The Deeper Dive

Evolution of Supplemental Benefits in Medicare Advantage

Medicare Advantage is required to provide all of the basic benefits covered by Traditional Fee-for-Service (FFS) Medicare. Medicare Advantage plans also may offer supplemental benefits, which are benefits not covered under FFS Medicare. Common supplemental benefits include, but are not limited to, coverage for hearing aids, dental coverage, and vision care benefits.

Historically, supplemental benefits offered by Medicare Advantage were required to be “primarily health-related” items or services offered uniformly to all health plan enrollees.

However, recent policy changes have spurred the Centers for Medicare & Medicaid Services (CMS) to update its guidance to health plans on supplemental benefits, which will enable expanded supplemental benefits in 2019 and beyond.

Last month, CMS released much anticipated sub-regulatory guidance reinterpreting standards for how supplemental benefits in Medicare Advantage may be designed and offered to beneficiaries. This guidance explains how Medicare Advantage health plans may utilize greater flexibility to offer benefits that are tailored to beneficiaries’ unique health care needs.

 

How Flexible Supplemental Benefits May Be Offered in 2019 and Beyond

 

CMS re-interpreted the “primarily health-related” supplemental benefit standard to include items and services that: (1) are used to diagnose and compensate for physical impairments; (2) address the impact of injuries or health conditions; or (3) reduce avoidable health care utilization. In addition, CMS has re-interpreted what it means for supplemental benefits to be “uniformly” offered to enrollees. Under this new interpretation, health care benefits may be targeted to specific groups of beneficiaries based on their health status or disease state to improve their quality of life.

In the recent guidance CMS provided examples of ways new flexibilities can be implemented in 2019. For example, a Medicare Advantage health plan may provide a diabetes patient with access to low- or no-cost transportation and/or reduced or eliminated copays for visits to the endocrinologist. These targeted benefits must be available to every enrollee with a similar diabetes diagnosis. In another example, a patient with heart disease who meets with a case manager or primary care physician and regularly monitors and reports their blood pressure may receive reductions in copays and cost-sharing. These types of additional flexibilities are designed to enable Medicare Advantage health plans to implement innovative ways to encourage beneficiaries to utilize high-value care to and improve their health.

While this guidance is a step forward in enabling Medicare Advantage to provide expanded care in the home, transportation, and over-the-counter benefits, CMS stated that supplemental benefits cannot target health care services based on social determinants, like homelessness or food insecurity. This decision is disappointing, both because CMS has demonstrated a commitment to addressing social determinants of health, and because Better Medicare Alliance has advocated for enhanced benefit flexibility to enable Medicare Advantage to include a wider range of supplemental benefits that address social determinants of health, including food insecurity.

 

How New Flexibilities in Medicare Advantage Could Evolve Even Further

 

While CMS limited how supplemental benefits can be used to address social determinants in 2019, the agency is examining multiple ways to address social determinants in the Star Ratings System as well as in the risk adjustment model used to calculate payment in Medicare Advantage. Additionally, the recent passage of provisions of the CHRONIC Care Act in the Bipartisan Budget Act of 2018 (BBA) provides CMS with more flexibility to re-define supplemental benefits in 2020 beyond. Specifically, the BBA explicitly states that effective in 2020, supplemental benefits need not be “primarily health-related,” potentially opening the door for plans to offer additional benefits that address social determinants. We look forward to we look forward to seeing what additional flexibilities CMS will provide for supplemental benefits in the future.

It is not yet known how Medicare Advantage health plans will seek to use the new flexibilities, what will be approved by CMS, or how beneficiaries will navigate new plan choices. But the fact remains, CMS has significantly changed the way Medicare Advantage supplemental benefits can address the chronic conditions of beneficiaries which is a positive step in the movement to deliver more value-based care.