Chronic Care Act: Making the Case for Non-Medical Services and Supports in Medicare Advantage Supplemental Benefits

Analyzing Data To Help Plans Identify Target Population for Benefits

 

THE ISSUE

With new flexibility in Medicare Advantage (MA) supplemental benefits, plans can now target certain non-medical benefits to high need beneficiaries. To effectively develop and market new benefits, plans must first know what makes someone a high cost, high need enrollee.

We often hear that high cost beneficiaries have multiple chronic conditions and need extensive healthcare services. We know that chronic conditions play an important role in the spending equation, but we must also understand the impact of other key indicators of frailty (e.g., cognitive and functional impairments) on spending.

We analyzed the impact of chronic conditions and activities of daily living (ADLs) on Medicare utilization in an effort to better understand high cost, high need populations that could benefit from additional benefits.

OUR WORK

Using the 2015 Medicare Current Beneficiary Survey (MCBS), our team sought to examine the relationship between chronic conditions, functional need, other individual characteristics (e.g., Medicaid eligibility, cognitive impairment), and Medicare spending.

Our research found that having “functional impairment” –the inability to perform daily activities and the underpinning of needing help with bathing, eating, dressing – is the factor that is highly associated with being high cost, even when holding constant chronic conditions. That is, someone with 3+ chronic conditions who does not have functional impairment is half as expensive as someone who does have functional impairment.

OUR VIEW

This research has implications for the implementation of the Chronic Care Act which gives plans the authority to target benefits to high need enrollees. It demonstrates the importance of considering how functional impairment contributes to high healthcare spending and how addressing needs for non-medical supports and services may help in creating integrated and high value healthcare delivery for all older adults.