What are supplemental benefits in Medicare Advantage?
Medicare Advantage plans cover all hospital and medical services provided under original Medicare. Outside of Medicare-covered services, MA plans provide additional coverage with supplemental benefits for their enrollees’ health and social needs. These benefits include vision, dental, transportation, access to meals, hearing aids, gym memberships, and more.
Who offers supplemental benefits?
The supplemental benefits are offered by Medicare Advantage (MA) plans. At this time, almost all Medicare Advantage plans are offering some type of supplemental benefit, however, the number and types of supplemental benefits vary from one plan to another, based on how they perceive the competition in their markets, and the amount of capital available to fund these benefits.
Health plans that offer supplemental benefits are looking at two key metrics when they offer supplemental benefits – a) get more members and b) improve outcomes. In addition, they also look at the upfront cost of delivering benefits – some benefits are more expensive than others due to the nature of the benefit or expected utilization given that plans have a limited budget to offer these benefits. The other factor that influences their decision to offer a specific benefit is the availability of quality service providers in the area that they want to target.
How are the supplemental benefits funded?
Short answer, the CMS. The Medicare Advantage plans are directly reimbursed by CMS for offering these benefits. The cost of these benefits is covered using rebate dollars (which may include bonus payments) paid by CMS to private MA plans. CMS provides a set amount, which MA plans can use to provide whichever supplemental benefits they choose. Any increased costs are borne by the plans and their enrollees, not the federal budget. While plans can charge additional premiums for such benefits, most are not doing this. The rebate amount is determined based on the difference between the bid submitted by MA plans and the regional benchmark rate. The percentage of the rebate that is kept by the MA plan is based on the star ratings among other factors. In recent years, the rebate portion of federal payments to Medicare Advantage plans has risen rapidly, totaling $432 per enrollee annually for supplemental benefits, a 24% increase over 2021.
Why are these benefits good for both MA plans and enrollees?
Older adults and persons living with disabilities make up the largest Medicare beneficiary population and are among the nation’s most vulnerable and costly populations affected by chronic disease. Medicare Advantage (MA) plans are seeing a growing number of enrollees who have social risk factors and complex medical needs. There is a lot of research that shows that combining medical care with non-medical services produces overall better outcomes for patients, providers, and health plans.
Solving problems upstream makes sense. For example, if a member with asthma has regular exacerbations for which they are seeing medical and hospital care, it makes more sense for the health plan to cover the cost of carpet cleaning or air purifier which may help is reducing the number of such episodes in the first place.
In addition to improving outcomes, these benefits also promote health equity and member satisfaction.
Who is eligible for MA supplemental benefits
Members who have enrolled in Medicare Advantage plans and meet certain requirements are eligible for these supplemental benefits. However, most of these supplemental benefits are only available to people who are chronically ill. CMS has relaxed the requirement that Advantage plans must provide the same services for all enrollees. Now, they can furnish benefits to those with certain health conditions, not to everyone. This flexibility is allowed not just for conditions, but also for health status, which includes social determinants of health such as members needing assistance with personal care, living alone, or needing transportation. Currently, most benefits are provided to members with at least one medically complex condition that is life-threatening (diabetes, CHF, COPD, etc) or significantly limits their health or function (for example fibromyalgia, ME/CFS). They are also typically at a high risk of ER or hospitalization and require intensive care coordination.
The number and types of supplemental benefits that a member has access to will depend upon their plan. There’s no one-size-fits-all package. For example, some plans may cover meal delivery and nutrition support for people with diabetes, CHF, and COPD and others may provide the member a meal allowance. Furthermore, different chronic conditions may result in different benefit eligibility; much is left to the plan’s discretion. For example, a plan might cover services like home air cleaning and carpet shampooing for members with severe asthma. A member of that plan who has severe asthma will be able to get those services covered, while a member who does not have asthma, or whose asthma is mild, will not. Advantage plans could provide certain benefits one year, then withdraw them the next.
A bit of history
The recent history of supplemental benefits can be traced back to 2019 when Medicare Advantage (MA) plans were allowed to offer some supplemental benefits to members who have chronic conditions. Since then, the number of services that can be covered by MA plans has been significantly expanded to address social and environmental factors of health, from vision and dental to transportation, pest control, nutrition support, adult day care, etc.
