Medicare Advantage Plans Cleared To Go Beyond Medical Coverage — Even Groceries

By Susan Jaffe
Kaiser Health News, April 3, 2018

Air conditioners for people with asthma, healthy groceries, rides to medical appointments and home-delivered meals may be among the new benefits added to Medicare Advantage coverage when new federal rules take effect next year.

On Monday, the Centers for Medicare & Medicaid Services (CMS) expanded how it defines the “primarily health-related” benefits that insurers are allowed to include in their Medicare Advantage policies. And insurers would include these extras on top of providing the benefits traditional Medicare offers.

“Medicare Advantage beneficiaries will have more supplemental benefits making it easier for them to lead healthier, more independent lives,” said CMS Administrator Seema Verma.

Many Medicare Advantage plans already offer some health benefits not covered by traditional Medicare, such as eyeglasses, hearing aids, dental care and gym memberships. But the new rules, which the industry sought, will expand that significantly to items and services that may not be directly considered medical treatment.

CMS said the insurers will be permitted to provide care and devices that prevent or treat illness or injuries, compensate for physical impairments, address the psychological effects of illness or injuries, or reduce emergency medical care.

Although insurers are still in the early stages of designing their 2019 policies, some companies have ideas about what they might include. In addition to transportation to doctors’ offices or better food options, some health insurance experts said additional benefits could include simple modifications in beneficiaries’ homes, such as installing grab bars in the bathroom, or aides to help with daily activities, including dressing, eating and other personal care needs.

But patient advocates including David Lipschutz. senior policy attorney at the Center for Medicare Advocacy, are concerned about those who may be left behind. “It’s great for the people in Medicare Advantage plans, but what about the majority of the people who are in traditional Medicare?” he asked. “As we tip the scales more in favor of Medicare Advantage, it’s to the detriment of people in traditional Medicare.”

https://khn.org…

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Fact Sheet: 2019 Medicare Advantage and Part D Rate Announcement and Call Letter

CMS.gov, April 2, 2018

CMS is committed to unleashing and strengthening the Medicare Advantage and Part D programs by giving Medicare beneficiaries flexibility so that they can make informed healthcare choices. The policies adopted through the Rate Announcement and Call Letter provide more choices for beneficiaries, a greater number of affordable options, and new benefits to meet their unique health needs.

Expected Average Change in Revenue

* Per February 1, 2018 Advance Notice: 1.84%
* Per April 2, 2018 Rate Announcement: 3.40%

The Expected Average Change in Revenue reported above does not include an adjustment for underlying coding trend. For 2019, CMS expects the underlying coding trend to increase risk scores, on average, by 3.1%.

2019 Part C Risk Adjustment Model

CMS proposed changes to the CMS-HCC Risk Adjustment model that is used to pay for beneficiaries enrolled in Medicare Advantage plans. For 2019, CMS is finalizing an updated model that incorporates most of the proposed changes to the Part C risk adjustment model, such as adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model, as well as a variety of additional technical updates.

Using Encounter Data

As noted above, the risk adjustment model we are finalizing makes technical updates, including calibrating the model with more recent data, selecting diagnoses with the same method used for encounter data, and supplementing encounter data used in payment with inpatient data submitted to the historical risk adjustment data collection system (the Risk Adjustment Processing System (RAPS)).

Historically, CMS has used Medicare Advantage diagnoses submitted into CMS’s RAPS. In recent years, CMS began collecting encounter data from Medicare Advantage organizations, which also includes diagnostic information. In 2016, CMS used diagnoses from encounter data to calculate risk scores, by blending 10% of the encounter data-based risk scores with 90% of the RAPS-based risk scores. For 2017 and 2018, CMS continued to use a blend to calculate risk scores, by calculating risk scores with 25% encounter data and 75% RAPS in 2017, and 15% encounter data and 85% RAPS in 2018. For 2019, CMS is finalizing the proposal to calculate risk scores by adding 25% of the risk score calculated using diagnoses from encounter data and FFS diagnoses with 75% of the risk score calculated with diagnoses from RAPS and FFS diagnoses. Since the quality of the encounter data has improved, CMS believes it is appropriate to move forward with the proposed increased percentage of encounter data in the blend. CMS will also calculate the encounter data-based risk scores exclusively with the new risk adjustment model, as proposed, while maintaining use of the current risk adjustment model for calculating risk scores with RAPS data.

Coding Pattern Adjustment

Each year, as required by law, CMS makes an adjustment to plan payments to reflect differences in diagnosis coding between Medicare Advantage organizations and FFS providers. In CY 2019, CMS is finalizing the proposal to apply a coding pattern adjustment of 5.90 percent.

