Innovation and disruption
Medicare Advantage Continues to Gain Popularity
Did you know that Medicare Advantage plans now cover 20 million individuals, or roughly one-third of all Medicare-eligible beneficiaries? That’s 10 million more than a decade ago.
Compared to 2018, we’ve seen an increase of 417 plans, along with an additional 87 new special needs plans, or “SNPs” (another type of Medicare Advantage plan). This increased interest in Advantage plans coincides with the introduction of new flexibilities under policies enacted in the 2018 Bipartisan Budget Act (BBA 2018) and new regulations from CMS. So let’s explore what it is about these changes that makes Medicare Advantage plans appealing.
Medicare Advantage plans interest multiple stakeholders
From the regulatory side, we have termed Medicare Advantage plans as the godfather of value-based models due to their capitated payment structure and positive outcomes. The Centers for Medicare and Medicare Services (CMS) sees these plans as risk-bearing, which is on ongoing goal of the agency in transitioning Medicare towards value. For beneficiaries, Advantage plans offer lower out-of-pockets costs, prescription drug coverage, and additional benefits such as vision and hearing. And from an insurer perspective, there is growing interest due to the sheer number of beneficiaries choosing Advantage plans, as well as an increasingly flexible statutory and regulatory outlook in which plans can operate.
New flexibilities in Medicare Advantage
In 2019, flexibilities brought into effect by the BBA 2018 included a reinterpretation of “primarily health related” supplemental benefits, an easing of uniformity requirements, and SNPs were made permanent. In fact, CLA has seen the increase in interest in these plans, and has been working with multiple organizations to evaluate and even develop SNPs. And in 2020, plans will be able to use telehealth and address social determinants of health in new ways.
To date, telehealth has largely been a supplemental benefit under Medicare Advantage. However, the BBA 2018 allows plans to begin offering telehealth as a base benefit in the 2020 plan year, meaning Advantage plans will be allowed to offer additional telehealth benefits beyond what is currently reimbursable under Medicare’s telehealth benefits for Part B. Starting in the 2020 plan year:
- Plans can cover far more services than are currently allowed under Part B for telehealth.
- Plans are not restricted to Medicare’s current geographic requirements for telehealth (i.e., patient and location will not need to be rural).
- A patient home is an acceptable site of service, which is generally not allowed under Medicare’s current telehealth regulations.
Further, CMS is broadly interpreting several statutory terms. For example, CMS finalizes that “clinically appropriate” will not be determined by CMS, but by each respective Medicare Advantage plan. In addition, the agency places broad parameters around what it is calling “electronic exchange,” and will allow plans to use asynchronous or other forms of communications as they see appropriate. Again, this definition is broader than what is covered and allowable under traditional Medicare, which generally requires synchronous communications. It is also important to note that Advantage plans can continue to provide additional telehealth or related services under their supplemental benefits.
Addressing social determinants of health in the chronically ill
Beginning in 2020, Medicare Advantage plans may also begin to look at and address social determinants of health under a new supplemental benefit design. For example, plans can structure benefits that are uniquely suited to individuals who are chronically ill. CMS formally calls this the special supplemental benefits for the chronically ill (SSBCI).
SSBCIs were enacted under the BBA 2018. Under the new policies, these SSBCIs are designed to not be primarily health related; they can be offered non-uniformly to eligible enrollees with chronic illness if the item or service has a reasonable expectation of improving or maintaining the health or overall function of the enrollee as it relates to the chronic illness. An example of this would be if an individual does not have access to fresh groceries, yet suffers from diabetes. SSBCIs allow for food delivery or transportation for non-health care related reasons.
CMS also reversed its thinking on whether the benefit could result in a property value increase. While CMS initially indicated it would not allow a wheelchair ramp, for example, because it would increase the value of the property, it was swayed by comments and decided to allow for these types of benefits.
Plans are also allowed to partner with community-based organizations to deliver SSBCIs. For example, CMS indicates plans may pay a community-based organization for furnishing a covered benefit like food delivery. Community-based organizations can also help determine whether an individual meets the eligibility requirements for SSBCI, as these organizations may already be providing services in the community and, in some cases, have contractual arrangements with Medicaid managed care or Medicare Advantage plans.
Statutorily, individuals must meet all of the following criteria to qualify for the SSBCI:
- Have one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee
- Have a high risk of hospitalization or other adverse health outcomes
- Require intensive care coordination
CMS has interpreted this criteria to mean that if an individual has any of the current chronic conditions covered by SNPs, then that individual will have met this statutory requirement. Examples of covered chronic conditions include cardiac, neurologic, mental health, and lung diseases, among others.
What could this new flexibility look like?
The potential to personalize coverage for an individual is exciting. Think about Joe, a chronically ill person who does not have transportation, needs access to fresh food, is suffering from a mental illness, and has chronic obstructive pulmonary disease (COPD) due to a history of smoking. Using all of the flexibilities available in 2020, a Medicare Advantage plan could develop a package of services and wrap-around benefits to support this individual’s health holistically. Not only could the plan address his physical and mental health, but it could consider social determinants of health or social risk factors in providing additional supports.
For example, a plan could provide Joe with options like:
- Fresh grocery delivery and cooking instructions
- Transportation to a community-based, local peer-support group
- Monthly counseling for mental health via telehealth
- Digital therapeutics to monitor medication adherence and symptom management
- Remote monitoring of physiologic data
- Home assessment to look for irritants that may exacerbate COPD
- An air filtration system
- Smoking cessation classes and assistance
Altogether, with this added support, Joe could feel better and manage his symptoms, leading to well-maintained mental and physical health. He is compliant with his medication regimen and is participating in counseling and a local peer-support group. His home environment has fewer irritants for his lungs. He is trying to quit smoking and is eating a more wholesome diet. Ideally, the upstream impact for the system is that he also will have fewer emergency department visits and need fewer costly health care services long-term.
While this is an only an example, and these new flexibilities are optional for Medicare Advantage plans, the potential here should not be overlooked. As health care continues to drive towards patient-centered and value-based care, utilizing all the tools available to help treat patients holistically and casting a wider net to address social risk factors and social determinants. This will offer real-world opportunities that benefit health care both individually and systemically.
How we can help
CLA is on the frontlines of these changes as health care continues to transition toward better value and outcomes. We work with clients across the continuum on health care’s ongoing transformation. From strategic planning to financial modeling and analysis, CLA can help you understand the evolving landscape for Medicare Advantage, SNPs, and beyond. We promise to know you and help you.