One more change was made which makes it super interesting. Instead of offering all supplemental benefits to all beneficiaries, MA plans now can offer specific benefits to targeted populations with chronic conditions and social needs. This updated and relaxed definition of uniformity means that instead of offering identical benefits to all members, health plans can now offer targeted benefits as long as similarly situated members are treated uniformly. This is to ensure that members with the same conditions have the same access to the targeted benefits. For example, offering transportation to PCPs and pharmacies to all members with CHF.
Another innovation is Value-based Insurance Design (VBID) which makes it possible for health plans to reduce barriers to ‘high-value’ care (reduced cost sharing and deductibles for certain specialist visits or prescription drugs) for people with conditions like diabetes, COPD, CHF, and others. High-value services and providers may be defined by the plan, according to their own criteria. Plans need to apply and get approval for offering VBID benefits.
All of this means that Medicare Advantage (MA) plans now have unprecedented flexibility to design and implement benefits for high-cost, high-need members that can not only provide them a competitive advantage but also enable them to reduce costs and improve health outcomes.
What type of supplemental benefits are available
Most members in MA plans have access to vision, hearing, fitness, Telehealth, and dental care. However, the scope of services and the cost-sharing in each benefit varies by plan. Some plans may impose an annual cap on services and also set limits on the number of services in each benefit category. In some cases, the members may need a referral from their doctor to use the supplemental benefits, and they may need to use certain providers approved by their MA plan. In addition, these benefits are typically not unlimited. Plans may set a monthly or yearly limit on the amount they will pay in the different benefit categories.
Here is a list of some of the benefits –
For members with food insecurity and limited access to healthy food, meal benefits can be very useful. At this time, the duration is limited for most meal-related benefits. These are typically offered on a health event (for example post hospitalization), limited to 30 days or fewer. Some plans are offering nutrition support as well by connecting members to dietitians, who can assist them in making healthier choices.
Transportation is another commonly offered supplemental benefit in MA. Limited access to transportation can inhibit individuals from making necessary trips to the grocery store, pharmacy, and physician. However, the generosity of the benefit varies, with some plans requiring that all trips must be medically related, and others limiting the use of public transportation, vans, and ride-sharing.
Over-the-counter (OTC) benefit
Over-the-counter (OTC) drugs are nonprescription medications; in other words, you don’t need a doctor’s prescription to purchase them. OTC benefits help members avoid the wait for prescriptions and get medications for common ailments (such as a cold or headache) at a reduced cost. Some plans are providing this benefit as an allowance and include other products such as vitamins, incontinence products, safety grab bars, and first-aid supplies in the allowable category for this benefit as well.
Access to telehealth allows members to get virtual access to primary care, urgent care, and behavioral health services for free. In addition to virtual consultation, members can get prescribed medications ordered directly by telehealth providers. These virtual visits can be very useful for non-emergency conditions since they are often available at late hours and during weekends as well.
Adult daycare services
Many members do not necessarily need the constant care of a nursing home but could benefit from participating in an adult daycare program one or more days per week. Adult daycare centers usually offer a variety of services, such as counseling, exercise, assistance with medication, social activities, physical therapy, and educational programs. Social activities can include crafts, games, gardening, book clubs, field trips, music, pets, and parties. This benefit can help members to safely remain in their own homes, avoid social isolation, and lead longer, healthier lives. Transportation to and from the adult daycare facility may also be covered in some plans. In 2023, 41 plans in five states will offer adult day health services to MA members.
Medically approved non-opioid pain management
Common conditions that can benefit from pain management include arthritis, cancer, fibromyalgia, and ME/CFS. Non-opioid pain management benefit includes coverage for services and medications that are non-addictive alternatives to managing chronic pain such as acupuncture, chiropractic care, occupational therapy, physical therapy, therapeutic massages, etc. These services must be recommended by a doctor to help with pain and not used for relaxation. Therapeutic massage will be offered in 188 MA plans in 22 plans and Puerto Rico in 2023.
Home safety devices and modifications
Home safety devices and modifications can prevent injuries in the home and/or bathroom for members with fall risk. Examples of safety devices and modifications include shower stools, hand-held showers, bathroom and stair rails, bathroom handrails, raised toilet seats, temporary/portable mobility ramps, night lights, and stair treads. This benefit may include a home and/or bathroom safety inspection and installation. This benefit can help in preventing unnecessary falls and trips to the emergency room.
In-Home support services
A few Medicare Advantage plans are covering housekeeping services, meal delivery, and even aides to help with activities of daily living such as bathing, dressing, and eating. The benefit is generally limited to a certain number of hours of care each year. This benefit is specifically designed to help chronically ill beneficiaries remain living independently in their own homes for as long as possible. There are 1,091 MA plans in 43 states, the District of Columbia, and Puerto Rico, that will offer in-home support services in 2023.
