SummaryThe COVID-19 pandemic will have ongoing, market-wide implications as Medicare Advantage (MA) plans contend both with responding to the virus and the disruption to their normal activities.
COVID-19 is rapidly changing the healthcare landscape, and MA plans must quickly adapt to respond to the pandemic, particularly given the upcoming 2021 MA plan bid deadline on June 1. With fast moving administrative and Congressional actions allowing additional flexibilities, plans can now pursue new strategies to help those affected by the virus. At the same time, orders to stay at home may result in some beneficiaries forgoing care, leading to new challenges for managing beneficiaries’ long-term wellness.
In particular, MA plans are evaluating several new considerations in relation to the virus:
- Potential impact to 2020 costs: MA plans priced their 2020 offerings before COVID-19. As a result, associated costs for the disease were not considered in plan bids or in the benchmarks against which plans bid. MA penetration is highest in metropolitan areas, where the highest number of COVID-19 cases are likely to be. Plans must now consider whether decreased spending on elective procedures or deferred utilization will offset the higher-than-anticipated costs associated with COVID-19 treatment. Plans should understand how the pandemic is likely to impact utilization for their patients in their specific geographic area.
- Effect on bids and benefits for 2021: MA plans are now in the process of developing their bids for 2021. A major challenge for plans for 2021 will be how to accurately project their risk scores for the bid process. The risk score is used to adjust payment for health status. For 2021, risk scores will be based in part on diagnoses recorded in 2020. CMS recently announced that MA plans will be permitted to use diagnoses recorded during telehealth visits under certain circumstances for risk adjustment. Despite this new flexibility, however, changes in utilization could occur as a result of COVID-19. Risk scores are a critical part of plan payment and are also key in determining the level of rebates that can be applied to supplemental benefits. Plans must ensure that they are prepared to collect and submit data from telehealth services. In addition, plans will need to forecast the impact of 2020 utilization patterns on risk scores and identify potential downstream implications.
- Implications for quality reporting: MA plans will not be required to submit Healthcare Effectiveness Data and Information Set data or Consumer Assessment of Healthcare Providers & Systems survey data for the 2019 measurement year. In addition, the Health Outcomes Survey will be postponed to late summer. Because MA Star Ratings are calculated with data collected on actions that occurred 2 years prior, the COVID-19 outbreak could disrupt the MA market for several years. Star Ratings for some measures could be based on 2018 data for CY 2021, putting financial pressure on plans that did not perform well in 2019 and delaying potential reward for organizations that committed substantial resources to Stars performance. Plans are considering how best to proceed with quality initiatives, given the current disruption in patient care. Specifically, they will need to consider the implications of the pandemic, reporting and measurement changes, and patient demand/utilization trends on their quality strategies in both the near and longer term.
- Balance between focus on COVID-19 and other priorities: While responding to COVID-19 is a top priority, plans must simultaneously prepare for other upcoming changes. Beneficiaries with end-stage renal disease will be able to enroll in MA for the first time beginning with the 2021 plan year. In addition, plans must consider their participation in CMMI demonstrations, including the ongoing Value-Based Insurance Demonstration (VBID), the new hospice carve-in under VBID, and the Part D Senior Saving Model. Further, plans will need consider the potential impact of the upcoming election on coverage and the implications of possible Congressional activity to redesign the Part D benefit.
- Ability to use supplemental benefit flexibilities to address non-medical challenges related to COVID-19: The pandemic will make it difficult for many people to access food, transportation, pharmacies, and other necessary services. MA plans currently have significant flexibility to provide supplemental benefits and target services to beneficiaries with chronic illnesses. Plans will need to determine if an increased need for these services exists among those who are affected by the pandemic. As social supports continue to influence patient outcomes and access to healthcare services during the COVID-19 outbreak, policymakers may consider if expanded flexibilities and funding for MA plans to provide these services to a larger group of beneficiaries could help meet the demands created by the virus.
- Coordination of care for the chronically ill: Plans will need to consider how to modify their approaches to managing care for beneficiaries with chronic illnesses. These beneficiaries may need to postpone routine appointments with providers, both for patients’ safety and because providers may need to temporarily shift their focus to responding to the pandemic. Plans must reassess how they can use their care management and other outreach programs to minimize the risk of these beneficiaries’ conditions becoming uncontrolled. In particular, this disruption in usual care patterns will increase the importance of telehealth and other digital health strategies for ensuring that beneficiaries remain engaged managing their conditions.
- Emergence of telehealth: Plans and providers are using telehealth at an unprecedented rate, potentially building an evidence base around its efficacy in a variety of new situations. In time, as providers and beneficiaries become more comfortable with remote interactions, this may lead to shifts in the site service on a more permanent basis. Plans will need to consider the role that telehealth can play in service delivery in the future.
- Implications for post-pandemic care: Even after the volume of COVID-19 cases decreases, the pandemic will have a lasting impact on the healthcare system. Most immediately, beneficiaries who postponed elective procedures and appointments may re-enter the healthcare system, creating unusually high demand. Among these patients, there may be a higher than average percent who have a condition that has gone undiagnosed or unmanaged, increasing they need for more serious intervention. At the same time, the intense pressure of the pandemic may take a toll on the provider workforce, creating new challenges for plans as they establish networks.
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