With Great Power Comes Great Responsibility: Medicare Advantage’s Newfound Supplemental Benefit Flexibility
The Centers for Medicare and Medicaid Services (CMS) recently made a series of interrelated policy changes to give Medicare Advantage (MA) plans more flexibility than ever to offer additional services outside of traditional Medicare. Known as supplemental benefits, these services have historically included items like dental, vision, and hearing. By allowing plans to offer an even wider and more tailored array of services, CMS expects that plans will be better positioned to attract members and meet beneficiary needs.
In its announcement of rates and policies for 2019, CMS notified plans that it would expand the scope of permitted services to include things like nonskilled in-home workers, portable wheelchair ramps, and other assistive devices. CMS also issued rules that give plans the ability to target supplemental benefits at certain subsets of enrolled populations. Previously, plans were required to offer such benefits uniformly to all plan participants. Under this new category of benefits a plan could, for example, decide to offer enrollees with diabetes more frequent foot exams with lower cost-sharing.
Moreover, beginning in 2020, CMS will create a third category of “chronic” supplemental benefits, allowing plans to focus services like nonemergency transportation toward individual chronically ill beneficiaries. This new category is the result of CHRONIC Act provisions enacted as part of the Bipartisan Budget Act of 2018. In sum, over the next two years, CMS will widen the scope of generally available supplemental benefits, permit benefits targeted at certain enrollee populations, and allow plans to offer a broader range of services to individual chronically ill members under certain circumstances.
How Will More MA Plan Flexibility Impact the Medicare Program?
In addition to these newfound flexibilities around supplemental benefits, MA plans are also poised to receive a substantial increase in revenue next year. The confluence of higher rates and less restrictions on extra benefits should lead to greater scrutiny on plans by CMS. As these benefits are implemented, the agency will need to ensure that new benefits actually improve outcomes and are allocated in an equitable way. For example, CMS’ review of benefit design will need to ensure that high-cost enrollees are not being excluded in favor of healthier patients and that eligibility is based on objective, measurable medical criteria. Another important question is what happens when a patient has begun to rely on these new services if plans encounter a less favorable rate environment and cease to offer them.
At a recent hearing, Senator Ron Wyden (D-Ore.), the Ranking Member of the Senate Finance Committee, lauded the bipartisan passage of the CHRONIC Act, which he said began the transition of Medicare from an “acute care” to a “chronic care” program. The CHRONIC Act reflects an important recognition among policymakers of the changing demographics in the Medicare population and the corresponding need to align federal dollars to best meet evolving beneficiary needs. With roughly 20 million enrollees, Medicare Advantage plans are on the front lines of this transition, and with the newfound freedoms provided by CMS’s recent actions, all eyes will be on them.