June 13, 2018

Among other things, the CHRONIC Care Act of 2017 will allow Medicare Advantage (MA) plans to offer chronically ill beneficiaries a broader range of services and supports.  One of its main purposes is to integrate medical care with non-medical long-term services and supports (LTSS), which could include everything from vision and hearing aids, transportation services and scooters to environmental modifications such as grab bars and raised toilet seats to better meet the health and well-being needs of chronically ill patients.

These LTSS aren’t directly medical but can significantly impact function and wellness, and addressing them has been shown to reduce hospitalizations and emergency department visits.

The CHRONIC Care Act will allow MA plans to begin offering coverage for these services as early as 2019.  At the same time, it will give MA plans more flexibility to tailor their benefits to specific chronically ill subpopulations, eliminating the requirement to provide uniform benefits to all beneficiaries.

According to an analysis by public health policy researchers published June 7th in the New England Journal of Medicine, the CHRONIC Care Act will enable these health plans to put into action a growing body of evidence indicating that LTSS, including innovative care models, can help chronically ill patients live more safely in the community.  The need is there, the authors note:  47 percent of the MA beneficiary population that has difficulty with ADLs reported they had neither received help nor had an assistive device for at least one ADL, according to the authors’ review of the 2015 Current Medicare Beneficiary Survey.

That the provision of supports to address these needs can now be covered by an MA plan is a positive step.  But the question is whether these changes might also affect risk selection in MA plans that could ultimately stifle efforts to integrate medical and nonmedical care for the benefit of the chronically ill, the authors query.  While “the promise of better outcomes and significant cost savings as a result of reduced hospitalizations and emergency department visits should give the plans opportunities to better serve high-need beneficiaries . . . these changes may also attract the sickest beneficiaries who require the costliest care to switch from traditional Medicare to MA,” they write.  The functional impairments that will be covered by MA plans are associated with significantly higher Medicare spending, even when the patient’s number of chronic conditions is taken into account.

As a result, MA plans may respond either by avoiding broadening their benefits to include LTSS in an attempt to avoid unfavorable risk selection, or they may use the increased flexibility afforded by the CHRONIC Care Act to select healthier patients.  Another possibility is that they may push for inclusion of beneficiaries’ functional impairments in risk-adjustment calculations or for the creation of equivalent benefits in traditional Medicare in order to reduce the incentive for more chronically ill patients to enroll in MA.

According to the authors, one option that has been proposed for addressing the medical and non-medical needs of chronically ill patients is the creation of integrated care organizations that would function much like accountable care organizations (ACOs).

They suggest that “extending the new flexibility [made possible by the CHRONIC Care Act] to ACOs as well as Medicare Advantage plans would enable more organizations to better serve patients who require LTSS.  Such an option could catalyze the movement for integrated care for Medicare beneficiaries and provide an alternative mechanism for testing the value of various models and benefits.”

They note that changes in the payment model to account for substantial increases in the enrollment and retention of beneficiaries with LTSS needs in the MA population may be needed.  Giving MA plans flexibility to offer non-medical services without putting them at risk for all LTSS, such as expensive nursing home care, could provide a more cost-effective way to meet LTSS needs without significantly increasing Medicare spending, they argue.  “Whether Medicare beneficiaries will see the true benefits of this incremental step forward will depend largely on the will and effectiveness of Medicare Advantage plans in integrating care.”