Medicare Advantage Establishes the Basis for SDOH Benefits
Major change in the form of new kinds of supplemental benefits is coming to Medicare Advantage (MA) plans, which insure 19 million—or 33% of—Medicare beneficiaries. Beginning in 2019, plans will be able to offer targeted supplemental benefits addressing primarily health related (PHR) needs, with further expansion slated for 2020 for populations with chronic illness, most likely including benefits that would address social determinants of health (SDOH). Supplemental benefits include items or services not covered by Medicare fee-for-service, such as transportation, meals, and home modifications, with the list expected to become more comprehensive. This blog discusses new and future benefits, as well as the opportunities and challenges for enrollees, plans, providers, and service vendors as they navigate this new policy environment. Lastly, it discusses the road ahead in building the evidence base for supplemental benefits that provide high value at low cost.
Changes in MA Supplemental Benefits
In previous years, the Centers for Medicare & Medicaid Services (CMS) required MA benefits (1) to be offered on a uniform basis at the same level of cost sharing to all plan enrollees; and (2) they had to be primarily health related under a narrow definition. In two Health Plan Management System memos released in April, CMS expanded the definition of PHR and reinterpreted the uniformity of benefits definition, allowing MA plans increased flexibility in the types of benefits they offer. These changes will allow MA plans to offer more tailored benefits to meet enrollee needs.
Table 1 summarizes major changes these requirements will soon undergo. Changes in 2019 will address requirements on both uniformity and health. CMS will reinterpret the requirement for uniformity, enabling plans to develop specific options for enrollees so long as those who have similar health status or disease states are treated uniformly. These changes mean that plans can develop a wider range of options for similarly situated enrollees such as people with diabetes, including a set of health-related benefits, reduced cost sharing, and lower deductibles that are medically related to that disease.
Table 1. Changes in Requirements for MA Plans on Uniform and Primarily Health-Related Benefits
|Primarily Health-Related Benefits
|Reinterpreted to mean enrollees with similar health status or disease status
|Expanded to include items/services “used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization”
|No further changes indicated
|Benefits no longer have to be primarily health related for chronically ill enrollees
CMS will also broaden its conception of “primarily health related.” It will now include items or services “used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization.”
In 2020, as part of its implementation of the Bipartisan Budget Act of 2018, CMS will relax the requirement that supplemental benefits for the chronically ill have to be health related, although they still must “have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee.”
Are These Big Changes?
The changes in the uniformity requirement, the meaning of PHR items and services, and supplemental benefits for the chronically ill represent major shifts on multiple levels:
- Number of eligible beneficiaries: Chronic conditions are common in the Medicare population, with the number eligible for supplemental benefits potentially large. According to CMS estimates, 65% of Medicare fee-for-service beneficiaries had at least two chronic conditions, with hypertension and hyperlipidemia the most prevalent.
- Health status: Benefits addressing improvement in the social and physical environments could make it easier to adopt and maintain behaviors more strongly associated with better health or reduction of health care utilization.
- Cost to Medicare: Improvements to health status through expanded supplemental benefits could mean fewer health care needs. Those with multiple chronic conditions use more emergent services, are hospitalized more frequently, and are more likely to need long-term care, needs that might be reduced or avoided with readier access to services aimed at addressing health needs through nonclinical interventions.
- Quality of life: CMS has not yet issued rules on supplemental benefits to be allowed for the first time in 2020 for the chronically ill. However, it notes that “it is possible for certain offerings to address issues beyond a specific medical condition, such as social supports.”
At the same time, there are real limits to the new extensions of supplemental benefits. They include:
- Availability: MA plans are not required to offer supplemental benefits. Moreover, plans that choose to do so can make them available for enrollees with some diseases, but not others, so long as they are not discriminatory.
- Variation by enrollee: Beginning in 2020, MA plans may only offer supplemental benefits to chronically ill enrollees with a reasonable likelihood of health improvement if they receive them, based on objective and measurable medical criteria.
- Excluded factors: Although targeted supplemental benefits to be offered beginning in 2019 can include reduced cost sharing and lower deductibles for those with targeted diseases, they cannot be used solely or primarily for “social determinant purposes.” Moreover, “[s]ocial determinants may not be used as a means to target benefits, even those benefits related to health (e.g., homelessness, food insecurity).”
- Lack of additional funding: MA plans will not receive additional funding to provide supplemental benefits, nor will their medical loss ratios be lowered to account for any additional costs.
