Change is Coming to a Medicare Advantage Plan Near You

By Stacie Sinclair, MPP, LBSW, Senior Policy Manager
Center to Advance Palliative Care

Allison Silvers, MBA, Vice President of Payment & Policy
Center to Advance Palliative Care

Torrie Fields, MPH, Senior Program Manager
Blue Shield of California


Medicare Advantage is moving into new territory in its ability to customize care for the needs of patients with serious illness.

For the first time, recent regulatory and legislative policy changes to Medicare Advantage (MA) will: 1) provide plans with more flexibility and enable provision of services matched to individual member needs; and 2) expand the types of services that can be covered. These changes have direct relevance for provision of palliative care and social services for beneficiaries in MA plans. Specifically, MA plans will soon be allowed to pay for services matched to the needs of these beneficiaries, including food, transportation, personal care aides, and home-based palliative care. Palliative care programs should be aware of these changes and take certain steps to demonstrate their value to MA plans.

Barriers in Designing Benefits for the Seriously Ill

For many years, MA—the private health plans which manage Medicare benefits for approximately one-third of US beneficiaries (about 18 million people)—have had financial incentives under managed care aligned with improving quality and reducing costs for their members with serious illness. MA plans (officially known as Medicare Part C) manage Medicare benefits under a managed care structure; they receive a fixed monthly “premium” payment for each Medicare beneficiary who voluntarily enrolls in their plan. In return for that premium, the plan agrees to cover all Medicare benefits which that enrollee may need, including inpatient care, clinician visits, and medical supplies and equipment. (For more details about MA, download the CAPC Payment Primer.)

In theory, MA plans are inherently incentivized to ensure that all enrollees receive high-quality and efficient care. Because of obstacles embedded in Medicare regulations, however, MA plans have been unable to tailor benefits to the needs of their more complex or seriously ill members:

  1. Specifications that any cost-sharing or supplemental benefit must be applied equally to all enrollees of the plan, regardless of individual member health status or diagnosis (known as the “Uniformity Requirement”). In other words, in order to provide an enrollee with cognitive impairment access to, say, adult day health services, the plan would have to provide the same coverage to all members (regardless of cognitive ability or need), making such coverage economically infeasible.
  1. Specifications that any supplemental benefits offered—those beyond what’s included in regular fee for service Medicare—must be “primarily health related,” which had been defined narrowly to include only those medically necessary services that prevent or improve health conditions and did not include services such as food, transportation, or personal care.

The requirements were originally put in place to protect beneficiaries and ensure fair access to services. However, stakeholders have long advocated for relaxing these requirements so that MA plans can align service provision to the needs of seriously ill members; federal policymakers responded with incremental policy changes and limited demonstration projects from the Center for Medicare and Medicaid Innovation (Innovation Center) such as the MA Value-Based Insurance Design (VBID), available in selected states. Yet, recognizing these were difficult for MA plans to implement and insufficient to meet the needs of beneficiaries, both the Centers for Medicare & Medicaid Services (CMS) and Congress recently took significant steps to address these MA barriers.


CMS Alleviates Barriers with Medicare Advantage Memos

CMS annually releases policy and payment updates to the MA program through a “Medicare Advantage and Part D Rate Announcement and Call Letter.” In April 2018, CMS finalized its CY19 Call Letter which included 1) a reinterpretation of “primarily health-related” supplemental benefits, and 2) a reinterpretation of the “uniformity requirement” for MA plans. These changes present a true paradigm shift in MA, as CMS will begin allowing the program to cover new supplemental benefits and providing flexibility for plans to offer different supplemental benefits and/or different levels of cost-sharing to subsets of MA enrollees. To clarify the new interpretations, the agency released two guidance memos:

Supplemental benefits memo

The supplemental benefits memo clarifies that these benefits are allowable “. . . if they compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization” and if they act “to ameliorate the functional/psychological impact of injuries or health conditions.” The memo goes on to provides examples of such allowable supplemental benefits, including:

