Medicare, enabled by new laws and rules, is paving the wave for huge changes in Medicare Advantage (MA) plans. Beginning next year, these plans will be permitted for the first time to broadly cover non-medical expenses that can help Medicare enrollees improve their health.
Commonly cited examples include paying for transportation to help people get to doctors’ appointments, healthful food delivered to home-bound MA enrollees, and in-home safety measures such as bathroom grab bars. But the list of possible benefits is much more expansive. Health experts have long argued that spending money on such items can reduce overall Medicare spending by leading to improved health outcomes.
These tools are being offered to MA insurers but not to users of original Medicare, which includes Parts A and B of Medicare. Right now, MA plans have about a third of the market and original Medicare the other two-thirds.
The availability of non-medical benefits will greatly favor MA insurers, experts project, boosting their percentage of total Medicare enrollees. In addition, the new rules will permit MA plans to offer different benefits to different groups of enrollees – another big change in how Medicare works.
Further, Medicare will be expanding coverage by MA plans of telehealth services, seen as a cost-effective way to deliver health care and a boost to seniors who want to age in place in their homes.
The push toward Medicare Advantage
If you think the government is favoring MA insurers, you are correct. The key reason is that MA plans are based on managed medical care that can tie services to health outcomes. Original Medicare has been a fee-for-service program that is not structured to measure such outcomes, although it has experimented with accountable care programs that could be expanded to furnish such benefits and performance metrics. Medicare advocacy groups generally oppose depriving original Medicare beneficiaries from receiving coverage for non-medical health needs.
The push toward MA plans is also fueled by rising federal and state health care spending. While they currently cost the federal government more than original Medicare, this price gap has narrowed in recent years.
MA plans are seen as a better vehicle for controlling future costs and managing health care delivery than original Medicare. They often require care to be provided by a limited network of plan doctors, hospitals, and other caregivers. Original Medicare, by contrast, covers enrollees anywhere in the country who participate in Medicare.
Despite possible network limitations for enrollees, MA plans have been found in some research studies to produce better health outcomes than original Medicare. As compared with the government contractors who oversee original Medicare, private insurers who run MA plans often do a better job of monitoring patient health and providing targeted care to sick and other high-risk enrollees. Evidence also exists, however, that some extremely sick patients fare better using original Medicare than MA plans.
Why the expansion is noteworthy
MA insurers are now finalizing their 2019 offerings in negotiations with the Centers for Medicare & Medicaid Services (CMS), which regulates the plans. There have been no specific announcements about the specifics of their 2019 offerings, which generally are revealed in the fall after CMS has finalized 2019 plan offerings available through Medicare’s annual open enrollment season, which begins October 15.
However, it’s possible 2019 will bring only modest changes. It’s not clear, for example, how quickly demand for non-medical services will develop, nor how the profitability of MA plans would be impacted by covering these new services.
But make no mistake. This shift is a big deal.
In a planning document in late April, CMS laid out the outlines of the kinds of things it will permit plans to cover.
“Beginning in CY [calendar year] 2019, CMS is expanding the definition of ‘primarily health related’ to consider an item or service as primarily health related if it is used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and health care utilization,” the agency said. “A supplemental benefit is not primarily health related under the previous or new definition if it is an item or service that is solely or primarily used for cosmetic, comfort, general use, or social determinant purposes.”
One of Medicare’s principal shortcomings, according to senior advocacy groups, is that it does not cover long-term care that is custodial and not medically required. Such care is provided to low-income seniors through Medicaid and is expected to become a growing burden on the federal budget. More affluent families either pay for long-term care themselves or use private long-term care insurance.
The expansion of non-medical benefits is noteworthy for expressly putting the agency’s foot in the door as a provider of at least limited long-term care services and supports. “For example,” the CMS document said, “organizations may decide to offer some items and services that may be appropriate for enrollees who have been diagnosed with needing assistance with Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL).” Such conditions are widely used as benchmarks in determining a person’s need for long-term care.
Overall, these newly expanded covered services must be recommended by a physician or other licensing medical professional, and MA plans are likely to tightly manage eligibility as part of tailored care programs for individual plan members.
Keep in mind that MA plans have substantial control in identifying people in their plans who would be eligible for such covered benefits. This is not a free trip through the health care candy store.
Here’s a summary of specific coverage areas the agency provided, including direct quotes of explanatory language from the planning document. These details strike me as truly game-changing.
1. Adult day care services
Services provided outside the home such as assistance with ADLs/IADLs, education to support performance of ADLs/IADLs, physical maintenance/rehabilitation activities, and social work services targeted to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and health care utilization. Recreational or social activities or meals that are ancillary to primarily health-related services and items may also be provided, but the primary purpose of adult day care services must be health-related and provided by staff whose qualifications and/or supervision meet state licensing requirements. Transportation to and from the adult day care facility may be provided and should be included.
