Improving Care for the Sickest Medicare Beneficiaries Is Imperative

An increasing body of evidence demonstrates that targeting non-medical services, such as tailored meals, to high-risk, high-cost patients can reduce unnecessary medical costs, such as hospital readmissions and emergency department visits.

According to the Centers for Disease Control, Medicare beneficiaries with four or more chronic conditions account for 90 percent of Medicare hospital readmissions and 74 percent of overall Medicare spending.

A Bipartisan Policy Center report released in July 2019, Next Steps in Chronic Care: Expanding Innovative Medicare Benefits, offers another example of how these services could benefit the sickest patients in Medicare fee-for-service (FFS). The report provides recommendations in three issue areas: Medicare-Medicaid integration, targeting of special non-medical benefits for individuals with chronic illness in Medicare Advantage (MA), and notably, creating a pathway to offer non-medical benefits for those with chronic illness to the two-thirds of Medicare beneficiaries in traditional fee-for-service Medicare.

In the report, BPC lays out a legislative roadmap for the steps Congress and the Trump administration can take to add innovative non-medical benefits to Medicare FFS beneficiaries. It also introduces a new analysis by Ananya Health that illustrates the potential savings associated with these evidence-based benefits.

The recommendations build on BPC’s 2016 report on delivery system reform for dual-eligible beneficiaries, and a 2017 report on targeted non-medical services in Medicare Advantage (MA), including social services and supports. Congress adopted many of the recommendations through the Bipartisan Budget Act of 2018, and others were included in regulations and agency guidance.

Today, the 50 percent of individuals with complex needs that are in Medicare FFS lack access to these non-medical benefits. The addition of benefits in MA and two-sided risk arrangements allows plans to test benefits they believe could improve health and functional status, without adding cost to the Medicare program. Any net costs that resulted from these benefits would be borne by the plans themselves. In FFS and alternative payment models (APMs) without shared risk, providers are not responsible for the total cost of care.

In these models, Medicare beneficiaries and taxpayers are potentially liable to pay more when there are added costs, so the addition of non-medical benefits would lead to higher costs for both. To address this problem, BPC recommended that Congress provide authority to the secretary of Health and Human Services to approve coverage of non-medical benefits for individuals in certain instances.

Specifically, coverage and payment for these non-medical benefits for patients with chronic conditions should only be permitted, in BPC’s view, when:

1. There is peer-reviewed evidence that the benefit improves or maintains health or function for a specific subset of patients with certain chronic conditions and/or functional limitations.
2. The Center for Medicare and Medicaid Services (CMS) Actuary certifies coverage would not result in a net increase in Medicare spending.
3. The chronic condition is managed by an Accountable Care Organization (ACO), a comprehensive primary care model, through a chronic care management (CCM) or another payment or delivery model that includes a care management component.

To help build the evidence base for these targeted non-medical benefits for specific populations, we also recommended that MA plans be required to quantify and report outcomes to CMS. CMS should then review and compile evidence and report outcomes. This will give researchers the data they need to determine whether these benefits work for the targeted population and subsequently allow plans to learn which benefits are effective.

BPC contracted with Ananya Health Innovations to determine the feasibility of this approach. Ananya Health examined the impact of medically tailored meals on eligible populations defined by BPC—those with two or more of 11 chronic conditions and one functional limitation—given scientific evidence that medically tailored meals can reduce hospital readmissions for certain patients after hospital discharge. Ananya Health found this service could result in fewer readmissions. Academic literature suggests that the benefit would also lead to reduced emergency-department visits and skilled nursing facility stays, though BPC’s data source did not include these rates for analysis.

The reduced readmission rates translate to a significant savings; on average, every dollar spent on the meals program would save $1.57. This analysis demonstrates that the HHS secretary could identify a benefit for Medicare FFS patient cohorts that qualify as “eligible beneficiaries” that would result in better health outcomes and net savings to Medicare, though additional analysis would be necessary. BPC intends to conduct further analysis of other non-medical benefits over the next year, including home modification and transportation services.

The report also contains additional recommendations concerning dual-eligible plans and Medicare Advantage plans, respectively.

BPC recommends additional flexibility for HHS for Fully Integrated Dual Eligible – Special Needs Plans, or FIDE-SNPs. HHS has stated that it requires more authority and resources to align Medicare and Medicaid services. Though the evidence from Financial Alignment Initiatives is still limited, policymakers can take commonsense steps to help dual-eligible beneficiaries like aligning enrollment dates until more evidence becomes available.

BPC believes that Congress should provide increased training for Medicare Advantage agents, brokers, and other relevant parties that clarify what Special Supplemental Benefits for Individuals with Chronic Illness (SSBCI)—the non-medical benefits for chronically ill in MA—and when they may be covered.

The Bipartisan Budget Act of 2018 gave MA plans the authority to determine and offer these benefits, subject to secretary approval. Advocacy groups, plans, and providers have raised concerns that consumer protection has been lacking following the implementation of SSBCIs—Medicare Advantage beneficiaries have mistakenly enrolled in plans expecting coverage of an SSBCI benefit only not to receive it, and Medicare-Medicaid beneficiaries in MA D-SNP plans and FFS have enrolled in a non-D-SNP MA plan based on misleading or incomplete marketing practices, losing benefits.

As researchers and policymakers recognize the multitude of factors other than health care that contribute to health, targeted non-medical services are the logical next step to improve health outcomes without raising costs. Following their inclusion in Medicare Advantage last year, Congress and HHS should work to include them in Medicare FFS.