New Medicare Advantage rules provide greater flexibility for providers, recipients

Category: Centers for Medicare & Medicaid Services, CMS, Medicare Advantage

New Medicare Advantage rules provide greater flexibility for providers, recipients


The Centers for Medicare & Medicaid Services (CMS) has finalized a rule giving Medicare Advantage plans a 2.53 percent pay raise in 2020 as well as increased flexibility in supplemental benefits to patients with chronic illnesses.

In addition, CMS has adopted additional policies to help combat the opioid epidemic. While the 2.53 percent increase is more than the expected 1.59 percent pay bump CMS initially proposed, it is lower than the previous two years, which saw raises of 3.4 percent and 2.95 percent, respectively. For perspective, the U.S. Department of Labor reported inflation for the past 12 months (as of March 2019) at 1.9 percent.  

The final rule also gives Medicare Advantage plans more flexibility (beginning in the 2019 plan year) to offer supplemental benefits to patients with chronic conditions. Traditionally, supplemental benefits like these were prohibited because Medicare Advantage plans were only allowed to offer “primarily health-related” supplemental benefits. These benefits had to be available uniformly to all enrollees, creating a large burden on plan providers.  Medicare Advantage plans will now be able to offer varying supplemental benefits to chronically ill patients based on the patient’s specific medical needs and conditions.

The increased flexibility will allow Medicare Advantage providers to improve the lives of beneficiaries and tailor benefits to their specific needs, because Medicare Advantage plans can offer supplemental benefits that are not covered under Medicare Parts A or B, if they diagnose, compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization.  For example, CMS has indicated that plans may offer adult day health services, and/or in-home support services under the expanded definition of supplemental benefits when they meet these standards.  Some examples include providing meals in more circumstances, transportation for non-medical needs such as grocery shopping or to see a nutritionist, and home environment services, such as plan coverage for home air filters or carpet shampooing for a patient with asthma, or heart-healthy meals for a beneficiary with heart disease.

Further, CMS implemented several sections of the Bipartisan Budget Act of 2018 (Public Law 115-123) that allows Medicare Advantage plans to include additional telehealth benefits in their bids for Medicare benefits starting in plan year 2020.  Medicare Advantage plans will have more flexibility than they currently do in how they pay for coverage of telehealth benefits to meet the needs of their beneficiaries in their homes.

Additionally, in order to combat the opioid epidemic, CMS will implement Part D drug management programs for high-risk opioid users and 7-day supply limits for certain patients. 

CMS is also finalizing a number of policies for 2020 including:
(i) Pain Management and Complementary and Integrative Treatments in Medicare Advantage – CMS is encouraging plans to take advantage of the new flexibilities to offer targeted benefits and cost-sharing reductions for patients with chronic pain or undergoing addiction treatment;

(ii) Access to Opioid Reversal Agents – CMS is strongly encouraging Part D sponsors to provide lower cost-sharing for opioid-reversal medications such as Naloxone; and

(iii) Star Ratings – CMS is taking steps to advance Medicare Part D opioid-related measures through the Star Ratings development process.

These finalized rules will increase plan choices and benefits for Medicare Advantage plans by expanding the supplemental benefits providers can offer to beneficiaries. Additionally, Medicare Advantage plans will be given the opportunity to implement benefits programs to help combat the national opioid crisis.

Belmont Law student Seth Carver contributed to this report.

Top of Page