Home-based palliative care
Palliative care includes services provided to members with serious illnesses to relieve their symptoms, improve their comfort and quality of life, and ensure that their goals of care and care preferences are met. These services are typically delivered by a dedicated care team, including healthcare providers and social workers. Unlike hospice care, palliative care does not require a terminal diagnosis and can start at the initial diagnosis of a serious illness. Home-based palliative care is a great benefit for members with serious illnesses whose disease has affected daily living and put them at risk for emergency room visits and hospitalization. Home-based palliative care services are available to MA members in 157 plans in 17 states this year.
Respite support for caregivers of members
Respite care is provided through a personal care attendant or the provision of short-term institutional-based care, as appropriate, to ameliorate the members’ injuries or health conditions, or reduce the members’ avoidable emergency and health care utilization. Respite care is typically offered for short periods of time (e.g., a few hours each week, a two-week period, or a four-week period) and may include services such as counseling and training courses for caregivers of members.
Stand-alone memory fitness benefit
There is also a stand-alone memory fitness benefit, designed primarily to prevent, treat and reduce the functional and psychological impacts of memory loss due to injuries or health conditions.
Supplemental dental benefits offered by MA plans can be offered by default (beneficiary automatically receives embedded within his or her plan) or optional (benefit must be elected and purchased by a beneficiary during the enrollment process) for an additional fee. The dental benefits can be further categorized as preventive or comprehensive. Preventive services include oral exams, cleanings, x-rays, and fluoride treatments typically performed regularly as proactive health measures. Comprehensive services include restorative services (fillings), endodontics (root canals), periodontal treatments, extractions, and prosthetics, among other services.
How widespread are MA supplemental benefits
Since the supplemental benefits are offered mainly by Medicare Advantage (MA) plans, the access and adoption of these benefits are directly related to members enrolled in MA plans. About 32 million people are expected to be enrolled in MA plans by 2023. This means that about 1 in 10 Americans will have access to one or more of these benefits.
Every year, Medicare Advantage plans are steadily increasing the number of supplemental benefits offered across all categories. More than 90% of Advantage plans offer dental, hearing, vision, fitness, and telehealth benefits. The growth in other supplemental benefits offerings—including those meeting social needs such as meals, nutrition, transportation, and in-home support services—demonstrate Medicare Advantage plans’ interest in addressing social determinants of health and improving the whole-person health of their beneficiaries.
Value-Based Insurance Design (VBID) plans are also growing. More than 1,200 Medicare Advantage plans are expected to offer VBID-based benefits (lower cost for high-value care) to over 6 million people in 2023.
From a condition perspective, many health plans now have either reduced cost-sharing for high-value care or added additional coverage for common chronic conditions such as diabetes, CHF, COPD, anxiety, depression, etc.
What are the challenges in designing and adopting MA supplemental benefits?
There are studies that show that health plans that provide special services and benefits to seriously ill members improve satisfaction and also reduce avoidable spending—by as much as $12,000 savings per participating member. However, there is limited evidence at this point for the health plans to evaluate whether a specific supplemental benefit can help them reduce costs or improve outcomes for a wider subpopulation. This requires comprehensive data gathering on benefit utilization including encounter-level data from service providers, which most plans do not currently have.
Lack of targeting
Another issue is member targeting and identifying what benefit will work for what subpopulation. Health plans must decide the best way to allocate resources among different types of services, some of which may require significant investment and infrastructure. At this time, the supplemental benefits are not always targeting the right subpopulations that can benefit from it.
Lack of community involvement
Many supplemental benefits are created in isolation without the involvement of the beneficiary community or feedback from provider partners, particularly the benefits that are targeted at high-need populations. This makes the benefits less effective. For example, for a person with transportation issues, just providing 4 rides a quarter may not be enough.
Even when the benefits are available, most members are not able to take full advantage of their benefits. Communicating benefits to the members is a big challenge for MA plans. Eligibility criteria vary based on the type of benefit. The varying scope of the benefits makes it harder as well. This is resulting in a general lack of awareness (people don’t know about them, they don’t know if they qualify and they don’t know how best to use them) and a disjointed experience (the supplemental benefits are not coordinated well with medical benefits).
