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Life Health > Health Insurance > Medicare Planning

How Medicare Advantage might change

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Some Medicare Advantage plans are starting to wade toward the long-term care (LTC) finance business.

The shift showed up earlier this month in the 2016 advance notice and 2016 draft call letter for the Medicare Advantage and Medicare Part D prescription drug programs. 

About 16 million of the United States’ 54 million Medicare enrollees are in Medicare Advantage plans, and 37 million have Medicare Part D coverage. At some big health insurers, Medicare plans are now a bigger driver of results than commercial coverage sales are. At Humana Inc. (NYSE:HUM), for example, Medicare plan sales account for 77 percent of premium revenue, according to Brian Wright, a securities analyst at Sterne Agee.

Officials at the Centers for Medicare & Medicaid Services estimated that CMS policy changes will cut Medicare Advantage revenue plans’ underlying revenue by 0.95 percent in 2016, but that an increase in patient diagnosis severity will increase revenue by 2 percent. The net effect would be an average revenue increase of 1.05 percent, officials predicted. CMS said it hopes to hold total cost increases for enrollees to less than $32 per enrollee per month.  

Aetna Inc. (NYSE:AET) predicted that, if CMS adopts the advance notice parameters as is, funding for Aetna Medicare Advantage plans will fall 1 percent in 2016.

The parameters could change. Potential bidders and other stakeholders have until March 6 to file comments. CMS expects to post the final parameters April 6 and receive insurer bids by June 1.

See also: CMS to sweeten Medicare Advantage deal and Insurers win Medicare Advantage battle

In addition to proposing plan financial parameters, CMS officials talked about proposed plan design changes.

Traditionally, Medicaid has covered nursing home care for poor people. Medicare has covered home health people and a small amount of skilled nursing home care for people over the age of 65, people with disabilities and people on kidney dialysis. Today, Medicare Advantage care coordination efforts are starting to blur the boundaries between what Medicare covers and what Medicaid covers.

For a look at provisions in the plan bidding documents that might interest both Medicare Advantage plan sellers and LTC planners, read on. 

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1. CMS is pushing to get enrollees cheaper, higher quality, easier-to-compare coverage.

Federal budget analysts have predicted that the main Medicare trust fund will go broke in the 2030s, during a decade when the youngest baby boomers will enter their 70s and the oldest will turn 90. CMS is trying to hold down spending without hurting quality by offering a little extra money to plans that earn higher ratings on the 5-star Medicare plan rating system and holding down payments to lower-rated plans.

CMS also is pushing insurers to contact the providers in their on-line provider directories at least every three months, to see if the providers are still practicing, still in the same place and still taking new patients from the plan.

CMS will be hiring a contractor to verify the accuracy of plan provider directories and developing a provider network audit program, officials said.

In 2017, CMS may require Medicare plan issuers to feed standardized provider network information into a nationwide provider database, officials said.

See also: California may add provider network checkers

Woman in an armchair

2. In-home assessments are getting more attention.

Families often try to get social workers or geriatric care case managers into older loved ones’ homes to see if those loved ones need help.

The Medicare Advantage program pays insurers more to cover higher-risk people.

CMS officials said in the advance notice that they have worried that plans would use in-home assessments mainly to increase enrollees’ risk scores and get more Medicare money, not to improve patient care. Now, officials said, they believe providers can and should use in-home assessments to plan and coordinate patient care, and to come up with ways to help people stay out of nursing homes.

CMS wants plans to develop “best practices’ standards for in-home assessments, to make sure the assessments serve as a means for providing patients with appropriate care, and not simply as a means to get patients higher risk scores, officials said.

Officials suggested, for example, that the assessments be conducted by physicians or qualified non-physician practitioners, such as advanced practice registered nurses. The providers who do the assessments should look for safety risks in enrollees’ homes, and signs that the enrollees’ homes may need adaptive equipment, officials said.

See also: When you go home for Thanksgiving

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3. Special needs plans for dual eligibles are sliding into the LTCI business. 

A special needs plan (SNP) is a Medicare Advantage plan that serves people with special needs, such as people with diabetes, or people who are living in nursing homes.

A dual eligible is a person who is eligible both for Medicaid and for Medicare. Most people getting Medicaid nursing home benefits are also eligible for Medicare. 

A D-SNP is a special needs plan that serves dual eligibles and tries to integrate Medicaid and Medicare coverage.

CMS said it wants to continue an effort started in 2012 to give D-SNPs the ability to offer supplemental benefits, such as “non-skilled in-home support services, caregiver supports, assistive devices for home safety” and other benefits. CMS said that it will require D-SNPs to tell it about supplemental benefits they want to offer earlier in the bidding process, to make sure it can let them know early enough if they can include those benefits in their benefits packages.

CMS said it also wants to get ideas about ways to encourage more D-SNPs to offer supplemental benefits that can improve enrollees’ care.

See also: Executive: Let more Medicare plans offer LTC


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