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Medicare Advantage Draft Call Letter Modifies Rate Methodologies and Outlines New Supplemental Benefits

The Centers for Medicare and Medicaid Services (CMS) has released its 2020 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part D Payment Policies (the Advance Notice) and Draft Call Letter describing proposed changes in the MA capitation rate and risk adjustment methodologies for CY 2020. The Advance Notice and Draft Call Letter cover all MA plans, Programs of All-Inclusive Care for the Elderly (PACE), and Medicare-Medicaid plans, as well as Part D plans and employer-union plans. The Draft Call Letter also contains modifications to the MA quality rating system and information to assist plans as they prepare their bids for the new contract year.

Under the Advance Notice, CMS will be holding MA plans to small rate increases in 2020 and will be revising the risk adjustment formula. The change in the risk adjustment formula will also affect the frailty adjustment made to FIDE-SNPs. The changes in the risk model and the frailty adjustment methodology do not appear to affect PACE programs. CMS will publish the final rates and call letter by April 1st.

Of particular interest to providers of long term care services, in addition to plans, are the Call Letter’s discussion of the new Supplemental Benefits for Chronically Ill (SBCI) beneficiaries and new crossover claims procedures for dually eligible beneficiaries. SBCI are optional benefits that may be included in MA plans’ benefits packages if they bid under the benchmark rate and earn a rebate. Last year’s call letter authorized an expansion of MA supplemental benefits by broadening the types of services that would qualify as “primarily health related.” SBCI, by contrast, need not be “primarily health related” and may be offered to chronically ill beneficiaries on a non-uniform, individually authorized basis. An SBCI need not be primarily health related if it “has a reasonable expectation of improving or maintaining the health or overall function of the enrollee as it relates to the chronic disease.”

Plans have broad discretion in defining SBCIs that meet this criterion. SBCIs identified in the Call Letter include non-medical transportation, home-delivered meals (beyond the current limits), food, and produce. SBCIs may not include capital improvements to a home that could increase its property value (e.g., permanent ramps) or items or services covered by original Medicare. Plans must incur a “non-zero” direct medical cost for SBCIs and other supplemental benefits.

To qualify for SBCI, a beneficiary must:

  • Have one or more comorbid and medically complex chronic conditions that are life-threatening or significantly limit his/her overall health or function;
  • Have a high risk of hospitalization or other adverse health outcomes; and
  • Require intensive care coordination.

CMS is seeking comments on whether plans should have flexibility to determine the chronic conditions that meet the statutory standard.

MA plans may contract with community-based organizations to provide the new supplemental benefits and to assess residents for purposes of determining whether they meet the eligibility requirements. CMS is seeking comments on whether additional factors such as financial need should be considered in determining permissible SBCIs.

In addition, CMS is seeking comments on MA plans that serve a high proportion of dual eligible beneficiaries but are not operating as D-SNPs. Unlike D-SNPs, these “look-alike” plans are not required to provide periodic risk assessments, develop individualized care plans, or contract with states to coordinate or cover Medicaid benefits. CMS is interested in learning how these look-alike plans serve the dual eligibles enrolled in them, as well as providers.

CMS is also seeking comments on how to extend its automated crossover claims process to all dual eligibles enrolled in MA plans to relieve the administrative burden on providers that must bill both a MA plan and Medicaid.

More detail on the Advance Notice and Call Letter are available from the national LeadingAge association here. LeadingAge will be formulating comments and encourages members to submit comments as well. LeadingAge is interested in hearing from members what additional services chronically ill individuals should have access to under the new SBCI option and any other concerns or questions members have about the Advance Notice and Call Letter.

Comments on the Advance Notice and Call Letter are due by 6 p.m. on March 1, 2019. To submit comments or questions electronically, go to https://www.regulations.gov, enter the docket number “CMS-2018-0154” in the “Search” field, and follow the instructions for “submitting a comment.”

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124