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BPC Releases New Analysis Supporting Innovative Benefits for People With Chronic Conditions in Medicare Fee-For-Service

Washington, D.C. — A new analysis released today by the Bipartisan Policy Center demonstrates that providing non-medical benefits, such as home-delivered meals tailored to a targeted group of individuals with chronic conditions in Medicare fee-for-service, could help avert hospital readmissions. It also shows a possible savings of $1.57 per patient for every dollar spent on the meals program. The analysis conducted by Ananya Health Innovation is outlined in BPC’s new report, Next Steps in Chronic Care: Expanding Innovative Medicare Benefits, which provides recommendations on ways to improve care for those with chronic conditions.

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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.

“The proposals in our report create a fiscally responsible pathway for covering non-medical benefits in Medicare fee-for-service,” said Katherine Hayes, BPC health policy director. “They would allow the Secretary of Health and Human Services to authorize coverage of these services if there is no net increase in Medicare spending.”

Today, two-thirds of people 65 and older are covered by traditional Medicare fee-for-service compared to one-third who are enrolled in Medicare Advantage (MA) plans. Under the Bipartisan Budget Act (BBA) of 2018, Congress only provided authority for MA plans to offer special supplemental benefits for the chronically ill beginning in January 2020. The benefits include medically tailored home-delivered meals, non-medical transportation, home modifications, and other benefits that have a reasonable expectation of improving or maintaining a person’s health or function. BPC’s proposals support changing federal policy to extend these benefits to the sickest Medicare beneficiaries in fee-for-service. These services are especially critical in rural areas where MA plans are limited.

“Three in four Americans over age 65 are living with multiple chronic conditions,” said Hayes. “Given the high percentage of Medicare beneficiaries with chronic conditions, Congress should extend these benefits to those in Medicare fee-for-service and put safeguards in place to ensure the services are evidence-based, targeted, and do not result in an increase in beneficiary cost-sharing, premiums, or additional costs to taxpayers.”

Hayes also stressed that only those individuals who meet the criteria and receive care through accountable care organizations, primary care models, or chronic care management services would be eligible for the program.

Ananya Health’s analysis is based on information in the 2016 Medicare Current Beneficiary Survey (MCBS) Public Use File. It identified patients in the traditional Medicare program with two or more chronic conditions and at least one functional limitation such as bathing or eating, who could be eligible for the non-medical benefit. The benefit was seven days of medically tailored home-delivered meals post hospital discharge based on evidence that these meals can reduce readmission rates for patients with 11 different chronic conditions including congestive heart failure, stroke, diabetes, emphysema, Alzheimer’s disease, osteoporosis, and others.

According to this simulation, full participation could lead to 575,408 eligible beneficiaries, with 1,012,590 eligible inpatient stays, and 9,719 fewer hospital readmissions due to the supplemental benefit. The aggregate cost for these beneficiaries would be $101,258,974 ($175.98 per person). The gross savings due to reduced readmission rates would be $158,606,687, resulting in a net savings of $57,347,713 or $1.57 per patient for every dollar spent on the meals program.

In an effort to improve care for those with chronic conditions, BPC’s report also includes recommendations that provide greater authority to the Centers for Medicare and Medicaid Services (CMS) to better integrate and align services for people eligible for both Medicare and Medicaid. Additionally, it offers proposals to improve on the provisions in the BBA by creating more transparency around who qualifies for these special supplemental benefits. It also requires MA plans to make it easier for providers to utilize the new benefits and report outcomes to CMS to help build an evidence base on the effectiveness of covered non-health services.

BPC plans to develop additional analyses on other non-health related benefits over the coming year including home modifications and non-medical transportation services.

This report is supported by The Commonwealth Fund and The SCAN Foundation.

Read the full report

Read the Associated Press story on the report