Fostering Innovation in Benefit Design: Expanding Health Related Supplemental Benefits
The policy change announced in the Call Letter will help drive patient access to types of services they do not have today. Some Medicare Advantage plans offer supplemental benefits so that enrollees have more healthcare benefits and options than what they would receive under the Medicare FFS Program. Medicare Advantage plans use rebate dollars and plan premiums to fund supplemental benefit offerings. The statute limits supplemental benefits to health care benefits; CMS interprets “supplemental healthcare benefit” as an item or service (1) not covered by Original Medicare, (2) that is primarily health related, and (3) for which the Medicare Advantage plan must incur a direct medical cost.

Previously, CMS has not allowed an item or service to be eligible as a supplemental benefit if the primary purpose includes daily maintenance. However, in the final Call Letter, CMS discusses a reinterpretation of the statute to expand the scope of the primarily health-related supplemental benefit standard. Under this reinterpretation, CMS would allow supplemental benefits if they are used to diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization. This expansion will effectively increase the number of allowable supplemental benefit options and provide patients with benefits and services that may improve their quality of life and health outcomes.

Uniformity Flexibility

The final Call Letter reminds plans that CMS has determined that plans can provide certain enrollees with access to different benefits and services. Specifically, Medicare Advantage plans can offer targeted cost sharing and supplemental benefits for specific enrollee populations based on health status or disease state in a manner that ensures that similarly situated individuals are treated uniformly. This flexibility helps Medicare Advantage plans better manage health care services.

https://www.cms.gov…

CMS Final Call Letter 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies (270pages):
https://www.cms.gov…

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Fact Sheet: CMS Finalizes Policy Changes and Updates for Medicare Advantage and the Prescription Drug Benefit Program for Contract Year 2019 (CMS-4182-F)

CMS.gov, April 2, 2018

On April 2, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare Advantage (MA) and the prescription drug benefit program (Part D) by promoting innovation and empowering MA and Part D sponsors with new tools to improve quality of care and provide more plan choices for MA and Part D enrollees.

Unnecessary Limits on Medicare Advantage Plan Variety

Current regulations place unnecessary limits (called “meaningful difference” requirements) on the variety of plans an MA organization can offer in the same county. Beginning in CY 2019, CMS is eliminating the requirement that MA plans offered by the same organization in the same county comply with unnecessary limits requiring differences among the organization’s plans beginning with CY 2019 MA bid submissions. CMS is concerned the current requirement may result in organizations reducing the value of certain benefit offerings in order to make their benefit packages comply with these unnecessary limits. This may include instances where differences in benefit packages exist but are not incorporated in the agency’s evaluation (e.g., unique benefit packages based on enrollee health conditions). CMS expects that eliminating the meaningful difference requirement will improve the plan options available for beneficiaries. New flexibilities in benefit design and more sophisticated approaches to consumer engagement and decision-making should help beneficiaries, caregivers, and family members make more informed plan choices.

Flexibility in the Medicare Advantage Uniformity Requirements

CMS has reinterpreted uniformity requirements for Part C benefits offered to MA enrollees. These changes give MA plans new tools to improve care and outcomes for enrollees by allowing MA plans the ability to reduce cost sharing for certain covered benefits, offer specific tailored supplemental benefits, and offer different deductibles for beneficiaries that meet specific medical criteria. This final rule highlights how the new benefit design will be an option for all MA plans.

Updates to the Definition of Marketing

Currently, a variety of materials that are not intended to steer a beneficiary into a particular plan fall under the regulatory definition of marketing and its related requirements, including a statutory requirement that these materials be subject to CMS review. CMS is changing the definition to include only materials that are most likely to lead to a beneficiary to make an enrollment decision. This will allow CMS to focus its oversight efforts on these materials to help ensure that beneficiaries are making the right decisions for their health care needs.

This change lessens the burden of marketing submission on plans and CMS reviewers. To account for those materials that will now fall outside of the new marketing definition, CMS is adopting more appropriate requirements and oversight for a new category of materials and activities called “communications.”

Maximum Out-of-Pocket and Cost Sharing Limits

CMS is revising the regulations controlling maximum out-of-pocket (MOOP) limits, to enable future changes to CMS’s existing methodology of using the 85th and 95th percentiles of projected beneficiary out-of-pocket Medicare Fee-For-Service (FFS) spending beginning no earlier than in CY 2020. CMS will then have authority to change and implement additional levels of MOOP limits, as well as provide flexibility to encourage plan offerings with lower MOOP limits. In addition, CMS will be able to update discriminatory cost sharing standards using a new standard beginning no earlier than in CY 2020.

