How Changes to Medicare Will Help the Chronically Ill and Disabled: An Explainer

For individuals with chronic conditions, care coordination is vital to their health and can also reduce the need for, and frequency of, costly hospitalizations and acute care episodes. A recent evaluation of Medicare’s Chronic Care Management services benefit found that even after accounting for increased utilization of home health services and outpatient services among patients, average monthly Medicare expenditures for patients receiving chronic care management services decreased during the twelve-months and eighteen-month follow-up periods. The evaluation estimates that the program generated a net-savings of $36 million for Medicare. More than two-thirds of Medicare beneficiaries have two or more chronic conditions, and these beneficiaries result in far more than average spending per beneficiary.

Medicare and Medicaid have made significant progress towards a system that rewards health care providers and plans for improved quality and efficiency, as demonstrated by enrollment growth in managed care plans and the continued proliferation of alternative payment models such as accountable care organizations, or ACOs. Together, Medicare Advantage plans and ACOs served nearly 25 million Medicare beneficiaries in 2015. These changes have made significant progress in providing continuous coordinated care that meets the complex needs of the Medicaid and Medicare population, but barriers persist.

With the feedback of hundreds of stakeholders and two years of work by the Senate Chronic Care Working Group, Sens. Orrin Hatch (R-UT), Ron Wyden (D-OR), Johnny Isakson (R-GA), and Mark Warner (D-VA) introduced S. 870, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 to improve outcomes of Medicare beneficiaries. Companion legislation and related bills such as the Furthering Access to Stroke Telemedicine, or FAST Act, were also advanced in the House. Ultimately these provisions were enacted as part of the Bipartisan Budget Act of 2018. This new law includes significant provisions that offer hope to people living with disabilities or chronic illness by reshaping Medicare coverage, particularly under Medicare Advantage and ACOs. It provides the chronically ill with telehealth services, and non-medical, health-related services such as meals, transportation, or bathroom grab bars, in their benefits package.

In a statement, Hatch said, “The CHRONIC Care Act is a culmination of a bipartisan, committee-wide effort, which included rigorous engagement and feedback from affected stakeholders. This legislation will improve disease management, lower Medicare costs and streamline care coordination services – all without adding to the deficit. Addressing these issues is critical for the increasing number of individuals who live with multiple chronic conditions and will age into the Medicare program over the next two decades.”

Co-sponsor Wyden added, “Senate passage of the Finance Committee’s chronic care bill means seniors with multiple chronic illnesses will have their individual needs better met and get the type of care they need earlier.”

The CHRONIC Care Act combats barriers to care for Medicare and the dual eligible beneficiary population by enhancing the following programs:

• The Independence at Home Demonstration: Expands and extends the program for an additional two years, and from 10,000 beneficiaries to 15,000 beneficiaries. This demonstration provides Medicare beneficiaries with in-home physician visits as a means of avoiding institutional care. In the second year of operation, the demonstration sites successfully reduced average per beneficiary spending by $746 per year. Patients in the demonstration had lower rates of hospital readmissions and fewer emergency department visits for conditions such as diabetes, high blood pressure, asthma, pneumonia, or urinary tract infection. The demonstration acts as a way of improving quality and coordination, while saving Medicare dollars and keeping beneficiaries in their homes.

• Medicare Advantage: Through improved flexibility and predictability, Medicare Advantage plans will be able to provide new tools and strategies to better manage care and provide support for non-clinical social service needs of chronically ill Medicare beneficiaries. The new law allows for Medicare Advantage plans to cover non-traditional benefits for beneficiaries who have been identified as having complex care needs. For example, a beneficiary with limited mobility may be able to get a wheelchair ramp installed and covered under their Medicare Advantage plan.
  • Allows Medicare Advantage plans in every state to tailor coordination and benefits to specific groups of patients, allowing for them to better suit their needs.
  • Permanently authorizes Special Needs Plans where managed care organizations can target and serve Medicare beneficiaries with complex care needs.
  • Requires greater coordination for the chronically ill and dual-eligible beneficiaries enrolled in Dual Eligible Special Needs Plans.

• Accountable Care Organizations: Expands coverage for telemedicine by allowing ACOs to have more flexibility with the use of telehealth technology. The CHRONIC Care Act also expands Medicare Advantage telehealth coverage for all stroke and dialysis beneficiaries in their homes.

The CHRONIC Care Act is beneficial to individuals in Medicare who have complex care needs, while eventually reducing spending by the year 2023. The law addresses issues of coordination between Medicaid and Medicare for the dual-eligible population, and those with chronic conditions. It also expands access to telehealth services in Medicare Advantage, certain ACOs, and for people with stroke symptoms. Enacting these provisions is the first step in breaking barriers for Medicare beneficiaries with chronic conditions to receive the coordinated care they need. With good implementation, the new law will result in cost savings and higher quality of care for these patients.