Contracting and working with Community-Based Organizations (CBOs)
Local community-based organizations (CBOs) are best suited to deliver non-medical supplemental benefits such as meal delivery, transportation, and respite care. These supplemental benefits are new to many MA plans and CBOs. Most CBOs have limited experience and capacity to contract with health insurance plans. Quite often these organizations may not meet the liability insurance requirements to contract with plans or may not have the technical capacity to receive referrals, submit claims, store, and share any health-related information on beneficiaries in a manner required by Health Insurance Portability and Accountability Act (HIPAA) regulations.
Aligning benefits across lines of business
A lesson from the COVID-19 pandemic is that health disparities exist across the board and are not just limited to Medicare populations. Many MA plans are trying to coordinate these non-medical benefits and providers with other lines of business such as Medicaid managed care, which is causing some delays in implementing a holistic strategy.
Access issues in rural areas
Many health plans are facing difficulty in finding quality clinicians and CBOs in rural areas, who can deliver care covered by supplemental benefits. Even when services may be available, there is a lack of coordination and long travel times to deliver them, especially for services delivered in the home.
Strategies for promoting greater adoption of supplemental benefits
There is no denying that if applied well, these supplemental benefit offerings have the potential to improve the quality of care and outcomes for vulnerable and at-risk beneficiaries. A move to more broadly support the health and well-being of an aging population marks an important turning point in the American healthcare system. Promoting greater adoption of supplemental benefits will require more experimentation, there are some strategies that can be adopted by the health plans to create the right foundation and building blocks for sustainable advantage.
Building internal support for the new benefits
It is important that the health plans have the right stakeholders involved in the design and implementation of these supplemental benefits with full support from the leadership team. Having an internal champion who understands the value of supporting social care can go a long way. Bringing data and research to the conversation can help them address the roadblocks.
Test and learn
Health plans can update their intake processes to include SDoH screenings performed by the front-line staff. Predictive analytics can be a useful tool for identifying unmet needs at the subpopulation level. Starting small and continuous learning is a very effective strategy. For example, MA plans can start their offerings in SNP plans (if offered) that are targeted to a group of high-need members. If these benefits are successful in a limited and controlled setting, these can be expanded to broader subpopulations.
Designing the right benefits
Benefits can be costly to provide to all members. A true understanding of members’ needs is important.
Knowing the purpose of the benefit is the most important thing a health plan can do when designing a strategy, benefit limits, and a communication plan for supplemental benefits. For example, instead of starting the design by limits (10 visits per year), starting by goal (for example free rides for doctor visits) will get you the right answer (12 back-and-forth rides per year). Another most commonly used feature to manage costs of providing supplemental benefits is the maximum plan benefit coverage amount – the maximum dollar amount a MA health plan will pay towards the cost of care (included in the benefit) within a defined period.
If not targeted well, these supplemental benefits will quickly lose value and not bring the promised results. Finding the right subpopulations that can benefit from these supplemental benefits is critical. Also, since the cost of the benefits varies significantly, targeting costly benefits to the highest-need members is important.
Make sure members know what their benefits are
Often supplemental benefits are incorporated into a plan design and then buried in the back of the plan’s handbook for members. This requires a lot of effort by the members (read that handbook, ask about their health plan) which is not productive. To make sure the right member uses the right benefit to achieve the right health outcome, the health plans should proactively engage their at-risk members.
In addition, health plans can simplify the eligibility criteria. While there are many statutory and regulatory guidelines to meet, health plans do have a lot of flexibility in defining eligibility criteria for most supplemental benefits. This will go a long way in simplifying member communication and benefits adoption.
Involving the care team
Proactively engaging at-risk members is difficult. How do you know who’s at risk? How do you know each member’s comprehensive care plan? Health plans can leverage existing touch points such as their care teams to identify and engage members. Care teams should find ways to access multiple services (medical and non-medical) to drive appropriate member and provider behavior while lowering administrative burden.
Integrating and empowering providers
There are a lot of supplemental benefits and not all providers are aligned with your goals. MA health plans should find and collaborate with the best-of-breed providers who share their vision.
More than focusing on the size of the providers (since many of the service providers are small and can’t address the full-service area), integrating services from multiple providers around the member’s needs will go a long way. Providers who lack technology tools can be supported by the plan for taking new referrals, coordination, fulfillment, and submitting claims or invoices. This effort will help them in sharing results and data with the medical provider community and will make the overall member experience better.
Establish clear ROI Metrics
Understandably, health plans are eager to know the impact of supplemental benefits on the members’ well-being and prevent unnecessary hospitalizations and emergency department visits. However, recognizing that it will take time for certain types of non-medical providers to develop core data reporting capabilities needed for encountering, health plans can start with member surveys at the point of fulfillment to gauge the impact of these benefits on immediate well-being and satisfaction.
