What’s on the Horizon for Managed Care in 2019?

Center for Managed Care | January 09, 2019 | by Nicole Fallon

Actions in 2018 – new leadership at the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Innovation(CMMI), new laws and regulations -- will usher in new opportunities and potential risks in the form of new rules, new models and new benefit offerings in 2019 and beyond for those providing housing and other services to older adults. 

New Rules:  The passage of legislation in 2018, such as the Bipartisan Budget Act of 2018 which contained provisions of the CHRONIC Care Act, will lead to changes in the types of benefits Medicare Advantage (MA) plans may offer in 2020 and beyond and what is expected of both MA and Special Needs Plans (SNPs).  CMS closed 2018 with the publication of a series of proposed and final rules that will govern MA, SNPs, and Medicaid managed care plans for 2020 and beyond. 

  • Expanded Telehealth benefits in MA and Improved Integration in SNPs: LeadingAge commented in December 2018 on proposed rules to implement new additional telehealth benefits for MA plans, establish new requirements for Dual Eligible Special Needs Plans (DSNPs) to deliver integration by arranging for benefits and provide unified appeals & grievance processes for individuals enrolled in D-SNPs where the beneficiaries are enrolled in a DSNP and Medicaid managed care plan controlled or owned by the same parent organization, also known as “exclusively aligned enrollment”.
  • Greater State Flexibility in Medicaid Managed Care: CMS also issued proposed rules amending Medicaid managed care rules put in place in 2016.  These rules make changes to how states determine provider network adequacy, gives states more flexibility to make pass-through payments as they expand their managed care programs and to test value-based payment reform.  Comments are due January 14, 2019 at 5p ET.
  • Dual Eligibles and Managed Care: CMS issued a letter to State Medicaid Directors “ Ten Opportunities to better Serve Individuals Dually Eligible for Medicaid and Medicare” for more information see the December LeadingAge article by Brendan Flinn.
  • New ACO Rules Place More Financial Risk on Providers Faster: In late 2018, CMS published final rules making changes to the Medicare Shared Savings Program Accountable Care Organization that outline a path to move these ACOs to take on more upside and downside financial risk faster, which could, in turn, could result in more pressure on aging service providers to reduce costs and rehospitalizations.  For further details, see the CMS Summary and LeadingAge article "Final 'Pathways to Success' ACO Rules Speed Up Pace of Provider Risk".

New Models:  While 2018 proved disappointing to many post-acute care providers who saw CMMI end their ability to lead a bundled payment under the Bundled Payment for Care Improvement (BPCI) initiative, we believe 2019 will bring new opportunities. At a fall AHIP Conference, Center for Medicare and Medicaid Innovation (CMMI) Director, Adam Boehler, made it clear that he is very serious about continuing the shift to value-based care models that ensure both outcomes and accountability, stating that he believes, “risk is best held at the local level” and sees CMMI’s role as “setting the table” by providing the right incentive structure to drive value-based care. Therefore, we fully expect CMMI to continue to expand its testing of models that place more risk on providers. In addition, some members -- both individually and collectively -- have expressed interest in taking on a new role by becoming not only the service provider but also the payer as an SNP, allowing them to capitalize on the care and service delivery changes they are making that are generating savings.

  • Provider-Led ISNPs:  As Anne Tumlinson notes in a recent Skilled Nursing News article, “The number of provider-sponsored I-SNPs doubled from 2016 to 2018, and enrollment has more than doubled. Long-term care providers now lead 21 of the 24 provider-led I-SNPs.” This has been a hot topic for several LeadingAge members in the past year asking the question of whether they want to pursue becoming an institutional or other types of SNPs. Anne and her colleague, Mary Coppage, will share their experience in helping a number of organizations through the process of evaluating and implementing an SNP in the LeadingAge webinar “Becoming a Provider-Led ISNP” on January 16, 2p ET.  Click here to learn more about this webinar and register. 
  • PAC Alternative Payment Model Project with other post-acute care organizations: LeadingAge is participating in a multi-association effort to design an alternative payment model for post-acute care providers that will be pitched to CMMI in 2019 for consideration for model testing.
  • As noted above, CMS continues to revise the Medicare Shared Savings Program Accountable Care Organizations rules to require ACO providers to take on more financial risk faster.
  • Bundled Payment Success Likely to Drive More Bundled Payment Models: CMMI released the results from the first year of the Comprehensive Care for Joint Replacement (CJR) program and it showed that costs were reduced for these episodes by between 2.3% - 3.9%. SNF and Inpatient Rehabilitation Facility payment reductions accounted for roughly 88% of the achieved “cost savings” under CJR.  Several LeadingAge members’ experience in the BPCI initiative demonstrated similar results showing that episodic costs can be reduced under this payment model. Given the results to date, we would expect CMMI to continue utilizing this payment methodology to shift away from traditional fee-for-service toward value-based payment.  

Potential New Benefits:  Medicare and Medicaid beneficiaries may see new benefits available to them and covered through non-traditional sources in 2019 and beyond. 

  • MA plan supplemental benefits definition to expand further to include more HCBS services in 2020: Medicare Advantage (MA) plans are busily working on crafting their benefits for the 2020 plan year. The Bipartisan Budget Act of 2018 included language explicitly expanding a key definition to permit supplemental benefits to include benefits that “have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee” and eliminates the limit that supplemental benefits to those that are “primarily health-related”. The BBA provisions also permits MA plans to target some of its supplemental benefits to specific chronically ill populations. Additional details were discussed in a May 2018 article. Ultimately, CMS, via its annual MA Call Letter, provides plans with additional guidance about how it will interpret or put into practice the new provisions. Questions remain about the adoption of these new benefits, such as: Will CMS issue Part II of its 2020 MA Call Letter early enough in 2019 to allow plans to build the new supplemental benefits into their plan offerings for 2020? How many plans will offer the new supplemental benefits in 2020? And will the benefit offerings create an opportunity for home and community-based service providers to develop a new payment source for services they are already providing? Two reports published at the end of 2018 highlight the challenges MA plans face in offering these benefits. LeadingAge will be tracking and summarizing these developments as they occur.
  • CMS May Allow Hospitals to Pay for Housing Through Medicaid (Modern Healthcare):   HHS Secretary Alex Azar is on the record indicating that CMMI may soon allow hospitals and health systems to directly pay for housing, healthy food or other solutions for the "whole person" under Medicaid. While no further details have been offered, this may create new potential revenue sources for housing providers but also require housing and HCBS providers to ensure they have the necessary contract negotiation skills that may be required through these new payer arrangements.

Given these new rules, models, and benefits, we expect 2019 to bring more opportunities, and continued change to how older adults receive services as well as expectations about how providers deliver services and are paid. LeadingAge’s Center for Managed Care Solutions & Innovations will focus its work in 2019 in three key areas to reflect the trends we are seeing on the horizon: 1) Continuing our core work to educate and support members through tools, resources, advocacy, and education on managed care and alternative payment models; 2) Developing and supporting new delivery and payment models that allow aging services providers to lead;  and 3) Creating connections and tools for HCBS providers to capitalize on new opportunities presented by MA plans ability to offer HCBS supplemental benefits.