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Challenges and Opportunities in Caring for High-Need, High-Cost Medicare Patients

As policymakers work to develop and implement program-wide health care delivery system reforms in Medicare, high-need, high-cost beneficiaries and individuals with multiple chronic conditions have been a population of particular focus. Academic and clinical research suggests that for high-need, high-cost patients particularly frail and elderly individuals with complex conditions the application of non-clinical interventions and other social supports, many of which are not covered under the traditional Medicare benefit, can improve health outcomes and reduce the need for expensive acute care services. The Centers for Medicare and Medicaid Services has also recognized the importance of many of these services and supports.

In many instances, Medicare regulations and payment approaches can serve as barriers for health plans and providers that might otherwise seek to furnish and finance health-related non-clinical supports and services for high-need, high-cost Medicare-only individuals. Over the course of 2016, the Senate Finance Committee’s Chronic Care Working Group led by Committee Chairman Orrin Hatch (R-UT), Ranking Member Ron Wyden (D-OR), Senator Johnny Isakson (R-GA), and Senator Mark Warner (D-VA) sought input from stakeholders on ways to alleviate barriers to care improvement for high-need Medicare beneficiaries with chronic conditions. Many of these barriers are addressed in this report.

In 2010, 37 percent of Medicare beneficiaries had four or more chronic conditions. These beneficiaries accounted for 90 percent of Medicare hospital readmissions in 2010.

In this report, the Bipartisan Policy Center provides a review of current regulatory, payment, and other perceived barriers for both health plans and for risk-bearing alternative payment model organizations seeking to provide health-related interventions and social supports which are not covered under the traditional Medicare Part A or Part B benefit for “Medicare-only” individuals with multiple chronic conditions and functional or cognitive impairments.

Specific care models analyzed in this report include:

  • Medicare Advantage (MA) plans
  • MA Dual-Eligible Special Needs Plans (D-SNPs)
  • Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs)
  • Next Generation (NextGen) ACOs
  • Comprehensive Primary Care Plus (CPC Plus) Model Participants
  • Programs for All-Inclusive Care for the Elderly (PACE) Organizations

BPC’s regulatory research suggests that five principal policy issues could present limitations on the ability of MA plans, ACOs, and CPC Plus participants to furnish non-Medicare-covered health-related support interventions to Medicare-only individuals: (1) uniform benefit requirements for MA plans, (2) benefit-specific restrictions on MA plans’ supplemental benefit offerings, (3) rules governing the calculation of Medical Loss Ratios (MLRs) for MA plans, (4) program integrity rules relating to beneficiary inducements and the Anti-Kickback Statute, and (5) uncertainty in the adequacy of Medicare financing.

For each of these barriers, BPC staff have suggested potential policy options, discussed in detail in the Next Steps section of this report. The appendix includes a table outlining barriers identified. BPC will issue final recommendations in April of 2017.



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