Are Expanded Supplemental Benefits the MA Skeleton Key?

These unique Medicare Advantage services align with equity, outcome, and value-based objectives. Can they unlock all three?

A skeleton key is designed to fit multiple locks. In the case of MA, one such key is expanded supplemental benefits, non-medical services that—per CMS' definition—"diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and health care utilization to all beneficiaries."

Introduced pre-pandemic, these services present a way for MA health plans to address social risk via good old benefit design, versus philanthropy or ancillary programs. But can they? 

CMS RFI seeks answers

While supplemental benefits aren't new, CMS questions about their use and effectiveness are. How MA plans leverage, partner on, and prove the value of supplemental benefits was included in CMS' June 2022 RFI, which seeks to strengthen the MA program.

And why wouldn't the agency want to strengthen the program that is poised to replace its current model?

By plan year (PY) 2023, MedPAC predicts that MA enrollment will overtake that of original Medicare and reach 69% of beneficiaries within the decade. In addition, The Commonwealth Fund (TCF) reported in February 2021 that a growing number of MA enrollees have both social risk factors and complex medical needs. And with every federal healthcare initiative embedding equity goals, CMS appears to be all in on MA—bolting on every manner of benefit and cost flexibility to the private market chassis to help drive value-based care.

But many questions remain:

• At what velocity will MA plans grow their expanded supplemental benefits?
   
• Will members not only enroll in but use what they've signed up for—and how can utilization barriers be overcome?
   
• Can supplemental benefits targeting social risks actually improve health outcomes?

What answers are available must be teased from MA plan data and the RFI responses (due August 31).

But first, a brief history of supplemental benefits.

How supplemental benefits expanded beyond the medical

Dental, vision, and hearing benefits were among the first supplemental benefits MA plans could offer to differentiate themselves from one another and traditional Medicare. Since PY 2018, their presence has flourished. TCF analysis of CMS data shows that between 93%-98% of plans offered vision and hearing in PY2020, with another 87% offering dental.

For PY2109 and per TCF, CMS expanded these options to include "nonmedical benefits." For PY2020, CMS introduced another expansion, Special Supplemental Benefits for the Chronically Ill (SSBCI). Again from the TCF: "Plans may choose to offer these benefits to enrollees with certain chronic conditions, and the benefits do not have to be primarily health-related, as long as the item or service can reasonably improve or maintain health or function of the enrollee."

Even before these expansions, MA plans could offer supplemental benefits that began to touch on the social determinants of health (SDOH), albeit narrowly. These benefits and their uptake as of PY2020 include:

• Transportation – 35% of plans offer, 34% of beneficiaries enrolled
   
• Meals – 46% offer, 45% enrolled
   
• Home modifications – 10% offer, 2% enrolled

There is much room for growth. But it will take ROI confidence on the part of health plans and more robust customer utilization to achieve.

Customers pay for benefits they don't use

For health plans to know if supplemental benefits can impact equity, outcomes, and value, customers have to use them.

A November 2021 study on OTC benefits from the Consumer Healthcare Products Association (CHPA) showed that medical costs and hospital admissions were 8%–62% lower for select groups that used their OTC dollars. Most members, however, don't take full advantage of their benefit, leaving 30% annually—$5 billion aggregate—untapped.

"There's a lot of benefit left on the table," says David Spangler, senior vice president for legal, government affairs and policy at CHPA, in the agency's news release for the study. "When we see so many advantages in terms of real cost to health plans and systems, like reduced per member per month medical and utilization costs, health plans should do all they can to get enrollees to use this benefit."

The investment requirement

There are many reasons why MA payers are lagging on select expanded supplemental benefits. First, these benefits are coming of age just before and during the pandemic. And while quarterly plan profits have rebounded, COVID-19 costs have been unexpected and massive. Health plans are making significant new investments with care.

As TCF notes: "Supplemental benefits may help plans improve health outcomes and address unmet patient needs. However, to offer these benefits, plans must decide the best way to allocate resources among different types of services, some of which may require significant investment and infrastructure."

The study adds: "Some plans may not offer these additional benefits in the early years because of a lack of evidence on these benefits' impact on health outcomes."

Exactly what kind of evidence will it take? Therein lies the rub of the SDOH business case.

The million-dollar question

The industry now widely accepts that 80% of health outcomes depend on nonclinical factors. The industry OTC data previously cited establishes a connection between supplemental benefit use and better outcomes.

But the gap must be closed between industry-level data and the native intel that health plans need to make investment decisions.

TCF notes that "[i]ncreases in 2021 offerings suggest that plans are beginning to make these investments." A 2022 Milliman study—also based on CMS data and commissioned by the Better Medicare Alliance—supports this with growth areas such as home and community-based nonmedical services (e.g., in-home support, palliative care, caregiver support and adult day care).

There is also the CMS RFI. If MA plans cannot yet justify larger supplemental benefit investments, how much data will they be able (or willing) to provide CMS on use and outcomes? Other MA RFI questions target:

• How supplemental benefit outcomes are evaluated;
   
• How MA plan partnerships with CBOs and other third-party providers impact service delivery; and
   
• What data CMS should collect to provide these and other answers.

Watch for the RFI responses after August 31 to see whether MA plans are beginning to realize more advantages from supplemental benefits or if the skeleton key is still only a quarter-turn through the lock.