Technology platform to manage and administer supplemental benefits
At the core, supplemental benefits are personalized benefits. The legacy technology infrastructure used by health plans was not designed to offer tailored personalized benefits. Health plans need a strong technology foundation to design personalized benefits that improve the quality of life, functional independence, and experience of care for members, and substantially reduce avoidable spending. The platform can help health plans with the technical support they need to address the issues discussed above, such as:
Data and analytics platform to understand the needs of member subpopulations
Health plans need strong data and analytics capabilities to understand the needs of their member subpopulations. Getting a complete picture of each member is the first step. It is no secret that health and social data is spread out in multiple IT systems. Often this data is duplicated, with gaps and errors. The health data platform can integrate claims, and clinical and social data from disparate sources, and normalize it to create a single source of truth for each member. This unified longitudinal record of each member when run through predictive analytics helps the health plans build highly targeted member segments with actionable, AI-powered insights into member needs.
The best part of having a health data platform is that the health plan can share the member’s unified profile with other systems (such as care management) that might need it. That’s one of the ways a managed care organization is able to create personalized campaigns. Using Sprite Health’s dynamic benefits solution, they are able to do the following tasks:
- Identify resolution: Unify member claims, EHRs, and social data into a single member view.
- Persona building: Synthesize data into member segments including which members have a specific conditions and transportation needs.
- Activation: Orchestrate personalized real-time outbound messaging to each member segment highlighting the key features of the transportation benefit.
Customizable benefit designer tools to design the right supplemental benefits
Designing personalized supplemental benefits is hard. Health plans have to juggle multiple options across different benefits due to limited funding, evidence, and utilization data. This requires flexibility in designing benefits to experiment and learn.
Sprite Health’s dynamic benefits solution helps the MA plans easily design personalized benefits with a flexible architecture. The product leads can customize the benefit by cost-sharing by specific services, limits, choice of providers as well as max benefit amounts. They can offer an allowance to members with the freedom to choose any retailer or set it up in a way that requires restricted access.
Helping members understand, navigate and utilize their supplemental benefits
Healthcare navigation plays a crucial role in helping people get the right support, at the right time, across an extensive set of complex health needs. Successful healthcare navigation works to alleviate members’ physical, geographical, and emotional struggles and adequately address their financial needs.
Sprite’s Health navigation solution provides health plans the tools to meet members where they are while empowering them with information and guidance that will impact their health and wellness. Whether they need to understand how their supplemental benefits work, review their claims, manage their spending, find a provider, or submit a claim – the health navigation solution brings everything together into one connected experience.
Whole-person digital care management that integrates supplemental benefits with medical care
Disjointed care can result in increased costs and a frustrating member experience. Most supplemental benefits are not currently integrated with medical care. Care managers often don’t know what benefits are available to what members and are not able to incorporate the resources for social needs in their care plans. Also, many members who need one supplemental benefit need other services. For example, expectant mothers need consistent appointments, transportation to these appointments, and nutrition geared toward mothers and babies. Calling, and coordinating different services from different dashboards, and phone lines are causing a lot of administrative workload for the care coordination teams.
Sprite Health’s digital care management solution provides a single resource to care teams to proactively identify and manage the whole picture for any one individual. It links care teams with medical services, behavioral health, community resources, transportation services, social and home settings, and cultural and religious centers. This way care teams can anticipate, care for, and stay with the member throughout their journey to better health.
Sprite Health’s dynamic benefits solution provides the technology infrastructure that MA health plans need for successfully implementing supplemental benefits. The platform provides predictive analytics to better understand the specific needs of subpopulations, a design tool to create flexible benefits that their members will appreciate, an outreach campaign, and an enrollment tool to target the member populations with campaign strategies using each member’s preferred channel and creating a seamless enrollment experience. In addition, the dynamic benefits solution helps them find the right providers for each benefit and empowers these provider partners with data, insights, and technology tools to help them deliver better care to all members. The integrated reporting and live dashboards bring all the pieces together—claims, utilization, benefits operations, program engagement, and member touch points to help health plans better spend their time thinking through the insights and next steps, instead of piecing together information.
If you’re a Medicare Advantage member and believe you qualify for supplemental benefits, you can use the plan finder to search for a health insurance plan that offers the benefits that are right for you. If you are a payer, connect with us to learn how we can help you streamline your supplemental benefits offerings.