Clarifying the New Opportunities for HCBS Providers Under Medicare Advantage Plans

Regulation | May 01, 2018 | by Nicole Fallon

Medicare Advantage plans will be able to offer some new supplemental benefit options to their enrollees in plans that begin in CY 2019.  These new optional supplemental benefits may create opportunities for home and community-based service (HCBS) providers.

These new supplemental benefits policies for Medicare Advantage plans are the result of two key policy actions: the 2019 Medicare Advantage and Part D Final Rate Notice and Call Letter issued by CMS in early April 2018 and the passage of the Bipartisan Budget Act of 2018, which include provisions of the CHRONIC Care Act. Both expand the definition of supplemental benefits that can be offered by MedicareAdvantage plans to their enrollees but the definitions and the timing of these changes are different.

Under current regulatory interpretations, “supplemental benefits” are defined as those items or services that are: 1) Not covered by Medicare Parts A and B; 2) primarily health-related AND 3) for which the MA plan must incur a cost for providing the benefits. CMS, up until now, has interpreted “primarily health-related” as an item or service that prevents, cures or diminishes illness or injury. This interpretation has excluded items or services that have a primary purpose of daily maintenance.



CMS 2019 Medicare Advantage and Part D Final Rate Notice and Call Letter

Bipartisan Budget Act

Defining “primarily health-related” supplemental benefits

Supplemental benefits are considered “primarily health-related” if it will:

  • Diagnose, prevent or treat an illness or injury
  • Compensates for physical impairments
  • Ameliorates the functional/psychological impact of injuries or health conditions OR
  • Reduces avoidable emergency or health care utilization

Supplemental benefits under this broader definition must be:

  • Medically appropriate
  • Ordered or directly provided by a licensed provider as part of a care plan.

CMS also suggests in the Call Letter that these benefits may:

  • Be targeted or time-limited
  • Enhance quality of life
  • Improve health outcomes.

Expanded definition to include benefits that:

  • Have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee
  • Cannot be limited to being primarily health-related benefits.

Believed to allow healthy meals and transportation to medical appointments.

Also, permits the plan to target some of its supplemental benefits to specific chronically ill populations.

Implementation Year



While this is exciting news as it recognizes the need to integrate a more comprehensive list of services to help older adults in maintaining and managing their health and independence, it is important to keep in mind the following:

  • New benefits aren’t for all Medicare beneficiaries. These options are only available to individuals who are enrolled in a Medicare Advantage plan (today roughly 35% of the Medicare population nationally) that offers these HCBS services as supplemental benefits. This benefit or option is not available to individuals who remain covered by Medicare fee-for-service. Plans will need to specify in the bids they submit this June what supplemental benefits will be offered in CY2019.
  • This is an option, not a requirement. MedicareAdvantage plans are not required to offer supplemental benefits that meet these new definitions. It is not clear yet how widely available this option will be among MedicareAdvantage plans. This may result in some MedicareAdvantage plan enrollees having this option and others not.
  • More details about the benefit pending. CMS will be issuing detailed guidance for MedicareAdvantage plans to help them understand what they need to know prior to submitting their CY2019 plan bids in June 2018. We’ve been told that plans are awaiting this information before making a determination about whether they will include these new supplemental benefits in their CY2019 plan bids. In addition, we don’t expect additional guidance from CMS on the implementation of the Bipartisan Budget Act provisions relative to Medicare Advantage and Part D plans until they issue their draft CY2020 Call Letter.
  • Providers will need to negotiate and manage contracts with MA plans to deliver these supplemental benefits. On the positive side, MA plans don’t have the same restrictions in how they contract with providers allowing for more than just a straight fee-for-service arrangement. However, some MA plans have taken the approach of contracting with post-acute providers at an FFS rate minus a discount translating into less revenue per service. In addition, providers must manage and understand the terms of the contracts and how they get paid (e.g., prior authorization requirements, credentialing, new claims processes). These contract negotiations and management skills may pose challenges for some HCBS providers.

LeadingAge supports the expanded flexibility these new policies offer and the fact that this flexibility begins to recognize the need for addressing older adults’ needs more globally and in an integrated way.

However, many questions remain about how these new policies will impact providers, consumers, and the healthcare marketplace. Will we see a shift of Medicare beneficiaries from FFS to MA plan enrollment? This type of change will affect care delivery patterns and provider revenues. Declines in Medicare FFS enrollment could result in reduced market share for existing Accountable Care Organizations possibly impacting their ability to derive shared savings. Will current MA plan enrollees appreciate the new supplemental benefits and flexibility and change MA plans creating winners and losers? There is no doubt if MA plans offer these new supplemental benefit options, we will see an impact. How might these changes shape Medicaid benefits for dual eligibles? It remains to be seen if it will be a boon or bust for HCBS providers.

The Bipartisan Budget Act of 2018 also made the following changes impacting Medicare Advantage and Special Needs Plans(SNPs):

  • Permanently authorizing SNPs for duals, institutional and chronic care populations. Without this authorization, SNPs would have expired at the end of 2018.
  • Requires dual eligible SNPs to better integrate long-term services and supports and/or behavioral health services. (CMS has already requested comments on this requirement. LeadingAge submitted comments.)
  • Instructs the HHS secretary to develop new care management requirements for chronic care and disability SNPs
  • Expand the testing of the Value-Based Insurance Design Model to all states by 2020 (currently, being phased in in 22 states)
  • Allowing plans to include telehealth services for MA enrollees in its plan bids beginning 2020