Why HHS wants Medicare Advantage plans to pay for home modifications, transportation for seniors

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HHS Secretary Alex Azar said the Trump administration is trying to better harness the flexibility of existing programs to address social determinants that drive up healthcare costs and hurt patient outcomes. (Health and Human Services)

Starting next year, Medicare Advantage plans will be allowed to pay for a wider array of health-related benefits including transportation and home health visits, Health and Human Services Secretary Alex Azar said on Wednesday.

And by 2020, HHS will extend the range of benefits even further to allow MA plans to cover benefits such as home modifications and home-delivered meals, he said. 

Why?

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"These interventions can keep seniors out of the hospital, which we are increasingly realizing is not just a cost saver but actually an important way to protect their health, too," Azar said. "If seniors do end up going to the hospital, making sure they can get out as soon as possible with the appropriate rehab services is crucial to good outcomes and low cost as well. If a senior can be accommodated at home rather than an inpatient rehab facility or a [skilled nursing facility], they should be."

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Azar was speaking in D.C. at a healthcare policy symposium focused on social determinants of health hosted by Utah-based Intermountain Healthcare and the Orrin G. Hatch Foundation's Hatch Center.

He was focusing on the agency's approach to social determinants a day after it was announced that CMS would begin allowing states to cover a broader range of mental health services under Medicaid. Specifically, CMS would consider Medicaid demonstration waivers covering short-term stays for acute care provided in psychiatric hospitals or residential treatment centers in return for states expanding access to community-based mental health services.

As he spoke, Azar also teased new focus areas coming from CMS' Center for Medicare and Medicaid Innovation (CMMI) for helping vulnerable populations.

“What if we provided more than connections and referrals? What if we provided solutions for the whole person including addressing housing, nutrition and other social needs all together?" Azar said. "What if we gave organizations who work with us more flexibility so they can pay beneficiaries' rent if they are in unstable housing or make sure that a diabetic has access to and can afford nutritious food? If that sounds like an exciting idea, then stay tuned to what CMMI is up to.” 

Azar said the moves are part of a broader push under the Trump administration to better harness the flexibility of existing programs to address social determinants that drive up health costs and hurt patient outcomes. 

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Medicare Advantage (MA) plans are offered by private companies approved by Medicare and paid by Medicare to cover patients' benefits including hospital and medical insurance.

While the idea has been lauded by health experts, Kaiser Health News reported few seniors will actually be able to access these changes. Medicare officials estimate about 7 percent of Advantage members — 1.5 million people — will have access, KHN reported.

Companies offering MA plans both compete for patients and hold the risk for them, Azar said. "They've got incentives to offer benefits that are both appealing to their members and that will bring down healthcare costs whether those benefits are traditionally thought of as health services or not," Azar said. "The key is just that we need to give them the flexibility to do this, which we generally don't do."