UPDATE: April 3, 2019: America's Health Insurance Plans on Tuesday said in a statement it approved of the more flexible benefit options but is concerned about regulatory changes still pending just two months before the submission deadline for plan offerings. The payer lobby flagged the HHS proposal to eliminate safe harbor protections for Part D plans and "highly-complex proposed rules to change interoperability standards."
- Medicare Advantage plans will have flexibility to cover benefits that address social determinants of health, such as covering the cost of fresh produce for beneficiaries with heart disease or carpet cleaning for those with asthma, under the 2020 Rate Announcement and Call Letter for Medicare Advantage and Part D that CMS released Monday. Congress approved the legality of the payments last year.
- The final rule also increases payment rates by 2.53%, nearly one percentage point higher than the increase proposed in the agency's advance notice issued in December, but lower than last year's 3.4% jump. As anticipated, CMS is phasing in its new risk adjustment model for MA plans. The new methodology for calculating risk scores will include a higher blend of encounter data and less fee-for-service claims data.
- Private plans are being "strongly encouraged" to use the new policies to address the opioid epidemic through cost sharing reductions for addiction treatment and reversal medications. One CMS official told reporters the agency is expecting plans to provide at least one lower-tier opioid prevention measure.
CMS Administrator Seema Verma told reporters the Trump administration has no plans for traditional Medicare to mirror the new benefits the agency is allowing private plans to provide. While sometimes "a patient just needs something minor that can keep them out of the emergency room and keep them healthy," those minor benefits can only be offered in a value-based pay arrangement, she said.
Congress allowed CMS to propose unconventional benefits for private payers in the MA program because those plans have budgetary restrictions and a higher risk appetite — whereas traditional Medicare's fee-for-service program is more open-ended. The only reason it's appropriate is because payers are at risk for the total cost of care, Verma said.
Though research on addressing SDOH by clinical means has been fairly limited, industry interest and understanding is rising at an increasingly rapid clip. A study published in PLOS Medicine late last month modeled how incentive programs addressing food insecurity could result in 1.93 million fewer cardiovascular disease-related events, prevent 3.28 million such events and save more than $100 billion in related costs for payers.
That study was preceded by a number of findings out of Georgetown University Health Policy Institute, Indiana University and Health Partners Plans in Philadelphia on the subject. The verdict: Addressing SDOH is effective.
While the focus has largely been on Medicaid and Medicaid managed care, a study published in December found that one in every five patients struggles with a high-risk health problem related to their socioeconomic status. The majority of patients involved in the study struggled with financial insecurity, housing insecurity, addiction, transportation access, food insecurity and health literacy, among other SDOH.
New MA benefits will allow plans to offer members coverage that's determined by needs, not just what's on a list of available services. Still, beneficiaries will be able to see what kind of supplementary benefits will be offered by each plan when they shop the MA market, Verma said.
Previous supplementary benefits have focused on preventive measures such as home and bathroom safety devices and modifications. CMS hopes the new rule will allow payers to be more proactive.
They've certainly been proactive in the MA market, which has become wildly popular in recent years. The industry's biggest payers reported increases in MA enrollment last year, and that growth is only expected to continue. Avalere estimated last year that enrollment will jump by 11.5% in 2019 to 22.6 million people — or 40% of Medicare beneficiaries. Experts at a recent America's Health Insurance Plans conference posited growth will be spurred by new supplementary benefits.
Payers have not, however, been receptive to encounter data. CMS has been trying to integrate encounter data since 2016, but those efforts have only been met with resistance. Led by AHIP, insurers raised concerns last month about the validity and accuracy of encounter data, cautioning CMS against its expanded use and claiming the agency was deliberately attempting to lower MA payments.