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New Flexibilities for Medicare Advantage Plans

This blog post was written by Managing Principal Mary Hsieh, Senior Consultant Aimee Lashbrook, and Senior Consultant Mary Russell.

In April, the Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2019 Final Rate Announcement and Call Letter for Medicare Advantage (MA) and Part D. The guidance was very good for the industry, with a projected average increase in revenue of 3.4 percent.

The Final Call Letter also included important new flexibilities that will help plans bring more innovative products to market and deliver more comprehensive care to enrollees. As early as next year, plans can offer supplemental benefits under an expanded definition of “primarily health related.”

Then, starting in 2020, plans will no longer be limited by the “primarily health related” standard when providing supplemental benefits to chronically ill enrollees. As directed by the Balanced Budget Act (BBA) of 2018, CMS will allow plans to offer supplemental benefits to chronically ill enrollees so long as they “have a reasonable expectation of improving or maintaining the health or overall function.” Combined with other changes such as a reinterpretation of the uniformity rules, plans will have new tools to address an enrollee’s needs and may target supplemental benefits based on a clinical condition.

Since the Final Call Letter’s release, grocery and home meal delivery, personal care services, and fall prevention devices were some of the potential new supplemental benefit offerings the industry was talking about. CMS provided a non-exhaustive list of allowable supplemental benefits under its new interpretation. Some of the identified supplemental benefits are already available to certain highly integrated Dual Eligible Special Needs Plans (D-SNPs), but reflect a new opportunity for other MA products. The list includes:

  • Adult Day Care Services
  • Home-based Palliative Care
  • In-home Support Services
  • Respite Care
  • Medically-approved Non-opioid Pain Management
  • Stand-alone Memory Fitness Benefit
  • Home and Bathroom Safety Devices and Modifications
  • Transportation
  • Over-the-Counter (OTC) Benefits

CMS also provided additional clarification indicating that a supplemental benefit will not be considered primarily health related under the new interpretation if it is solely or primarily used for cosmetic, comfort, general use, or social determinant purposes.

Plans should also expect further clarification from CMS for CY 2020, when the BBA of 2018 will deliver additional flexibility to provide supplemental benefits to chronically ill enrollees beyond these new benefits now considered primarily health related.

For additional information about the CY 2019 Final Call Letter and other recent regulatory changes, contact us at Medicare@healthmanagement.com.

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