Support for Expanded Supplemental Benefits
America’s Health Insurance Plans (AHIP) and the Better Medicare Alliance (BMA), both representing multiple MA plans, indicated their support for flexibility on MA uniformity requirements and tailored supplemental benefits in their comments on the proposed rule. As BMA explained, it “supports CMS’ proposal to increase flexibility and innovation to better serve beneficiaries, ease obstacles to health care and support services, and encourage use of additional, tailored services, supports or benefits targeted to high-need beneficiaries, particularly those with chronic conditions to maintain health and improve outcomes.” Health plan support for changes in MA supplemental benefits is consistent with their practices in products for other members. More than 80% of respondents to Change Healthcare’s national survey of its national and regional payer customers indicated that their plans were addressing social needs through, for example, integration of community programs and resources, integration of medical data with financial, census, and geographic data, and offering a social assessment along with a health assessment.
Implementation Opportunities and Challenges
Changes to MA supplemental benefits present both opportunities and challenges to enrollees, plans, providers, and vendors of the new SDOH-related services. The following presents a brief overview:
Enrollees: Supplemental benefits may offer MA enrollees the additional support they may need to maintain or improve their health, such as avoiding falls at home, recovering from hospital stays, and keeping their medical appointments. Nonetheless, supplemental benefits will further complicate the process of choosing health care options, which was already challenging. Enrollees will learn about the new benefits through the Evidence of Coverage information circulated by CMS prior to the open enrollment periods. By 2020, they will have to gauge their interest in three sets of supplemental benefits:
- Standard supplemental benefits offered to all enrollees;
- Targeted supplemental benefits offered to enrollees who qualify by health status or disease state; and
- Supplemental benefits offered to the chronically ill who have a reasonable expectation of improving or maintaining their health.
Plans: Supplemental benefits may provide plans with the opportunity of addressing the health needs of their members in ways that could address major impediments to prevention and effective utilization of health care services and benefits. However, plans will face challenges in ensuring that expansion of supplemental benefits fulfills its potential, including:
- Designing targeted supplemental and “chronic” supplemental benefits in ways that treat similarly situated enrollees in a uniform manner and that do not exclude higher-cost diseases.
- Identifying and providing high-value benefits that offer favorable returns on investment as well as enrollee satisfaction and retention.
- Building data sources, health records, provider networks, and business systems that integrate and support expanded supplemental and traditional health care benefits.
- Contracting with new service vendors that may have little experience with the health care industry.
Providers: As with plans, supplemental benefits may enable providers to deliver better patient-centered care that considers both the medical and social elements of good health. At the same time, providers will also play key roles in determining those eligible in 2019 for targeted benefits and in 2020 for “chronic” supplemental benefits. In 2019, CMS requires providers to diagnose enrollees or certify or affirm existing diagnoses for targeted benefits. They will also likely play integral roles in “chronic” supplemental benefits that will entail medical attention to health care status and improvement.
Vendors: The expansion of supplemental benefits in a growing sector of Medicare offers a major business opportunity for a variety of vendors, including those in disease management, transportation, and elder care services. Vendors will vary in how well situated they will be to take advantage of their opportunity, including their ability to scale their organizations and services, contract with health plans, and provide quality services to the aged. Some vendors, such as Meals on Wheels, have been in operation for decades, and CMS currently requires MA plans to partner with Meals on Wheels and other community services to provide home delivery of meals. Other vendors, such as Uber or Lyft, may be start-ups or relatively new businesses, as well as new to contracting with health plans and providing services to vulnerable populations.
The Road Ahead
The targeted supplemental benefits that will be offered beginning in 2019 and the “chronic” supplemental benefits that will be offered beginning in 2020 are important, if not first, steps in Medicare’s acknowledgement of the impact that social factors play in health status. While supplemental benefits are not new to MA, the expansion of the definition of primarily health related beginning in 2019 presents new opportunities for plans to address the unique needs of their enrollees with specific health issues. Moreover, in 2020, it is likely that CMS will allow even more supplemental benefits directed toward SDOH, consistent with the change mandated by the Bipartisan Budget Act supplemental benefits.
To ensure the success of these new benefits, it will be critical to better understand the impact of supplemental benefits on health care outcomes and costs. Plans will conduct their own proprietary evaluations to assess cost effectiveness, quality, and enrollee satisfaction. However, only a stronger evidence base will provide a broader understanding of what works best, for which populations, and under what circumstances, which will be essential in encouraging best practices and revising regulations as needed.
We appreciated comments from Cynthia G. Tudor, Ph.D. President, The Tudor Group, LLC as we developed this blog.