Innovation and disruption
Medicare Advantage Plans Now Offer More Benefits For Senior Living Providers
CMS has issued the 2019 Medicare Advantage (MA) and Part D Rate Announcement and Call Letter, which includes a policy change for the health-related supplemental benefits that can be offered by MA plans. This means that senior living organizations, especially the independent and assisted living settings, can now be reimbursed for certain types of services provided to residents who are enrolled in these plans.
Reinterpretation of “primarily health-related” benefits expands supplemental coverage
The services potentially available for payment are supplemental health benefits that would be considered “daily maintenance” services. CMS has not previously considered daily maintenance services as “primarily health-related,” so they were not allowable for reimbursement. With the issuance of this call letter, however, CMS has discussed a reinterpretation of the statute, which expands the scope of the primarily health-related benefit and includes items and services that would be considered daily maintenance, as long as they are health care benefits.
Under this reinterpretation, the options that MA plans can offer for supplemental benefits will increase as long as they “provide patients with benefits and services that may improve their quality of life and health outcomes.” In order for an item or service to qualify for supplemental health care benefits, it must:
- Diagnose, prevent, or treat an illness or injury;
- Act to improve the functional/psychological impact of injuries or health conditions; and
- Reduce avoidable emergency and healthcare utilization.
CMS believes that an item or service that will reduce the risk of injuries or worsening health conditions and help avoid the need for further care could be provided as a supplemental benefit, even if that item or service is considered daily maintenance. Examples of daily maintenance items include, but are not limited to, portable wheelchair ramps and other assistive devices and modifications when patients need them. This thinking falls in line with Secretary Azar’s priorities of increasing care coordination and providing care to beneficiaries “in place,” rather than incurring unnecessary trips to the emergency department or hospitalizations.
Beginning in 2019, MA plans may offer, as part of the supplemental benefits, items and services that would be considered daily maintenance in an in-home setting. As long as CMS includes independent and assisted living in the definition of an in-home setting, the MA plans can include these services for individuals living in such facilities. The expansion of this definition will allow MA organizations to develop plans with more flexibility around the design of supplemental benefits, enhancing the beneficiary’s quality of life and improving health outcomes.
The expanded definition of supplemental benefits also means that those in the senior living space may be reimbursed for services provided to individuals residing in their communities. Historically, seniors living in an independent or assisted living facility were responsible for payment for both housing and services, which could potentially make these living arrangements unaffordable. If the cost of services is covered by the MA plan, the affordability improves, and these living arrangements become more appealing.
Senior living facilities and Medicare Advantage plan providers must prepare
Senior living facilities will need to strategically plan for this change and develop an appropriate marketing approach, consider entering into either new or enhanced contracting relationships with MA organizations, and prepare for potential billing changes.
The next step for MA plan providers is to submit their 2019 benefit offerings to CMS for approval.
The inclusion of these supplemental benefits in an in-home setting, such as at independent and assisted living facilities, is a win-win for the senior living organizations and the MA plans. Providing these services will help improve the quality of life and health outcomes for seniors and keep health care spending from escalating in the future.
In light of the upcoming permanence of special needs plans (SNPs), this call letter clearly indicates that for true change to happen in health care, greater risk must be borne by the payers and providers. The updates to MA plans appears to be a near-term strategy to drive the transformation CMS is seeking.
How we can help
If your senior living organization is considering contracting with a MA plan, or developing an MA plan of your own, our professionals can help you think about the impact on your organization and develop a strategy for designing, implementing, and executing a customized plan.