This post was co-written by Joseph Burns (@jburns18), a Massachusetts-based independent journalist and AHCJ’s topic leader on health insurance. He welcomes questions and suggestions on insurance resources and tip sheets at email@example.com.
You may have seen the April 2 press release from the Centers for Medicare and Medicaid Services that highlighted the steps it is taking to, among other efforts, advance a more patient-centered approach, reinterpret standards for supplemental benefits under Medicare Advantage plans, lower prescription drug prices and address the opioid crisis. While that’s a lot to promise in a page and a half, more details are available in CMS’ 2019 Medicare Advantage and Part D Rate Announcement and Call Letter. Be forewarned, however, that many journalists may need experts to interpret the implications of what CMS calls its call letter.
Overall, the announcement is good news for Medicare Advantage plans, which get a pay raise of 3.4 percent to 6.5 percent, according to Bob Herman at Axios. And, it could be extremely good news for beneficiaries, or at least for those who are in the right plan for the right initiative. Some strategies, however, may leave millions of beneficiaries wondering, “what about me?”
Two key efforts, boosting supplemental benefits and lowering Part D drug prices, under Medicare Advantage plans are worth reviewing closely.
CMS says it will review current MA benefits to allow plans to “include additional services that increase health and improve quality of life, including coverage of non-skilled in-home supports and other assistive devices.” The agency is expanding its definition of “primarily health related” to now allow supplemental benefits which compensate for physical impairments, diminish the effect of injuries or health conditions and reduce avoidable emergency room use. As Susan Jaffe wrote in this comprehensive Kaiser Health News story, such assistance could conceivably range from personal care assistants to grocery delivery.
“What about the people in traditional Medicare?” asked Lindsey Copeland, federal policy director for the Medicare Rights Center. “This certainly is going to make things more complicated for beneficiaries trying to figure out what the best plan is for them.”
It’s easier to change things in Medicare Advantage than in traditional Medicare because of the way the programs are structured and the statutory requirements, Copeland explained in a phone interview. However, she cautioned that these new benefits could lead to greater confusion, as plans move away from standardization. “This is going to introduce even more variance in the marketplace, all the while leaving behind the people in traditional Medicare who won’t have access to any of these supplemental benefits,” she said. Some of those enrolled in regular Medicare receive supplemental help through Older Americans Act programs, she added, but the number of participants is small compared with those in Medicare Advantage plans.
There’s certainly evidence that these kinds of home- and community-based services can save costs, but “the devil’s going to be in the details,” Copeland said. As Medicare Advantage plans test some of these new services and benefits, they’ll likely find some are more cost effective than others. So they could be available one year and not the next. Or, some current services could be discontinued to offset the cost of new benefits. “It’s yet to be seen how plans decide to structure all of this new flexibility,” Copeland said.
From the home health industry perspective, expansion of supplemental benefits is good news, as Home Health Care News reported. Many services which could help keep older adults safe and healthier at home, such as assistance with activities of daily living, were not covered unless skilled nursing also was required. Anyone who wanted this type of help had to pay for it privately.
While AARP was generally supportive of the changes to both Medicare and Medicare Advantage, “we have urged CMS to implement appropriately, with careful oversight to ensure a transparent process and equal accessibility to any supplemental benefits. Lack of oversight and transparency could lead to consumer confusion and risk segmentation,” Megan O’Reilly, director of the organization’s federal health and family team said in an emailed statement.
Regarding changes CMS is proposing to the drug benefit program for MA members, Kerry Dooley Young at MedPage Today had a good explanation of how the call letter may help beneficiaries enrolled in Medicare Part D get generic drugs and have access to more pharmacies.
“CMS now will allow certain low-cost generic drugs to be substituted into formularies at any point during the year, so people enrolled in Part D plans can more easily obtain them,” Young wrote. Also, Young quoted CMS Administrator Seema Verna who said on a conference call with reporters on April 2, “As new generics come on the market, they can have immediate access to them and not have to wait until the open enrollment period.”
In addition, CMS will increase competition among pharmacies by clarifying the “any willing provider” rule to expand the number of pharmacies for Part D members, she added.
Another interesting element regarding Part D is the Trump administration’s efforts to pressure insurers and pharmacy benefit managers to pass along discounts to consumers, Young added. She quoted the following from the fiscal 2019 budget of the federal Department of Health and Human Services, included this comment, “Part D sponsors are allowed, but not currently required, to apply rebates and other price concessions at the point-of-sale to lower the price upon which beneficiary cost-sharing is calculated. To date, sponsors have only very rarely elected to include rebates and other price concessions in the negotiated price at the point of sale,” HHS said.
Left unsaid is whether the federal government will require Part D plans to pass along rebates at the point of sale. Such a requirement could have a significant effect on what Part D members pay for the cost of drugs at pharmacies.
For The Washington Examiner, Robert King reported that the call letter will reduce the maximum amount beneficiaries pay for biosimilar drugs. Biosimilars are intended to be lower-cost versions of biologics (or biological products), which are drugs made from living cells. Here’s a great explainer about biosimilars from Michelle Hoffman at Stat News..
King also reported that CMS announced efforts to control the opioid epidemic by letting Part D require beneficiaries who are at risk of addiction to use only certain prescribers or pharmacies for opioid prescriptions.
For now, advocates and insurers are taking a wait-and-see approach, since final guidance from CMS is pending.