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June 07, 2018 01:00 AM

New federal law could spur Medicare Advantage plans to avoid enrolling sick beneficiaries

Virgil Dickson
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    Insurance companies may decline to offer additional benefits outlined in a new federal law in an effort to dissuade frail seniors from joining their Medicare Advantage programs, according to a new analysis published Wednesday.

    The Chronic Care Act, which passed earlier this year, allows insurance companies offering MA plans to pay for non-medical services like installation of raised toilet seats and grab bars in bathrooms or provision of hearing aids, scooters or personal care services. Experts have predicted that covering these services would reduce emergency department use and readmissions.

    The law's goal was to integrate coverage and access to both medical and non-medical services. Under the statute, Medicare Advantage plans can offer these new benefits starting in 2020.

    But insurance companies may decline to offer the expanded coverage to stop severely ill seniors who need costly care from joining their plans, according to an analysis in the New England Journal of Medicine. The piece was co-authored by a professor at the University of Maryland School of Public Health and a scientist at Johns Hopkins Bloomberg School of Public Health.

    There are significant Medicare spending differences for beneficiaries with functional impairment and those without such impairment, according to the co-authors.

    To avoid this disincentive to offering new benefits, lawmakers should require fee-for-service Medicare to cover non-medical services too, according to David Lipschutz, senior policy attorney at the Center for Medicare Advocacy. "It's a matter of basic equity and it's leaving the majority of Medicare patients without access to the new services," Lipschutz said.

    But insurance companies said the concerns highlighted in the analysis were overblown.

    "The argument being made by these authors is speculative and does not recognize some of the important realities of the Medicare Advantage program," said Cathryn Donaldson, an AHIP spokeswoman.

    Average spending on Medicare Advantage is roughly equivalent to Medicare fee-for-service, and plans regularly work to direct resources to enroll more complex, chronically ill individuals, she added.

    In addition, the analysis seems to ignore the existence of Medicare Advantage Dual Eligible Special Need Plans (D-SNPs), according to Dr. Cheryl Phillips, president and CEO of the SNP Alliance, a trade organization. These plans already enroll and coordinate care for some of the most chronically ill Medicare beneficiaries.

    "This article seems to imply that MA plans will avoid high risk and high-cost beneficiaries, yet that is the very population that SNPs serve," Phillips said.

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