Allowing Extra Benefits Boon for Medicare Plans, Other Companies

By Mindy Yochelson

Health plans, device companies, and home health agencies would benefit from a proposal to let Medicare managed care plans offer benefits to enrollees that aren’t directly health-related.

These new benefits could include fall-prevention devices and wheelchair ramps for seniors, which the Centers for Medicare & Medicaid Services said “can enhance beneficiaries’ quality of life.”

The goal is to provide assistance for activities of daily living and support for care givers, “including respite care and care giver education,” CMS Administrator Seema Verma said in a call with reporters Feb. 1.

Good News

The additional flexibility for Medicare Advantage plans “is the best news the industry has gotten in years,” John Gorman, founder and executive chairman of Gorman Health Group in Washington, told Bloomberg Law Feb. 2. Plans would be allowed to customize supplemental benefits they offer enrollees to include a host of items and services, he said. Gorman is a Bloomberg Law advisory board member.

“The plans would be able to put new benefits and services into their bids” to serve beneficiaries and have Medicare pay for them, Gorman said.

Departure from ‘Orthodoxy’

The Medicare agency Feb. 1 in its proposed 2019 Call Letter guidance to Medicare Advantage plans is taking a drastic departure from the “orthodoxy” of only allowing benefits that are health-related, Sean Creighton, a vice president at consulting company Avalere Health, told Bloomberg Law Feb. 2.

It also would be a change in the “flow,” in that benefit expansions normally emanate from fee-for-service Medicare and then go over to the MA side, he said.

Creighton, a former CMS staffer, said if the change is made final in April, after a public comment period, it will be a boon not only to MA plans in attracting enrollees, but also a host of other providers ranging from home remodeling companies to nutritional services.

“This gives MA plans an additional set of tools” that’s lacking in fee-for-service Medicare, he said.

The American Association for Homecare supports the CMS’ intent “to expand the scope of the primarily health-related supplemental benefit standard,” Tom Ryan, president and chief executive officer, told Bloomberg Law in an email.

Fee-for-service Medicare also “should expand their embrace of this approach,” he said. The group represents home care providers and equipment manufacturers.

Trump Administration’s Approach

The proposal is “very much in line with the administration’s approach” of giving MA plans the opportunity to experiment with new ways of doing things, Creighton said.

Including personal care/nonskilled daily maintenance services in what Medicare Advantage plans can cover is a plus particularly for home health providers, Brian Tanquilut, an analyst for Jefferies Equity Research, said in an industry note.

The items and services would need to compensate for physical impairments, diminish the impact of injuries or health conditions, or reduce avoidable emergency room use.

It would open the Medicare Advantage market to “home health operators who have developed or acquired capabilities in this home health-care sub-segment,” Tanquilut said.MA plans and home health providers would be able to adjust care delivery approaches “that would result in lower cost of care per episode,” he said.

To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Kendra Casey Plank at

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