Alex Azar, the new Secretary of the U.S. Department of Health and Human Services has made clear in numerous speeches since he began his leadership at the Department that moving Medicare to a value-based payment system is one of his highest priorities.
This is good news for older Americans who rely on Medicare. It is also critically important to health plans, clinicians, health systems, technology companies and community partner organizations that are creating innovative ways to meet the needs of today and tomorrow’s beneficiaries.
More and more the health community is moving away from paying for the volume to paying for value in order to address these needs. Evidence shows that an emphasis on improving health outcomes is key to addressing the needs of an aging population, while controlling rising costs.
No one action by the Secretary will make this new focus universal, but recent actions by the Centers for Medicare and Medicaid (CMS) and Congress are making clear that there are numerous steps being taken by policymakers to strengthen the move towards value-based care.
Under a proposal that many are hoping will be finalized by the CMS April 2nd deadline for annual changes to Medicare Advantage, Medicare Advantage plans would have greater flexibility with services under supplemental benefits. CMS is also proposing to change a rule within Medicare Advantage — known as the “uniformity rule” — to allow plans the ability to reduce cost sharing, offer specialized supplemental benefits and more affordable deductibles for beneficiaries that meet specific medical criteria.
The hope is that it would encourage sick beneficiaries to utilize services that are clinically recognized for actually improving overall health.
In order to enable health plans to offer value-based benefits to beneficiaries in Medicare Advantage, there needs to be clarification of uniformity requirements. This will enable additional benefits to targeted populations. There also needs to be a modification of an artificial limit placed on Medicare Advantage called “the meaningful difference requirement” that restricts plan offerings allowed in a single market to offer such targeted benefits is essential.
The concept of value-based insurance design (VBID) aims to improve quality while controlling costs. It does this by reducing out-of-pocket costs to beneficiaries for high-value services proven to have results and adding services that enhance the chance for improved outcomes for targeted groups of patients with certain conditions or circumstances.
Examples may include eliminating co-pays to see certain specialists or adding support services that increase the likelihood of a patient’s follow-through on necessary visits or clinical recommendations.
These changes have the support of both Republicans and Democrats. In fact, Congress voted for legislative language that became law this year to expand the definition for the type of supplemental benefits in Medicare Advantage, as well as expanding demonstration projects to test new models of value-based benefits design to all 50 states, and permanently reauthorizing Special Needs Plans to better enable Medicare Advantage plans to tailor delivery of care to certain populations of patients with chronic needs.
All these efforts, enforced by the proposed rules now under final consideration at CMS offer new opportunities for better care for older Americans. We encourage Administrator Seema Verma to finalize the proposed changes and in doing so, move health care forward to meet the goals both she and Secretary Azar have articulated to the nation.
These changes, once finalized will enhance the opportunity for plans and providers to improve the quality and cost of care for beneficiaries in Medicare Advantage through greater flexibility to offer care in the home, community-based care, lower cost-sharing for essential care and services, as well as develop innovative benefit design targeted to patients with critical needs.
Value-based care through better insurance design, integrated care and a patient-centered, holistic approach to meeting care needs are all central to modernize Medicare that meets the challenge of reducing cost and increasing access to high-value services.
It is happening every day across the country. Expanding access and innovation is a wise step for CMS and we look forward to the innovations and improvements in care and cost for millions more Medicare beneficiaries.
Allyson Y. Schwartz is president and Chief Executive Officer of the Better Medicare Alliance and is a former U.S. Representative from Pennsylvania.