Tag Archives: long-term services and supports

Expanded definition of primarily health-related benefits alters the Medicare Advantage marketplace

In April 2018, the Centers for Medicare and Medicaid Services (CMS) published a revised definition of “primarily health related” (PHR) benefits as applicable to Medicare Advantage (MA) organizations. CMS expanded the definition of a primarily health-related service starting in calendar year (CY) 2019 as one that is “… used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization.” These services are often used by individuals with chronic conditions in need of long-term services and support (LTSS). Many of these services are the same ones that private long-term care (LTC) insurance covers and reimburses.

CMS’s April 27, 2018, guidance letter presented nine possible supplemental benefits that could be offered starting in CY 2019 under the expanded “primarily health-related” definition. Many plans are offering some of these supplemental benefits in 2019. Six of the nine supplemental benefits mentioned in the memorandum are:

1. Adult day care services
2. Home-based palliative care
3. In-home support services
4. Support for caregivers
5. Medically approved non-opioid pain management
6. Standalone memory fitness

In addition to CMS’s list of nine potential new benefits under the revised PHR definition, there are additional “other supplemental benefits” for 2019 that appear to qualify under the expanded PHR definition:

1. Activity tracker/fitness tracker
2. Alzheimer/dementia bracelet: Wandering support service
3. Backup support for medical equipment
4. Housekeeping
5. Non-skilled home health
6. Personal care/personal care services/personal home care
7. Restorative care benefit
8. Social worker line
9. Therapeutic massage
10. Vial of Life program

In this article, Milliman’s Pedro Alcocer, Robert Eaton, and Pamela Laboy address in more depth how the MA marketplace responded in 2019 to CMS’s expanded definition of primarily health-related benefits, including which supplemental benefits plans are offering and where these benefits are offered.

A comparison of nursing home usage in states with and without Medicaid Managed LTSS

As states consider implementing managed long-term services and supports (MLTSS) programs and as managed care organizations consider participating in them, it is important to understand what level of savings from managed care may be achievable. This paper by Milliman’s Nick JohnsonAndrew Keeley, and Ali Khan examines Minimum Data Set frequency reports and U.S. Census Bureau American Community Survey population data to compare nursing home usage in states with MLTSS to states without MLTSS.

Development and implementation of functional-based risk adjustment for Medicaid Managed Long Term Services and Supports

As the number of Medicaid Managed Long Term Services and Supports (MLTSS) programs increases, significant momentum is also building around the development of tools to adjust managed care organization (MCO) payments using the functional, medical, and behavioral needs of their members. These tools match payment to risk and align MCO and MLTSS program incentives more effectively. While the planning, development, and implementation needs of a functional-based risk adjustment (FBRA) mechanism are significant, the improvements realized in MLTSS programs are worth the effort.

Milliman actuary Michael Cook provides perspective in his article “Functional-based risk adjustment for Medicaid Managed Long Term Services and Supports: Part 2.” This article is the second in a two-part series on functional-based risk adjustment (FBRA). To read part one, click here.

Pass-through payment guidance in final Medicaid managed care regulations

As managed care has replaced fee-for-service (FFS) in the Medicaid market, states have often sought to replicate fee-for-service supplemental provider payment programs in managed care. Supplemental payment programs, sometimes called upper payment limit (UPL) programs, constitute a major source of revenue for providers in many states. Pass-through payments are the primary mechanism currently used to retain supplemental payment funding in managed care.

Final Medicaid managed care regulations, released April 25, 2016, confirm that pass-through payments will be restricted in the near future and ultimately eliminated. In this paper, Milliman’s Andrew Gaffner, Carmen Laudenschlager, and Christine Mytelka provide an overview of pass-through payment provisions in the new regulations, including the rationale and phase-out timing of the Centers for Medicare and Medicaid Services (CMS). They also discuss some of the difficulties the loss of pass-through payments will cause for states and providers and suggest a number of potential changes states can consider to mitigate the impact on managed care programs.

Adjusting MCO payment method beneficial for Medicaid Managed Long-Term Services and Supports programs

Functional-based risk adjustment (FBRA) may help Medicaid Managed Long-Term Services and Supports (MLTSS) programs improve their members’ quality of life and reduce program costs. This can be realized by adjusting capitation rates paid to managed care organizations (MCOs) based on member risk characteristics and not location of care.

In this article, Milliman consultant Michael Cook explains how a FBRA approach can address three examples of MCO payment results using location of care risk adjustment that typically conflict with a program’s goals.

While there are significant data and process hurdles to clear before implementing FBRA, there are also significant program improvements. Following are the ways FBRA addresses the concerns from the previous section:

Example #1: No variation in payments for differing levels of member risk

Unlike rate structure based on location of care, FBRA recognizes differences in member service needs through different MCO capitation levels beyond simply recognizing nursing home placement. The FBRA model in Wisconsin is realizing predictive “R-squared” metrics of 35% to 50%, which are significantly higher than metrics typically seen for acute care risk adjustment models.

Example #2: Member transitions into the community late in a contract period

Because MCO capitation is calculated using member characteristics rather than location of care, it is in the MCO’s financial interest to improve the efficiency and quality of LTSS delivery regardless of the current location of care. Transitioning a member from a nursing home to the community will not directly influence the capitation associated with that member, so MCOs retain the incentive to transition members from nursing homes to the community as quickly as is appropriate.

Example #3: Transitions into the community for high-need members

Because changing the location of care for members does not directly influence capitation rates, there is a financial incentive for MCOs to encourage delivery of care in the most efficient manner for each member regardless of the member’s service needs or current location of care. MCO capitation under FBRA will be higher for members with high levels of service needs, and MCOs that achieve any gain in overall service efficiency will realize improved financial results….