  • In-Home Support Services to assist with activities of daily living (“ADLs”) such as bathing, dressing, and toileting, as well as instrumental activities of daily living (“IADLs”) such as shopping, cooking, and housekeeping;
  • Support for Caregivers of Enrollees, such as respite services, counseling, and training; and, importantly…
  • Home-Based Palliative Care, described as “services to diminish symptoms of terminally ill members with a life expectancy of greater than six months not covered by Medicare (e.g., palliative nursing and social work services in the home not covered by Medicare Part A)”

The specific mention of Home-Based Palliative Care is critical because CMS is explicitly acknowledging how valuable palliative care is and giving MA plans permission to cover it outside of acute care settings as a formal benefit. This change will allow MA-contracted nurses and social workers—whose time is not directly billable under traditional Medicare Fee-for-Service—to go into the home to provide the high-quality services that palliative care includes. This could significantly improve the long-term sustainability of MA-contracted palliative care programs, if they are equipped to capitalize on this opportunity. While some MA plans already cover home-based palliative care, they have historically been unable to add it as a benefit, which both allows plans to compete on the quality and richness of services provided and to provide greater transparency to consumers looking to purchase MA coverage.

Uniformity requirement memo

Meanwhile, the uniformity requirement memo clarifies that plans may now vary benefits for subsets of enrollees based upon their disease state or health status, as long as these variations are available to all similarly-situated enrollees—thus, maintaining “uniformity,” while enabling a much more person-centered approach to benefits. The memo explains that plans may use this flexibility to vary cost-sharing requirements for certain enrollees when they access “high-value services and/or providers.” “High-value” services can be defined as providing an improvement in health status or function that outweighs the cost of that service or treatment. This can be done by improving quality of life of the beneficiary or by improving a beneficiary’s overall health status as impacted by a chronic condition.

While the cited examples include eliminating co-payments for medications that control chronic illness or even primary care provider visits, it is up to each plan to determine exactly which providers and/or services have this “high-value” designation and how to justify that value. So far, few plans have availed themselves of this flexibility—for instance, Blue Shield of California has waived the co-pays for home-based primary and palliative care programs and clinicians, as well as advance care planning services. Eliminating cost-sharing for palliative care and advance care planning services increases access to this care by eliminating financial barriers for the plans currently offering such flexibility. This means that there is an opportunity to educate plans that palliative care programs and clinicians deserve the “high-value” designation and should thus be eligible for reduced or eliminated beneficiary cost-sharing.


Congress Alleviates Barriers with CHRONIC Care Act

Image from MeMD Blog

While CMS made these changes, Congress passed the CHRONIC Care Act of 2017 (CHRONIC Act), as part of the Bipartisan Budget Act (BBA) of 2018. The development of the CHRONIC Act was a multi-year process, spearheaded by the Senate Finance Committee (SFC), in response to growing concerns about the impact of chronic disease on Medicare beneficiaries and the overall financial sustainability of the program.

An Overview of the SFC’s activities:

May 2015

July 2015

July-December 2015

  • Conducted 80 stakeholder meetings, including a meeting with representatives from the National Coalition for Hospice and Palliative Care

December 2015

February 2016

October 2016

  • Released a discussion draft of bipartisan policy proposals
  • Acknowledged four policies from the Policy Options Document were adopted through regulation in the CY17 Medicare Physician Fee Schedule

December 2016

  • Introduced 3504, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2016, in the 114th Congress (summary document)
  • Acknowledged that two policies in the discussion draft were included in the 21st Century Cures Act

April 2017

May 2017

The Senate passed the CHRONIC Act on September 2017; the House introduced a companion bill (H.R. 4579) in December 2017; and the bill was ultimately incorporated into the BBA and passed into law in February 2018.

