity of your patient population, assess the readiness of your revenue cycle for value based models, and assist with understanding and implementing telehealth.