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Improving Care and Lowering Costs for Chronic Care Beneficiaries: Implementing the Bipartisan Budget Act

On February 8, 2018, President Donald Trump signed the Bipartisan Budget Act of 2018 (BBA 2018), which included important changes to the Medicare program for individuals with multiple chronic conditions. The changes were designed to improve quality of care and lower Medicare costs for patients who may also need help with day-to-day activities, such as bathing or dressing. Generally, these are adults with complex care needs. Under BBA 2018, Medicare Advantage (MA), Medicare’s managed care plans, may provide additional or supplemental services to those with complex care needs. This new flexibility for health plans has significant potential to provide access to non-medical health-related benefits, including those that have proved successful in keeping patients in their homes. Rather than a cycle of emergency department visits, hospital admissions, and discharges to home, MA plans beginning in January 2020 may target services such as minor home modifications to help accommodate walkers or wheelchairs or home-delivered meals that are lower in salt or sugar for those with diabetes or chronic heart failure. The law also included language to better align care for those who have both Medicare and Medicaid, among a number of other provisions.

Full accomplishment of the law’s goals depends on a number of factors. The law provides considerable discretion to the secretary of the U.S. Department of Health and Human Services (HHS) on how, and in some cases whether, to implement provisions of the law. Within HHS, the Centers for Medicare and Medicaid Services (CMS) will serve as the lead agency for implementation. In addition to agency decision making, the failure or success of the law will also be determined by the willingness of MA plans to try innovative approaches to care, and whether states and plans commit to the integration of Medicare and Medicaid.

This issue brief explores the key decisions CMS, health plans, and states, will make in determining how to implement the law. The Bipartisan Policy Center gathered information through a series of roundtable discussions, public events, and individual interviews with stakeholders, including current and former agency officials, congressional staff, health plan administrators, state officials, consumer advocacy organizations, and other experts.

Background: Improving Care and Lowering Cost for Adults with Complex Care Needs

Federal policymakers, in seeking solutions to address rising costs in health programs such as Medicare and Medicaid, recognize that both the number of Americans over age 65 with multiple chronic conditions and the cost of providing care is increasing. These older Americans often have difficulty performing everyday tasks, such as bathing, dressing, or safely ambulating around their homes. According to the Centers for Disease Control and Prevention, one in four Americans lives with multiple chronic conditions, and for those over age 65, that number increases to three in four. Medicare beneficiaries with four or more chronic conditions account for 90 percent of Medicare hospital readmissions and 74 percent of overall Medicare spending. With an estimated doubling of the number of older Americans by 2050, the rapid change in demographics will place significant strain on the nation’s health care system.

Medicare beneficiaries who are also eligible for Medicaid are especially vulnerable—and especially costly. “Full-benefit” Medicare-Medicaid beneficiaries, those who are eligible for all Medicaid-covered benefits, as opposed to those who receive only Medicare premium and cost-sharing assistance, have risk scores that are 50 percent higher than the average for all other Medicare beneficiaries. The average full-benefit Medicare-Medicaid enrollee has six chronic conditions, while all other Medicare beneficiaries average four chronic conditions. In 2011, just one-tenth of the full-benefit Medicare-Medicaid population accounted for 38.5 percent of total combined Medicare and Medicaid spending for that group. The high cost of care and lack of coordination has led policymakers to take steps to lower costs and improve quality of care for adults with complex care needs.

Promoting Evidence-Based Care

Successful care models that serve adults with complex care needs have certain elements in common. First, they target populations by age group with multiple chronic conditions, and by those who have a history of high cost and utilization of services. Other common care approaches of these models include interdisciplinary care teams that communicate frequently to manage patient care; chronic disease self-management, in which patients and their families play a role in care management; focusing on transitions from hospitals or post-acute care settings to homes; and seeking to better integrate care by addressing risks such as inadequate food, housing-related services, transportation, and other non-medical health-related benefits.

Despite what health care experts have learned about successful programs, evidence-based delivery models have not spread and scaled. A 2017 BPC report identified five barriers to widespread adoption, including:

  • existing uniform benefit requirements for MA plans, which require health plans to offer the same benefits to all enrollees;
  • benefit-specific restrictions on MA plans’ supplemental benefit offerings;
  • rules governing the calculation of medical loss ratios for MA plans;
  • program integrity rules relating to beneficiary inducements and the Anti-Kickback Statute; and
  • uncertainty in the adequacy of Medicare financing.

