E2 – 8 Rules for Implementing New Medicare Advantage Supplemental Benefits

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Check out the second interview in our series on new supplemental benefits offered through Medicare Advantage plans for 2019; Kenny Kan and Erica Breese discuss the "rule of 8."
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.
“The average cost of a readmission associated with malnutrition is 25–35% higher than a comparable non-malnutrition hospital readmission.” Kenny Kan


Fred Bentley , Managing Director, Center for Healthcare Transformation

Fred Bentley advises clients on health delivery and payment innovation, providing analytic and strategic insight on issues related to the delivery of care.

This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page.

Explore Other Interviews in This Series

E1 – New Supplemental Benefits Offered Through Medicare Advantage Plans


Erica: Welcome to Avalere’s second podcast on supplemental benefits in Medicare Advantage. My name is Erica Breese, and I’m a Director in Avalere’s Health Plans and Provider’s Practice. I am joined today by Kenny Kan, a Vice President at Avalere, and an expert in all things health plan operations and policy. Prior to joining us at Avalere, Kenny served as chief actuary for both Humana and CareFirst.

As a reminder, CMS recently expanded the allowable supplemental benefits to include a much broader category that includes non-medical benefits targeted at improving outcomes and reducing utilization of high-cost emergency services.

In our last podcast, Kenny outlined the “rule of 8”, or the 8 questions that plans must answer when implementing a new benefit. During this podcast, we are going to return to the rule of 8 and look closely at how to evaluate coverage for a specific service. Today we are going to focus on meals and nutrition, because our analysis has shown that over one-third of plans will cover meals and nutrition in 2019, making it one of the first benefits that many plans consider. Anyway, to get started, Kenny, can you refresh our memory on what the rule of 8 includes and what plans need to think about?

Kenny: Thanks, Erica. Here are 8 questions that make up the “rule of 8”:

  1. How does this supplemental benefit fit into the overall MA strategy and overall benefit design?
  2. What is the supplemental benefit?
  3. What is the targeted sub-population, and how do you stratify the risk?
  4. What triggers the benefit’s eligibility?
  5. What is the benefit duration?
  6. How do you measure outcomes, analyze the ROI, and price the benefit?
  7. How do you change IT systems and administer while being mindful of the impact to providers and beneficiaries?
  8. What happens if the ROI results are lousy?

In the case of the meals and nutrition benefit, in better understanding how this benefit fits into your overall MA strategy – is it to drive incremental growth? Or is for competitive reasons? Or does the plan intend to bend the cost curve?

What is the benefit – is it a meal delivery benefit, nutrition education, or wrap around community connection services?

What is the targeted population – is the health plan targeting MA seniors who are at risk of a malnutrition diagnosis? Or are you targeting healthier MA senior as a preventative measure?

In terms of ROI evaluation – systematic nutrition care, early identification of malnutrition, coupled with interdisciplinary team-based care, have yielded positive ROI outcomes at pilots at health systems like Intermountain and Advocate Healthcare. The average cost of a readmission associated with malnutrition is 25-35% higher than a comparable non-malnutrition hospital readmission.

The data for such supplemental benefits is limited, and one should always question what happens to ROI outcomes when the pilot is being rolled out to a much larger MA population. At Avalere, we have helped clients come up with creative data solutions and analytic frameworks to help health plans test and piece together ROI validation hypotheses.

In conclusion, health plans should consider the “rule of 8” in their MA benefits design. Please contact us at Avalere Health with any questions. Thank you.

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