Clinicians, researchers, and health policy experts increasingly argue that nonmedical, social factors such as housing stability and access to food and transportation can have a significant impact on health and health outcomes, particularly for the elderly and disabled individuals that receive health care coverage through the Medicare program.
Although there is widespread support to address social needs for vulnerable populations, the Medicare program has not historically covered benefits to address these needs. Many in the policy community have looked to Medicare Advantage as a vehicle to integrate health and social services due to its more flexible benefit and financing mechanisms.
Unlike Traditional Medicare, Medicare Advantage plans, which provide coverage for over 40% of all Medicare beneficiaries,1 may offer plan-financed supplemental benefits which are not covered by the Medicare program. While these benefits are voluntary and the Medicare program does not consider these services part of the core Medicare benefit package,2 Medicare Advantage organizations are increasingly expanding their supplemental benefit offerings to better serve their membership and differentiate themselves from Traditional Medicare and other Medicare Advantage offerings. In addition, because Medicare Advantage plans are financially responsible for the total cost of care of the population enrolled, many see the potential of these supplemental benefits to reduce avoidable utilization of high-cost services and improve enrollee engagement.
Until recently, the scope of Medicare Advantage plans’ supplemental benefits was limited to “primarily health-related” services,3 which typically included dental, hearing, and vision care. Over the last several years, Congress and the Centers for Medicare and Medicaid Services (CMS) have taken several actions to provide Medicare Advantage plans greater flexibility to provide additional services beyond health-related services (“flexible benefits”). For example, Medicare Advantage plans are permitted to provide benefits such as caregiver supports, transportation, food supports, and home modifications to prevent falls for enrollees that meet certain clinical criteria.
Many stakeholders have called for expansions to flexible benefit policies, including those that would: 1) increase the scope of benefits permitted, 2) expand eligibility criteria for flexible benefits to include socioeconomic and environmental factors, and 3) extend coverage to beneficiaries in Traditional Medicare. The Biden administration has expressed commitment to policies to promote health equity and reduce disparities accessing high quality care; some believe these supplemental benefits may provide an avenue to help achieve these goals. However, while stakeholders see promise in the ability of flexible benefits to help improve outcomes for beneficiaries with complex needs, there is limited evidence and data to conclude near-term or long-term effects on outcomes and total cost of care. As the Medicare Hospital Insurance Trust Fund faces insolvency in 2026, and policymakers look to ways to contain Medicare spending, some have called for a greater understanding of the value and impact of flexible benefits.
The past few years have been a period of experimentation. In 2020, the first year these benefits were available, fewer than 1 in 5 enrollees were in a plan offering these benefits, according to an analysis conducted by Health Management Associates (HMA), with the support of Arnold Ventures.4 The share of Medicare Advantage enrollees in a plan offering these benefits increased significantly in 2021, but the vast majority of enrollees continue to receive coverage through a plan that does not offer these benefits.5 Medicare Advantage organizations that offered the benefits generally chose to do so in a cautious manner and in a small number of regions.6 Through stakeholder interviews, HMA found that many Medicare Advantage organizations, beneficiary advocates, and researchers view limited data and evidence of these benefits as the primary barrier to widespread adoption, access, and relevance.7
To identify the policy levers and actions to build, manage, and disseminate a stronger evidence base to inform the evaluation of supplemental benefits and promote wider adoption, HMA convened a panel of experts, which included Medicare Advantage organization executives, a consultant actuary, health policy researchers, social service providers and network aggregators, and former government officials. The panel was specifically tasked to discuss: 1) the data points needed to develop a better evidence base on the use and impact of these benefits; 2) where the needed data currently resides and/or how it could be developed; and 3) how plans and other stakeholders could be encouraged and/or required to facilitate data collection efforts. While there were different points of view expressed by the round table, several themes and recommended actions emerged from the discussion:
- The panel suggested that the federal government could play a role in collecting and disseminating more robust data on Medicare Advantage enrollees’ use and experience of these benefits. Panelists questioned the cost of benefits, as well as the impact of these benefits on patient experience, self-reported health, utilization of medical services, and utilization of social service benefits offered by other government programs. Doing so would likely mean a new, multisector data aggregation, which might draw from data generated by social service providers, health systems, electronic health record vendors, and other stakeholders.
- There was broad consensus that collection efforts should ensure that the data is standardized in order to enable meaningful comparisons across benefit offerings and plans. Some on the panel urged greater standardization of offered benefits by Medicare Advantage plans to facilitate measurement and comparison of benefits across Medicare Advantage plans. Today, these benefits vary across plans in both the design and generosity of these benefits, which challenges researchers’ ability to assess what benefit designs best serve Medicare beneficiaries with complex needs, and makes beneficiary decision making more difficult as well.
- Many on the panel also urged greater facilitation of and accountability for Medicare Advantage collection and reporting of members’ use and experience with these benefits. For example, at a minimum, CMS could require that Medicare Advantage plans report supplemental benefit utilization in their encounter data submissions. Some suggested that CMS should, through additional measures in the Medicare Advantage Star Ratings program, encourage accurate and timely reporting. Other experts argued that a condition of Medicare Advantage plans offering these benefits should be the required participation of data sharing and learning collaboratives for the broader policy community.
Experts acknowledged that the current data infrastructures may not be equipped to support the goals discussed above but urged the rapid collection of limited data while more sophisticated measurement systems are developed. They argued that is critical to advance these data collections efforts now while these new benefits are being developed by more plans. Without meaningful data and analysis on these new benefits' impact, the Medicare program may not be able to assess what long-term changes may need to be made to the program to ensure that it meets the needs of its population, particularly those with more complex needs. The Medicare program has taken very important steps to modernize its benefits, but these efforts may go to waste without more robust data and measurement systems.
HMA analysis of May 2021 CMS Medicare Advantage enrollment data↩︎
Medicare Advantage plans that bid below the benchmark (the CMS target against which plans bid to provide coverage of Medicare A/B services) receive a percentage of the difference between the bid and benchmark in the form of a rebate. These rebate dollars are used to reduce premiums and cost-sharing and to finance supplemental benefits. Rebate amounts range between 50% and 70% of the difference between the bid and the benchmark; this percentage is determined by a plan’s star rating. Plans with higher star ratings receive a higher percentage of the difference as a rebate↩︎
Historically, the Centers for Medicare & Medicaid Services (CMS) defined supplemental benefits as those that are “primarily health-related,” or benefits that are intended to prevent, cure, or diminish an illness or injury. In 2019, under existing authority, CMS expanded the definition of “primarily health related” to include items and services intended to: 1. Diagnose or compensate for physical impairments; 2. Ameliorate the functional/psychological impact of injuries or health conditions; or 3. Reduce avoidable emergency and healthcare utilization↩︎
Ipakchi, N., Blum, J., Hammelman, E. and Hsieh, M. “Medicare Advantage Supplemental Benefit Flexibilities: Adoption of and Access to Newly Expanded Supplemental Benefits in 2020.” Health Management Associates, May 2020↩︎
HMA analysis of CMS PBP Benefits – 2021, Quarter 2 data↩︎
Ipakchi, N., Blum, J., Barth, S. and Hsieh, M. “Medicare Advantage Supplemental Benefit Flexibilities: An Early Assessment of Adoption and Policy Opportunities for Expanded Access.” Health Management Associates, January 2021↩︎