Key Highlights of This Brief:
Much ado has been made in recent years of the increased flexibility surrounding MA supplemental benefits, and for good reason—MA plans now have an unprecedented ability to offer a broader set of benefits and tailor products to the specific needs of their unique member populations. These benefits not only improve members’ quality of care and experience but also help MA plans attract new members, reduce spend on emergent care and increase their Star Ratings.
This sea of change has many contributing factors, but the leading cause can be boiled down to two synergistic regulatory changes:
This flexibility has clear benefits for both plans and members. By providing a regulatory pathway to address social determinants, a key contributing factor to health inequities being experienced across the healthcare ecosystem today, benefit innovations could play a significant role in how care is tailored to each individual moving forward. Given these recent legislative changes, plans are left with an important question: how should plans evaluate, prioritize, implement and assess the performance of new supplemental benefits?
For many plans, the answer lies in a rapidly evolving concept—SDOH—a concept we detail in a previous Executive Brief (see Figure 1). These determinants, many of which are not primarily health-related, have significant implications on member health and are therefore ideal targets for supplemental benefits. Furthermore, CMS stated in its 2023 Final Call Letter that it is examining future changes to the risk-adjustment model and Star Ratings program to incorporate SDOH and health equity factors, signaling that all MA plans could eventually be required to incorporate these factors into their plan operations more broadly.
This notion is quite timely given CMS’ recently released Request for Information (“RFI”) on resolving social determinant issues and advancing health equity as part of the broader strategic vision for the future of the Medicare program (responses were due August 30th, 2022). It will be interesting to monitor how broader industry players address SDOH and the future role supplemental benefits could play in furthering these efforts in their official responses.
In a recent Executive Brief, we explained how large health plans and upstarts alike are looking to dental benefits to improve member health and grow their product portfolios. In this brief, we’re turning to the “new frontier” in supplemental benefits to help plans navigate the rapidly evolving landscape of benefits, vendors and SDOH programs that have proliferated in the wake of recent regulatory changes.
Figure 1: Social Determinants of Health
Source: Kaiser Family Foundation, Social Determinants and Health Equity, 2018
Seniors place great emphasis on traditional supplemental benefit offerings, such as dental, vision, hearing and fitness. With over 90% of Individual MA plans offering dental, vision, hearing, fitness and telehealth benefits, and over 4 in 5 offering Over the Counter (“OTC”) benefits, these benefit domains can be considered “table stakes” offerings. It is essential for MA plans to continue to offer each of these staple benefits to remain competitive.
For example (see Figure 2), in as little as three years, supplemental benefits such as OTC have gone from pilot supplemental benefit programs to expansive prerequisite offerings for market competitiveness.
Product differentiation is more important than ever as the average beneficiary has access to almost 40 different plans, that all vary in terms of their supplemental benefits. As competition heats up for a share of the supplemental benefits wallet, MA plans must evolve their evaluation of these traditional supplemental benefits to stand out in a crowded field while also ensuring that they submit a compliant and financially sustainable bid.
Figure 2: Percent of Medicare Advantage Plans Offering Extra Benefits in 2022
Source: Kaiser Family Foundation, Medicare Advantage 2022 Spotlight
Outside of the aforementioned “table stakes” benefit domains, innovative SDOH offerings are entering the market with a greater focus on whole-person health based on community-specific needs. Recent trends have exhibited a broad expansion in previously piloted SDOH benefits available to beneficiaries. While the leading benefits, such as remote monitoring and meal/nutrition benefits, have significant penetration among Individual MA plans, lesser-known benefits such as in-home caregiver support services and social needs benefits are also gaining steam as technology-focused start-ups continue to deploy new benefit solutions across the MA marketplace (see Figure 3).
Figure 3: Percent of Individual Medicare Advantage Plans Offering Extra Benefits in 2022
Source: Kaiser Family Foundation, Medicare Advantage 2022 Spotlight
Within the universe of SDOH-focused benefit trends that are beginning to emerge, each SDOH category has its own set of potential supplemental benefits that may be uniquely tailored to social and equity challenges across specific member cohorts, as illustrated in Figure 4.
Figure 4: SDOH challenges across specific member cohorts.
Sources: MedicareAdvantage.com Fall Prevention Guide, 2022; CDC Fall Data, 2020; AHA Study, 2019; NCBI Diabetes Data, 2016; KFF Medicare, 2016;
Pew Research on Loneliness, 2020; Campaign to End Loneliness, 2022; Pew Research on Internet Use, 2022
With a wider breadth of supplemental benefits coming into play, MA plans have new and more complex decisions to make year-over-year as the “shelf gets more crowded.” These questions include:
At the end of the day, MA plans must break down complexities and establish a routinized process to evaluate and determine which benefit offerings will provide the greatest long-term benefit, medical or non-medical, to beneficiaries in a world of complex choices.
For MA plans, the process of prioritizing benefit enhancements across the portfolio, geographic footprint and membership cohorts can be challenging. Further complicating these efforts are the many stakeholders—from compliance to clinical programs to claims processing to corporate strategy—that need to be involved in the effort from strategy development through execution.
To navigate these challenges, HealthScape proposes a “test-and-learn” model (see Figure 5) for MA supplemental benefits, balancing the need for broad organizational buy-in with the focus needed to implement impactful programs. Once MA plans identify their organizational goals for “New Frontier” supplemental benefits, the test-and-learn model begins with an integrated team tasked with identifying the highest-impact programs, weighing member needs, financial viability, operational complexity and competitor offerings. This team should also identify “test” products in the current book-of-business that have favorable membership and competitive dynamics for implementing enhancements and measuring success. While these efforts may be championed by product and clinical strategy teams, MA plans will need to establish a process for engaging the broader operational teams necessary to implement their SDOH-focused pilot programs.
Figure 5: Supplemental Benefit “Test-and-Learn” Model
(1) CMS – Contract Year (CY) 2023 Medicare Advantage Bid Pricing Tool Application
Organizational mobilization and implementation efforts begin with processes and/or the relationships necessary to deploy the benefit. As SDOH-related benefits vary greatly in scope and complexity, this process can range from a short-term claims system update to a long-term joint venture. Depending on the length of the implementation, plans should iteratively assess target products and markets based on all available information.
After the first bid “cycle,” the test-and-learn model becomes embedded in the annual bid preparation process with the broader team to operationalize additional differentiated enhancements each year. MA plans should assess the success of newly deployed benefits for potential rollout to products with similar membership profiles, and continually examine the opportunity for future enhancements in rapidly changing markets.
HealthScape has recently supported several clients refresh their bid cycle activities to include this new wave of benefit design. Key learnings include:
From National MA plans looking to level up their product strategies, to local Adult Day Health centers seeking to enter the MA space, HealthScape has the experience and expertise to help. We have supported plans of all sizes innovate and manage their supplemental benefits strategy to drive MA membership and optimize performance.