2. Home-based palliative care
Home-based palliative care 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). Medicare covers hospice care if a doctor and/or the hospice medical director certify the patient is terminally ill and has six months or less to live.
3. In-home support services
In-home support services to assist individuals with disabilities and/or medical conditions in performing ADLs and IADLs within the home to compensate for physical impairments, ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and health care utilization. Services must be provided by individuals licensed by the state to provide personal care services, or in a manner that is otherwise consistent with state requirements.
4. Respite support for caregivers of enrollees
Respite care provided through a personal care attendant or the provision of short-term institutional-based care, as appropriate, to ameliorate the enrollees’ injuries or health conditions, or reduce the enrollees’ avoidable emergency and health care utilization. Respite care should be for short periods of time (e.g., a few hours each week, a two-week period, a four-week period) and may include services such as counseling and training courses for caregivers of enrollees.
5. Medically approved non-opioid pain management
Medically approved non-opioid pain treatment alternatives, including therapeutic massage furnished by a state licensed massage therapist. “Massage” should not be singled out as a particular aspect of other coverage (e.g., chiropractic care or occupational therapy) and must be ordered by a physician or medical professional in order to be considered primarily health related and not primarily for the comfort or relaxation of the enrollee. The non-opioid pain management item or service must treat or ameliorate the impact of an injury or illness (e.g., pain, stiffness, loss of range of motion).
6. Stand-alone memory fitness benefit
Memory fitness benefit may be incorporated as a component of a health education benefit and/or offered as a standalone benefit. The benefits and activities must be primarily for the prevention, treatment, or amelioration of the functional/psychological impact of injuries or health conditions.
7. Home and bathroom safety devices and modifications
Non-Medicare-covered safety devices to prevent injuries in the home and/or bathroom. Plans may also offer installation. The benefit may include a home and/or bathroom safety inspection conducted by a qualified health professional, in accordance with applicable state and Federal requirements, to identify the need for safety devices and/or modifications, as well as the applicability of the device or modification to the specific enrollee’s needs and home.
Examples of safety devices and modifications include: shower stools, hand-held showers, bathroom and stair rails, grab bars, raised toilet seats, temporary/portable mobility ramps, night lights, and stair treads. The plan must briefly describe the proposed benefit and enrollee criteria for receiving these additional benefits (e.g., enrollee at risk of falls) in the PBP.
Home modifications must not include items or services that are capital or structural improvements to the home of the enrollee (e.g., easy use door knobs and faucets, permanent ramps, and widening hallways or doorways). In addition, items such as smoke detectors and fire alarms are not permitted.
Transportation to obtain non-emergent, covered Part A, Part B, Part D, and supplemental benefit items and services to accommodate the enrollee’s health care needs. For example, transportation for physician office visits. Transportation must be arranged, or directly provided, by the plan and may not be used to transport enrollees for purposes that are not health related. The plans also may include a health aide to assist the enrollee to and from the destination. Transportation is limited to the provision of medical services and may not be for items and services such as groceries or banking.
9. Over-the-counter health-related items and medications
Health-related items and medications that are available without a prescription, and are not covered by Medicare Part A, Part B, or Part D. In addition, . . . we are clarifying that assistive devices, such as pill cutters, pill crushers, pill bottle openers, and personal electronic activity trackers are permitted. Activity trackers may be offered as a standalone benefit or as part of a fitness benefit.
A recent article in the New England Journal of Medicine cautioned that CMS would need to closely monitor how MA plans respond to their new coverage options. The higher costs of providing non-medical benefits, for example, could cause some plans to minimize these new benefit offerings for fear of attracting sicker beneficiaries, particularly when it comes to providing benefits for long-term supports and services (LTSS).
“They may decline the opportunity to broaden their benefit packages to cover LTSS for fear of unfavorable risk selection — or worse, may use this flexibility to engage in further selection of healthier patients,” the article said. “Alternatively, they may pressure policymakers to identify a way of including beneficiaries’ functional impairments in risk-adjustment calculations or to create equivalent benefits in traditional Medicare to counteract the incentive for sicker beneficiaries to enroll in Medicare Advantage plans.”
Regardless of the pace of change, the direction of new covered benefits will clearly favor people who wish to age in place in their homes and not in assisted living facilities.
Julie Smith, head of Homewatch CareGivers, a national franchise providing non-medical home caregiving services, said in an interview that the CMS shift to covering non-medical services “is an enormous benefit.”
“Helping a senior age at home is one of the lowest-cost methods for society” to provide such services, she told me.
Smith said the changes over time would provide an enormous boost for the home care industry. They also are likely, she added, to lead to substantial new regulatory oversight, care standards, and certification requirements for what is now a loosely defined industry whose services currently are licensed by only about half the states.