The final policy also gives Medicare Advantage plans a 2.53% pay bump for fiscal year 2020, up from the 1.59% projected in the advance notice.
In a package of payment and policy updates finalized Monday, the Centers for Medicare & Medicaid Services said Medicare Advantage (MA) plans will have broad flexibility next year to offer supplemental benefits that maintain or improve the health of chronically ill beneficiaries.
The idea is that MA plans are positioned to solve patients' problems that may impact quality outcomes but fall outside the traditional concept of healthcare delivery. Plans could choose, for example, to provide carpet cleaning to a patient with asthma, healthy food to a patient with heart disease, or transportation to a diabetes education program, CMS said.
"It allows them to manage the patient's health more holistically," CMS Administrator Seema Verma said Monday on a call with reporters. "They can see what the patient needs and tailor benefits accordingly."
"Sometimes the patient just needs something relatively minor that can keep them out of the emergency room, that can keep them healthy," Verma added. "Because they're managing the total cost of care for that patient, the idea is to allow them more flexibility to manage cost and quality for that patient."
The CMS announcement framed the policy as a way to keep costs down through competition among MA and Part D plans.
The agency proposed the policy in January.
MA Pay Raise
The updates also include a 2.53% payment increase for MA plans in fiscal year 2020, up from the 1.59% increase CMS had projected in its advance notice.
The significant uptick came from one input in the formula: the effective growth rate, which rose to 5.62% in the final rate announcement, from 4.59% in the advance notice, according to a CMS fact sheet.
The effective growth rate is based on Medicare fee-for-service data that are regularly updated to reflect more recent claims, Verma said Monday when asked about the significant increase.
About one-third of Medicare beneficiaries—more than 20 million people—are enrolled in MA plans, according to the Kaiser Family Foundation.
More information on the payment policy updates finalized Monday are available in the CMS press release, fact sheet, and 2020 announcement.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.