Supplemental Benefits: New Rules and New Opportunity

Two recent Centers for Medicare & Medicaid Services (CMS) Health Plan Management System (HPMS) memos clarified supplemental benefit parameters and the rules for uniform distribution of those benefits (“Reinterpretation of the Uniformity Requirement,” April 27, 2018, and “Reinterpretation of ‘Primarily Health Related’ for Supplemental Benefits,” April 27, 2018). Supplemental benefits were defined as “an item or service (1) not covered by Original Medicare, (2) that is primarily health related, and (3) for which the plan must incur a non-zero direct medical cost.” Of primary interest to health plans in the immediate future as bids are due June 4, 2018, are the following:

  • Beginning in CY 2019, the definition of “primarily health related” is expanded to consider an item or service as primarily health related if it is used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization.
  • A supplemental benefit is not primarily health related under the previous or new definition if it is an item or service that is solely or primarily used for cosmetic, comfort, general use, or social determinant purposes.
  • The two types of targeted benefit offerings – reduced cost-sharing and additional supplemental benefits – must be available to all enrollees within a target population.
  • Target populations are defined by ICD-10 diagnoses or a subset of diagnoses within the targeted conditions.
  • Plans must use objective measureable medical criteria to identify eligible enrollees, and the enrollees must be diagnosed by a plan physician/medical professional or have their existing diagnosis certified or affirmed by a plan physician/medical professional. Eligible enrollees cannot be required to opt-in unless there is a prerequisite for participation in a wellness or care management program.Existing CMS marketing requirements for informing members of all supplemental benefits apply.

The primary requisite for determining which enrollees and what supplemental benefits is accurate and timely data. Which ICD-10 codes have the highest hospitalization rates or emergency department utilization? What benefits, either reduced cost-sharing or additional health-related services, can be offered to these members? Timing for determining 2019 benefits is short, however, those plans that are able to offer innovative, cost saving, and health status improvement benefits will have a competitive edge in open enrollment.

CMS provided many excellent examples of potential pockets of benefits in the two referenced memorandums. Anita Green, GHG’s Senior Director of Clinical Solutions lists some potential offerings below:

  • Telehealth services combined with technological solutions such as interactive scales and blood pressure monitors provided to members with congestive heart failure or members being followed for obesity can be an effective tool in reducing hospitalizations or preventing readmissions (and ultimately healthcare costs). Combining these tools with Bluetooth technology, health plans can monitor daily measurements and use that data to adjust treatment modalities in real time. Besides the obvious educational benefit to members, the implications of this telehealth benefit can be far-reaching for plans with membership in rural locations or members with transportation challenges.
  • Another initiative aimed at reducing unnecessary readmissions and safeguarding against unnecessary or inappropriate medication use is to leverage in-home pharmacy consultations as part of the care team strategy. The pharmacist performs a Drug Regimen Review: reviewing all medications the patient is currently using in order to identify any potential adverse effects and drug reactions, including ineffective drug therapy, significant side effects, significant drug interactions, duplicate drug therapy, and noncompliance with drug therapy. (Reference: Home Health Conditions of Participation Subpart C – Furnishing of Services 42 CFR §484.55c). The pharmacist works with the primary care provider and the healthcare team to optimize therapy for the member by providing recommendations to discontinue or reduce unnecessary medications and coordinate between multiple prescribers or pharmacies to prevent duplications.
  • Treatment for obesity has always been a priority for health plans, but previously limited options were available that could be reimbursed. Behavioral modification programs that have been successful include nutritionists, screening for body mass index (BMI), and clinical evaluations for prevention of complications and intervention weight-loss strategies. According to the American Heart Association (AHA)[i], approximately 34% of adult Americans are estimated to have metabolic syndromes – a cluster of risk factors to include hypertension, hyperglycemia, and hyperlipidemia, along with abdominal fat. Treatment modalities that focus on all aspects of metabolic syndrome can include lifestyle modification counseling, diabetic education and monitoring, exercise programs using fitness trackers as an interactive technology, along with clinical and pharmacy support in a care coordination approach.
  • An easy suggestion from CMS to complement the opioid overutilization efforts at network pharmacies and providers would be to provide reduced cost-sharing for mental health or treatment facilities available in the communities where the members reside.

A new day is dawning for innovation in defining supplemental benefits…utilize the utilization, diagnostic, and demographic data available in defining your membership to aspire to better outcomes and higher member satisfaction. GHG’s team of subject matter experts can assist you in defining new strategies.




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Debra Devereaux
Debra Devereaux

Deb Devereaux is Senior Vice President of Pharmacy and Clinical Solutions at Gorman Health Group (GHG). In this role, she is responsible for leading a team of pharmacists and business analyst consultants with broad health plan, Centers for Medicare & Medicaid Services (CMS) and Pharmacy Benefit Manager (PBM) experience. Deb brings GHG clients more than eight years of Medicare Part D operations expertise. Read more

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