The Centers for Medicare and Medicaid Services today finalized payment updates to Medicare Advantage and Part D plans for 2020.
MA rates increase 2.53 percent. This includes the phasing-in of a risk adjustment model that takes into account the number of chronic conditions a person has, according to CMS Administrator Seema Verma.
CMS originally had released a rate increase of 1.59 percent.
The effective growth rate increased from 4.59 percent in the advance notice, to 5.62 percent today. Verma said the reason for the change is that CMS is continually updating information.
However, the biggest changes for Medicare Advantage insurers is in their ability to offer additional, non-health benefits to members who have a chronic condition, if there is a reasonable expectation of improving or maintaining the health or overall function of the enrollee. Plans can address the social benefits of health in these tailored benefits.
For example, beneficiaries could now receive transportation for non-medical needs like grocery shopping and home environment services to cover home air cleaners and carpet shampooing for asthma sufferers.
WHY THIS MATTERS
Today’s supplemental benefit flexibility gives Medicare Advantage plans an edge in competition over traditional Medicare fee-for-service.
The flexibility in today’s rule is due to legislation in the Bipartisan Budget Act, Verma said.
Asked why Congress would allow MA plans to have an edge in offering benefits over traditional Medicare fee-for-service, Verma said fee-for-service is an open-ended benefit program while MA is capped and is a value-based payment systems. CMS supports allowing the flexibility for plans to address the social determinants of health in a value-based arrangement, she said.
The varying benefits are also expected to spur competition between MA plan offerings.
Medicare Advantage is a growing program both for seniors and for insurers, with CMS not-so-subtly promoting the private health insurance option.
Average Medicare Advantage premiums are at their lowest in six years, Part D premiums are at their lowest in three years, and plan choices have increased, CMS said today.
WHAT ELSE YOU NEED TO KNOW
CMS calculates risk scores using diagnoses submitted by Medicare fee-for-service providers and by MA organizations.
CMS is including encounter data in calculating the risk scores despite objections by some stakeholders. For 2020, CMS will blend 50 percent of the risk score calculated using diagnoses from encounter data, the RAPS Risk Adjustment Processing System inpatient diagnoses and FFS diagnoses, with 50 percent of the risk score calculated with diagnoses from RAPS and FFS.
For 2020 CMS expects the underlying coding trend to increase risk scores, on average by 3.3 percent.
PART D
The payment and policy updates include actions to address the opioid crisis, encouraging Part D plans to provide at least one opioid-reversal agent on a lower cost-sharing tier.
CMS said its overutilization policies have resulted in a 14 percent decrease in the share of Part D beneficiaries using opioids between 2010 and 2017 (36.3 percent to 31.3 percent), with the largest decrease from 2016 to 2017 (5 percent).
TREND
Starting this year, Medicare Advantage plans could offer supplemental benefits that are not covered under Medicare Parts A or B, such as adult day health services, and/or in-home support services under an expanded definition of supplemental benefits.
The updates released today continue the Trump administration’s efforts to increase competition among Medicare Advantage and Part D plans. CMS said.
ON THE RECORD
“Today’s changes give plans the ability to be innovative and offering benefits and services that address social determinants of health for people with chronic disease,” Verma said. “With Medicare Advantage enrollment at an all-time high, plans need greater flexibility in offering benefits that they focus on preventing disease and keeping people healthy.”
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com