A Primer on Managed Care: Multiple Chronic Conditions

‘Major MCOs are also taking a closer look at the PACE model.’ are authorized to serve designated geographic areas, and as the number of older adults grows in communities across the country, they are well-positioned to expand to serve more of this population, in part through contractual partner- ships with larger MA plans and other MCOs and healthcare organizations. In 2018, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act ushered in a new era in LTSS for the Medicare program. CHRONIC was incorporated into the Balanced Budget Act of 2018 (BBA) and signed into law on February 9, with MA plans that could provide cost-effective, high-quality coordinated care for complex patients, including supplemental and support- ive services. Both PACE and AAA providers

2018. Also in 2018, the Centers for Medicare & Medicaid Services (CMS) amended long-stand- ing policy on supplemental benefits to enable MA plans to have greater flexibility in providing optional services that are clearly LTSS-focused (see sidebar, below). MA plans now have an opportunity to con- sider how to improve the quality and efficiency of care for their most complex enrollees by offer- ing targeted, cost-effective supplemental LTSS. Major MCOs also are taking a closer look at the PACEmodel. PACE organizations are char- tered to serve certain geographic areas, and they build PACE centers in the communities in which they are anchored. A core asset of the PACE inter- disciplinary team is its ability to monitor and rapidly adapt services to changing needs of par- ticipants, who are mostly frail and disabled older adults. As a subset of Medicare beneficiaries be­ come frail, these attributes may prove attractive toMA plans that will increasingly have members needing ongoing medical management and LTSS.

The Changing Policy on LTSS Supplemental Benefits On April 27, 2018, CMS issued a groundbreaking memo addressed to MA plans and Section 1876 cost plans. Titled “Reinterpretation of ‘Primarily Health Related’ for Supplemental Benefits,” the memo states, “Organiza- tions may decide to offer some items and services that may be appropriate for enrollees who have been diag- nosed with needing assistance with Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL)” (CMS, 2018a). Subject to approval by CMS, for the first time, MA plans may offer supplemental benefits that include adult daycare services, home-based palliative care, in-home support services, limited support for enrollees’ care- givers, medically approved non-opioid pain management, stand-alone memory fitness education, home and bathroom safety devices and modifications, and transportation to obtain “non-emergent” covered items and services and over-the-counter medications. The agency’s “Call Letter” for calendar year 2019 announced that MA plans would have additional flex- ibility in the bidding process with regard to the scope of “healthcare benefits” that are offered as supplemental benefits (CMS, 2018b). The letter explained, “Under our new interpretation, in order for a service or item to be ‘primarily health related’ under our three-part test for supplemental health care benefits, it must diagnose, pre- vent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psy- chological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization.” CMS noted, “This will allow MA plans more flexibility in designing and offering supplemental benefits that can enhance beneficiaries’ quality of life and improve health outcomes.” In 2020, the Balanced Budget Act (BBA) statutory language allows supplemental benefits to be offered to enrollees with chronic conditions as long as they can demonstrate a “reasonable expectation of improving or maintaining . . . health or overall function” (BBA, 2018).

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