06 Feb CMS: With a New Sheriff in Town, Opportunity Calls
CMS has a new Sheriff in town, and Seema Verma has an “expanded” view of the limits surrounding Medicare Advantage’s “supplemental benefits.” In this guest blog, Dave Sayen writes: this is going to be a Big . . .
Healthcare organizations often start as charitable or religious. When they prove their value, new entrants to the industry are often not-for-profit businesses or government entities. When they start to make business sense at this level, investors get interested and new businesses in the space are often for-profit. These businesses bring efficiency and discipline (with MBAs like me) and the earlier entrants get eaten or converted or sold. And the market concentrates. This happened with hospitals, nursing homes, home health, insurers, and now it’s going downstream.
Last week in its annual draft “Call Letter” to Medicare Advantage plans CMS did something remarkable. The call letter, which will be finalized in April, provides the details plans need to prepare their bids for next year. Medicare Advantage plans, paid on a capitated basis adjusted by beneficiary risk profiles and demographics, often offer some ‘supplemental benefits’ to appeal to members, new and existing. Think Silver Sneakers, Hearing Aids and, in the old days, prescription drugs. The Medicare statute limits these benefits to items that are primarily health related. Well, there is a new sheriff in town, and she has a different interpretation. The call letter proposes to open this up to include anything that compensates for a physical impairment, diminishes the impact of injury or disease, and/or reduces emergency room utilization.
As Joe Biden would say, this is a B F D. How about FaceTime, 24-hour doctor visits with no copay? Anybody need a ramp? A hot meal lifts the spirits. Who is cleaning the house? You see where I am going. Medicaid wised up for the need to provide non-medical support to keep people out of nursing homes. Now Medicare is using that playbook to keep them away from the clutches of those EDs, especially the out-of-network kind. Which could transform the home care industry as investors look for an opportunity. Right now this is still largely a mom-and-pop-business world, but that’s about to change. There were 13 home care franchises in 2000; now there are more than 45, according to Forbes. Startup costs are low: a few cell phones and a laptop. Not all that different from Uber’s model. Telehealth will be another winner; the members already have the technology, so it’s again a small investment. Who remembers Rosie from the Jetsons? Soon seniors will have a Roomba on steroids drone over to the house and clean the place and cook dinner. Courtesy of your friendly health plan.
Mimi Grant, President, Adaptive Business Leaders (ABL) Organization – Round Tables and Events for CEOs of Healthcare and Technology Companies