Social determinants of health (SDOH) are conditions in the environments in which people are born, live, learn, work, play, worship and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks. There is increasing evidence that these nonclinical and social factors play a role in people’s health that is as important as, if not more important than, medical care.i Accordingly, as insurers are pressed to improve the health of their beneficiaries and reduce costs, plans are looking for ways to integrate social interventions into their coverage, payment and delivery models.
The federal government has given new flexibilities to Medicare Advantage (MA) plans to address SDOH within their benefit packages. However, these flexibilities may not be broad enough to fully permit plans to incorporate benefits that address SDOH, and the complexities inherent in implementing these interventions may mean that full-scale deployment of SDOH benefits in MA is still years away.
Background: MA Supplemental Benefits
A unique feature of MA plans is their ability to attract enrollees by enriching their offerings beyond the standard original Medicare benefit package, including by offering extra “supplemental benefits.” MA plans could use this flexibility to address deficits in their enrollees’ SDOH through the benefit package,ii but have traditionally faced three main constraints when devising benefit packages that address SDOH: 1) the Centers for Medicare & Medicaid Services’ (CMS’s) limits on the types of benefits plans can offer,iii 2) the financial imperative to actually pay for supplemental benefitsiv and 3) the requirement to offer benefits uniformly to all enrollees.v
CMS has begun to loosen its past restrictions, giving MA plans new flexibilities to offer benefits that address SDOH. These new flexibilities, and their limitations, are described below.
Expansion of the Definition of “Primarily Health Related.” CMS in its contract year (CY) 2019 Final Call Letter announced that it will consider any benefit to be “primarily health related” so long as it is intended to “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 healthcare utilization.”vi In this announcement and subsequent guidance, CMS offered examples of home safety modifications, adult day care services, respite care, home-based palliative care, in-home support services, support for caregivers, medically approved non-opioid pain management, and other benefits typically seen in Medicaid programs or Special Needs Plans for Medicare-Medicaid dually eligible enrollees. Notably, in-home food delivery is absent from this list.vii
In an April 27, 2018 memo, CMS wrote that benefits are not primarily health related if “solely or primarily used for . . . social determinant purposes.” These new supplemental benefits must also be “recommended by a licensed medical professional as part of a care plan,” underscoring their medical nature.viii
Reinterpretation of Uniformity. Since 2017, CMS has been testing nonuniform benefit packages in the Value Based Insurance Design (VBID) model test, through which MA and MA-Part D (MA-PD) plans may offer extra supplemental benefits to enrollees with chronic conditions.ix In April 2018, CMS extended these principles to the entire MA program, and announced that it will “permit [MA] organizations the ability to reduce cost sharing for certain covered benefits, offer specific tailored supplemental benefits, and offer lower deductibles for enrollees that meet specific medical criteria, provided that similarly situated enrollees (that is, all enrollees who meet the medical criteria identified by the [MA] plan for the benefits) are treated the same.”x
This new flexibility does not impact the type of benefits that an MA plan can offer, only the individuals who would be eligible to receive them. In theory, a plan could use it to more narrowly target a long-term-care-type benefit of the type now considered “primarily health related” toward a particular clinical group. However, this reinterpretation does not allow plans to allocate benefits directly based on social need. As CMS stated when announcing its revised policy, plans cannot use “living situation and income” to classify enrollees for nonuniform benefit purposes.
Special Supplemental Benefits for the Chronically Ill. The third change, included in the Bipartisan Budget Act of 2018,xiis the addition of what CMS has described as “Chronic” supplemental benefits or “Special Supplemental Benefits for the Chronically Ill” (SSBCI). Beginning in 2020, MA plans can offer benefits that “have a reasonable expectation of improving or maintaining the health or overall function of [a] chronically ill enrollee” but need not be primarily health related.xii CMS commented in recent rulemaking that it is “possible for certain [SSBCI] offerings to address issues beyond a specific medical condition, such as social supports.”xiii, xiv
These SSBCI are not subject to the traditional requirement that benefits be offered uniformly, and plans can limit their availability to enrollees with specific chronic conditions, allowing them to vary, or target, SSBCI as they relate to an individual enrollee’s specific medical condition and needs. But SSBCI can be provided only if they will improve that specific enrollee’s health or overall function as related to the specific chronic illness; the basis for offering SSBCI cannot be conditions unrelated to medical need, “such as living situation or income.” CMS has recently solicited comment on whether it should permit plans to take financial need into account.xv
Value-Based Insurance Design. The VBID model may be the most potent opportunity for MA plans to offer benefits that directly address SDOH. Beginning in 2020, MA plans participating in the model may offer benefits that address SDOH, such as “transportation or meals,” “disease-specific household items such as air purifiers or air conditioners,” and certain over-the-counter items.xvi
Crucially, plans in the VBID model can allocate these nonmedical benefits on a nonuniform basis by taking the enrollee’s socioeconomic status into account, rather than on the basis of clinical need. VBID-participating plans may allocate benefits based on the fact that the enrollee has “Low Income Status” (LIS) and, as such, is receiving some form of Medicare subsidy. While LIS status is a somewhat crude indicator of need for a particular SDOH benefit, this presents the only place in the MA program where both eligibility for an SDOH benefit, and the benefit itself, can be based completely on nonmedical considerations.
Despite New Flexibility, Challenges Remain
Each of these developments demonstrates an incremental shift within CMS and Congress toward the view that MA plans can improve the health of their beneficiaries by focusing on underlying SDOH. Still, it may be some time before MA plans can take full advantage of these new authorities, if at all.
Any MA plan wishing to address SDOH through the benefit package must confront the fundamental challenge of paying for those benefits. Plans must consider whether the cost of SDOH benefits will crowd out other popular supplemental benefits (like vision and dental) or lead to premium increases that may reduce the plan’s market attractiveness.
The patchwork nature of CMS’s multiple developments and announcements has made it difficult for plans to understand the various options available. Each has its own complexities, and leveraging each of them to create a comprehensive approach to SDOH is a challenging task. Moreover, the timing of the announcements, combined with the long lead times plans face in benefit planning, may mean that delays in implementation are to be expected. CMS announced the new flexibilities for primarily health related benefits and uniformity in spring 2018, leaving plans little time to modify their benefit structures before the June 2018 benefit package submission deadline for 2019 plans. With more lead time, we may see plans take more aggressive action in regard to 2020 benefit design. The 2020 benefit year is also the first time when plans can offer SSBCI or VBID benefit packages addressing SDOH. But, given the need to examine and plan, plans may not implement these changes in earnest until 2021.
Finally, the notion of addressing SDOH insurance benefit design is somewhat new. MA plans can look to experience in the Medicaid managed care and Medicare-Medicaid dual eligible context, but even plans in those markets are breaking new ground.