If changes unveiled by CMS last November to the Value-Based Insurance Design Model take effect for the 2019 program year, MA plans could enjoy more flexibility, which would allow them to tailor benefit designs toward populations with certain health conditions, according to Avalere Health’s new 2018 Healthcare Industry Outlook report.
But on the downside, the new flexibilities might also draw more health plans into the MA market, upping the competition.
If CMS finalizes the new model this year, plans will have more leeway to design plans than they have in the past, and this will allow them to tailor plans to specific disease populations, according to Avalere analysts. Avalere bases its assumptions data on enrollee experiences in MA special needs plans, which shows that outcomes are improved when benefits are tailored to specific conditions.
Sean Creighton, Avalere’s vice president of policy practice, who spent more than a decade at CMS leading policy development prior to Avalere, said plans should make use of the Medicare Star Ratings by making it a priority to score high and earn higher payments, then invest these increases in supplemental benefits that attract enrollment.
Creighton also predicted Medicare cost growth, which has been level at 2% over the past few years, will begin to rise, renewing an interest in entitlement reforms.
Other highlights from the report include:
(1) All eyes will be on Affordable Care Act (ACA) waivers. With Congress unable to agree on Medicaid reform thus far, states are more and more looking to manage changes to the massive entitlement program themselves through the waiver program provided under the ACA, according to Avalere.
More than two-thirds of states have submitted comprehensive waiver applications in the past year, with many of them targeting increases in beneficiary premiums and cost sharing, required job search programs, limits in the duration of coverage, and reductions in the scope of benefits, Avalere said, while other states are expanding coverage for substance abuse treatments. “The [HHS] Secretary has broad authority to approve waivers and is likely to drive the program toward more commercial style benefits with greater personal responsibility requirements,” Avalere predicted.
Caroline Pearson, senior vice president of policy and strategy at Avalere, noted the impact potential of the waiver program. “Novel state approaches to waivers can start a trend among states and even lead to changes in federal program rules.”
(2) Data will be king. In 2018, health plans will look to data to help them save money and improve quality of care, Avalere said. Data will help plans develop high-performing provider networks, develop care management programs derived from member utilization patterns, manage risk-based programs and support value-based contracts.
(3) More medical spend will channel through alternative payment models (APMs). Partisan disagreements aside, the U.S. is steadily on target to transition to value-based reimbursement programs, Avalere said. “In 2017, some of the largest commercial plans reported they are running nearly 50% of their medical spend through APMs, with goals to go higher,” the analysts said. In addition, CMS is continuing to work on these models and other bundled payment models.
by Diana Manos
Adapted from the 1/15/18 issue of AIS’s Health Plan Week
Published by AIS Health
© 2018 Managed Markets Insight & Technology, LLC. All Rights Reserved.