Federal law, including regulations and agency guidance, can prove to be significant barriers to transformation of care for adults with complex care needs. While HHS is testing new payment and delivery models that provide increased flexibility to providers, and the Medicare Access and CHIP Reauthorization Act of 2015 included provisions encouraging physicians to participate in value-based payment models, the majority of adults with complex care needs remain in traditional fee-for-service Medicare, which does not support these types of successful care models. Enactment of the chronic care provisions of BBA 2018 may serve to eliminate a number of these policy barriers, including the ability to target non-medical, health-related benefits to patients with chronic conditions.

Coordinating and integrating services and supports is critical to improving quality and lowering costs of care for adults with complex care needs. Medicare-Medicaid beneficiaries have a higher prevalence of most chronic conditions than those who qualify only for Medicare, yet most of these individuals do not have integrated care. Oftentimes, patients face multiple sets of benefits and rules, making it difficult to navigate their care. In some cases, a Medicare-Medicaid beneficiary will enroll in up to five different managed care plans: one for Medicare medical services, one for Medicaid medical services, one for managed long-term services and supports (LTSS), one for behavioral health services, and one for dental services. About 400,000 individuals are enrolled in more than one limited benefit plan. The potential for harm to patients, confusion, inability to access care from the correct plans or providers is significant, and America’s most vulnerable individuals deserve better.

Bipartisan Budget Act of 2018

The chronic care provisions of BBA 2018 are based on the work of the Senate Finance Committee’s bipartisan chronic care working group and on previous work by the House Ways and Means and Energy and Commerce Committees. While policymakers have accomplished the difficult work of legislative enactment, implementation of the new law will have a significant impact on its success, especially given that the HHS secretary has considerable discretion when it comes to implementing certain provisions. For example, in many cases, the new flexibility exists, yet it is contingent upon the secretary determining that certain actions are “feasible.” This issue brief discusses three key areas in which CMS will face key decisions that could impact the implementation of the chronic care provisions. In preparing this brief, BPC sought feedback from a broad range of stakeholders, including current and former agency officials, state officials, health plan administrators, health care providers, patient advocacy organizations, and other experts.

While BBA 2018 included a number of provisions related to patients with chronic conditions (outlined below), this report limits its scope to the implementation of three important areas of the new law:

The ability for MA plans to better target supplemental benefits to enrollees with multiple chronic conditions and to cover non-medical, health-related services such as transportation, meals, and minor home modifications.
New requirements to better integrate Medicare and Medicaid services for those dually eligible for both programs.
Alignment of the grievance and appeals processes for Dual Eligible Special Needs Plans (D-SNPs).

Key Chronic Care Changes

BBA 2018 incorporated chronic care provisions from both the House and Senate. Members of Congress and their staffs devoted hundreds of hours to talking with patient groups, health care providers, and other experts, including BPC, to develop health policy that would both hold down costs and help patients and their families get the care they want and need.


BBA 2018 included many provisions of the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, which previously passed the Senate with unanimous support. Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) introduced the CHRONIC Care Act of 2017, which included the work of the Senate’s chronic care working group. Hatch and Wyden formed the working group, which Sen. Johnny Isakson (R-Ga.) and Sen. Mark Warner (D-Va.) led.


The House Ways and Means Subcommittee on Health held a chronic care hearing and approved several bills in June and July 2017, and along with the House Energy and Commerce Committee worked to incorporate provisions from multiple bills into budget legislation. The House work on chronic care was based on multiple pieces of legislation, mostly introduced by members of the two committees, to extend and strengthen MA Special Needs Plans (SNPs), expand supplemental benefits for adults with chronic care needs, include telehealth services as a basic benefit for Medicare Advantage enrollees, and to extend through 2019 the Independence at Home demonstration program. On July 13, 2017, the House Ways and Means Committee approved legislation to reauthorize SNPs and to improve access for adults with complex care needs. Then-Ways and Means Health Subcommittee Chairman Patrick Tiberi (R-Ohio) and Ranking Democrat Sander Levin (D-Mich.) introduced the legislation. Much of the House committee work was rolled into BBA 2018.

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