In some ways, the CHRONIC Act’s increased flexibility for MA plans looks similar to the CMS Call Letter and guidance memos, as it expands supplemental benefits to include broader categories of services and waives uniformity requirements beginning in plan year 2020. The most significant difference is that the CHRONIC Act goes one very important step further by specifying that supplemental benefits “. . . may not be limited to being primarily health related benefits.” The law calls for the Government Accountability Office (GAO) to study the effect of these changes on MA members. CMS acknowledged the overlap in its memos and plans to release future guidance concerning the additional flexibilities related to the CHRONIC Act of the BBA prior to the CY 2020 bid deadline.

The CHRONIC Act has additional provisions that could improve care for Medicare beneficiaries with serious illness, including: the expansion of testing for MA VBID; the permanent authorization of MA Special Needs Plans (plans that limit enrollment to specific sub-sets of Medicare beneficiaries, defined by demographics or diagnosis); the extension and expansion of the Independence at Home demonstration; the expansion of telehealth through multiple provisions; and funding for a General Accounting Office study on serious or life-threatening illness that focuses on longitudinal comprehensive care planning. For a more thorough treatment of these and other provisions in the CHRONIC Act, see the SCAN Foundation’s issue brief.


Considerations for Palliative Care Programs

Combining the strong value case for palliative care with CMS’s new benefit flexibility, we can expect demand for palliative care services to increase in the coming years. With the time it takes for MA plans to complete their analysis and applications, it is unlikely that relevant benefit changes will hit the market before CY 2020, at the earliest. Therefore, palliative care programs should use this time to prepare for and pursue potential new contracting opportunities and/or “high value” designation. Consider the following suggestions:

Contracting with Payers

For home-based palliative care programs, start building new capabilities that can position you as a good partner to MA or any other risk-bearing entity. Programs that have relied on Part B billing will need a different staffing and delivery model to provide reliable, timely, and efficient services for MA members as a supplemental benefit. Partnering with MA plans requires other competencies as well, including: pricing your services, negotiating a contract, and building relationships with payers; enrolling patients who have not been referred by their treating clinicians; and risk-stratifying and “dosing” of palliative care interventions. Programs can learn more about how to adapt their programs for success under risk-bearing models by participating in the CAPC Payment Accelerator on November 7, 2018.

Not all MA plans may be willing to contract directly with individual palliative care programs or providers. Plans are likely to add home-based palliative care as a supplemental benefit by contracting with a larger commercial or vendor entity (such as Aspire Health or Landmark Health). Those vendor entities providing home based palliative care services will need strong clinical partners in local markets. To effectively subcontract with these larger vendor entities, the same capabilities are needed – an efficient staffing model, strong and responsive enrollment, processes and population stratification and dosing capabilities.

Working with Your Health System

For programs within health systems, seek out your system’s contracting teams. Familiarize them with the value that palliative care brings to payers, and strategize how to highlight these services to your contracted MA plans. Many large health systems have Accountable Care Organization (ACO) agreements in place with MA plans, or have an MA plan of their own. Conversations with MA plans can suggest benefit design improvements such as deeming specialty palliative care clinicians as “high-value” providers (remember, this is up to each plan!), or evaluating the addition of home-based palliative care as a supplemental benefit for a targeted subset of members.

By aiding in providing the business case for palliative care as a “high-value service,” palliative care programs can make a strong argument for the development of a supplemental benefit. Also, palliative care programs can advocate for eliminated co-pays or cost-sharing for palliative care services by providing evidence about financial toxicity that comes with serious illness. This evidence and advocacy can work to increase access to palliative care through eliminating financial barriers to care. Programs interested in contracting with payers should make sure that they are identifiable through their state hospice and palliative care association and/or through Mapping Community Based Palliative Care.

In Conclusion

Taken together, these changes to supplemental benefits and uniformity requirements give MA plans greater capacity to match and pay for the right services for members with serious illness. Palliative care programs that can demonstrate to MA plans that they are capable of efficiently providing these services and that palliative care should be considered “high-value” will have the best chance of success in the changing health care landscape. With MA covering more than 18 million beneficiaries and growing, the implementation of this new flexibility can benefit many families. CAPC will be following closely as CMS develops additional implementation guidance.

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