Default Enrollment

CMS is codifying changes to a current enrollment mechanism that allows MA organizations to provide seamless continuation of coverage for their beneficiaries once they become Medicare eligible.

Restoration of the Medicare Advantage Open Enrollment Period

The 21st Century Cures Act eliminates the existing MA disenrollment period that currently takes place from January 1st through February 14th of every year and, effective for 2019, replaces it with a new Medicare Advantage open enrollment period (OEP) that will take place from January 1st through March 31st annually.

Reducing Unnecessary Paperwork Burden: Medical Loss Ratio

CMS is finalizing the proposal to significantly reduce the amount of MLR data that MA organizations and Part D sponsors submit to CMS on an annual basis. Under these new rules, MA organizations and Part D sponsors will only report the MLR percentage and amount of any remittance owed to CMS for each contract. CMS is also finalizing our proposal to revise the MLR calculation to include in the MLR numerator all expenditures related to fraud reduction activities (including fraud prevention, fraud detection, and fraud recovery) and Medication Therapy Management (MTM) programs.

https://www.cms.gov…

CMS Final Rule CMS-4182-F (1156 pages):
https://www.cms.gov…

Each year the Centers for Medicare & Medicaid Services (CMS) has used a variety of gimmicks to provide the private Medicare Advantage plans with greater reimbursement rates than their costs and what they are statutorily entitled to. This year the padding of the payments is egregiously obscene. In addition, CMS is providing the private plans with much greater flexibility in benefits and out-of-pocket spending for patients. These changes are designed to make the private Medicare Advantage plans much more attractive than the traditional Medicare program, providing them with an unfair competitive advantage.

By spending more on the private plans, their goal is to move a critical threshold of patients out of traditional Medicare wherein they can begin to sharply reduce federal payments to the traditional program, thus privatizing Medicare through the private Medicare Advantage plans. Once the traditional program is destroyed they will move forward with their premium support model (vouchers) which over time will underfund the private plans, gradually shifting much more of the costs to the beneficiaries, but by then it will be too late to abort their scheme. As Speaker Paul Ryan has explained, budget demands will “require” that these reductions be made (in order to accommodate the tax cuts for the rich).

For details, you can read the combined 1462 pages of the Final Rule and the Final Call Letter (I didn’t this time), though the Fact Sheets at the links above can give you the flavor of these actions. You do have to be careful in following their rhetoric. As examples, “reducing unnecessary paperwork” is code language for allowing the insurers to fudge their medical loss ratios, or wasteful marketing materials are relabeled as “communications.”

What is really offensive is that they are taking our tax dollars and giving them to the private insurers so that they can increase benefits and reduce cost sharing for those enrolled in the private plans while they are denying those same benefits and reduced premiums, deductibles, coinsurance, and stop loss coverage for those of us enrolled in the traditional Medicare program. That is patently unfair. If they were honest about wanting true competition between the private plans and the traditional public program they would fund them at the same risk-adjusted level. Instead they are starving the traditional program – a process that will accelerate – while they are enriching the private insurers, though only temporarily until the traditional program is wiped out (then premium support).

Imagine if we improved the benefits in the traditional Medicare program while eliminating premiums and cost sharing, and instead funding it with equitable taxes; then it would be a great program for all of us. It would also get rid of the limited provider networks that are characteristic of the private Medicare Advantage plans, and it would save the costs of their profoundly wasteful administrative excesses and the administrative burden they placed the delivery system. But we will never see this health care nirvana if we sit back and allow our traditional Medicare program to be put through the grinder while the private plans are nurtured with our taxes, only to eventually be cut loose when we no longer have a viable public program.

Think about this. Most of us in the traditional Medicare program who do not have a retiree health plan or who are not qualified for dual Medi-Medi coverage end up having to buy a Medigap plan, which is not cheap considering the relatively meager benefits. Yet those enrolled in the private Medicare Advantage plans have sufficient enough benefits that they do not need a Medigap plan. The tax burden for all of us is essentially the same whether enrolled in the traditional program or in the private Medicare Advantage plans, yet those enrolled in the traditional program are penalized because they have to pay in addition the Medigap premium plus they receive fewer benefits. If Congress were responsible (an oxymoron?) they would distribute our taxes equitably. That means that preferably they should roll Medigap benefits into the traditional Medicare program, or at least they should stop overpaying the private insurers, giving those enrolled in the private plans an extra free ride at the expense of all of us.

Yes, these technical reports are boring, but we cannot ignore what they really represent – a nefarious attempt to destroy our traditional Medicare program. Remember, we’re entering midterm election season. Let your members of Congress know what you think about this injustice.

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