By: Tyler Cromer and Allison Rizer, ATI Advisory
For the near future in today’s pandemic environment, Medicare beneficiaries will be using significantly fewer traditional Medicare benefits. This shift has major implications for Medicare Advantage (MA) plans that must now use premium dollars to meet member needs at home and through non-traditional services. Fortunately, the Centers for Medicare & Medicaid Services (CMS) has gone a long way toward enabling benefit and contracting flexibility for MA plans to help high-risk beneficiaries stay safely in their homes.
A New Year, a Radical Pivot in Care Delivery
2020 is not turning out to be the year that anyone expected as the COVID-19 situation evolves rapidly. When the outbreak began, we anticipated the overrun of our country’s hospital resources, including beds and ventilators. To date, most of those fears have not been realized due to actions across the country to flatten the curve.
In this evolving situation, one thing is clear — individuals at higher risk for severe illness from COVID-19 should stay at home as much as possible for a significant amount of time. Since most Medicare beneficiaries meet the “higher-risk” criteria — either by age or presence of chronic conditions, or both — it is imperative that Medicare does what it can to help these beneficiaries remain safely at home.
To support beneficiaries in staying at home, Medicare has to flex in how and what it pays for, particularly in the Medicare Advantage (MA) program where private insurers continue to receive pre-set monthly payment amounts to cover all Medicare benefits. CMS continues to release guidance that acknowledges the evolving situation by granting broad flexibilities for MA plans to pay for services provided via telehealth and to waive or modify prior authorization, and has loosened requirements around other areas like enrollment and disenrollment. And recently, CMS provided an important new flexibility allowing MA plans to change their benefits mid-year to respond to the needs of their members during the COVID-19 public health emergency.
CMS is using “enforcement discretion” to allow mid-year benefit enhancements and additional benefits provided in connection with COVID-19. CMS guidance highlights that plans can expand or add benefits that address issues or medical needs raised by COVID-19, such as meal delivery and medical transportation services. These benefits must be provided uniformly to similarly situated enrollees.
Flexibility of Supplemental Benefits Can Help Individuals Shelter-at-Home
New non-medical supplemental benefits are an important tool for MA plans, as they consider how to adapt benefit packages to respond to COVID-19. These new benefits result from two separate actions:
- CMS’ guidance that allows a broader swath of supplemental benefits to be provided as “primarily health-related” supplemental benefits; and
- Congress’ actions through the CHRONIC Care Act to create Special Supplemental Benefits for the Chronically Ill (SSBCI).
Because of these expansions, plans now have authority to pay for benefits they’ve never been able to include before – in-home supports such as help with laundry or activities of daily living, extended meals and food, home modifications, and transitional supports such as housing, just to name a few.
This supplemental benefit flexibility combined with the expected decrease in other medical expenditures means MA plans have a unique opportunity during this crisis — to pivot in a way that provides the services Medicare beneficiaries need to stay safely in their homes. MA plans created their benefit packages and priced their premiums in a pre-COVID-19 world assuming Medicare beneficiaries would utilize certain services, but in this rapidly evolving crisis, beneficiaries need a different service mix: health care visits and other services delivered via telehealth, more delivered meals than dental or vision visits, more in-home services than transportation.
MA plans can use their supplemental benefit flexibilities in different ways. For example, when a beneficiary does need to seek medical treatment in a hospital for an acute event, plans could use supplemental benefits to provide housing supports to transition a member back into the community faster. Where social isolation is an issue, plans can provide services such as calls and outreach, or virtual companionship. Where a member is sheltering in place, supplemental benefits can include delivered meals or groceries.
Maximizing Opportunities in a Rapidly Evolving Care Delivery Environment
Actions to flatten the curve to address COVID-19 risks, including staying at home as much as possible, are reducing health care utilization and, at least temporarily, changing the face of the nation’s health care delivery system. Milliman projects a $75 billion net reduction in national medical costs for 2020 and as much as $575 billion if the deferral and elimination of care continues through the end of the year. Change is afoot across the health care delivery system, and is perhaps most dramatic for organizations, like MA plans, serving high-risk populations.
For MA plans, making mid-year benefit changes can be daunting, given the overall uncertainty of the COVID-19 situation. But through these changes, MA plans have a great opportunity to provide non-medical supplemental benefits that are meaningful right now. With the decreased utilization of health care resources in facilities and public settings, MA plans must consider how to redirect resources to maintain the integrity of their contracts with CMS, meet medical loss ratio requirements, and continue to meet the needs of members. Fortunately, new non-medical benefits are an option and mid-year benefit enhancements and additions provide the pathway necessary to do so. It’s the right thing to do — for vulnerable Medicare beneficiaries, for the Medicare program, and for our communities.
For more on how plans can use these benefits and for recommendations to increase the availability and impact of these benefits, please see the issue brief: Meeting Medicare Beneficiary Needs During COVID-19: Using Medicare Advantage Supplemental Benefits to Respond to the Pandemic.