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How Payers Can Improve the Value of Long-Term Support Services

Commercial payers can improve their long-term care term support (LTSS) services and related benefits with value-based benefit design.

Payers can improve LTSS with coordinated care teams and specialized healthcare settings.

Source: Thinkstock

By Thomas Beaton

- Providing long-term support services (LTSS) impact commercial payers who need to address complications and billions in costs associated with this kind of care.

In 2016, the United States spent $92.4 billion on home health care services and $162.7 billion on nursing care and retirement home facilities. Roughly 77 percent of home health services expenses were paid by Medicare and Medicaid, the rest falling to private payers. Private payer spending on home health and nursing care grew by 2.8 and 5.8 percent, respectively.

Private payers that sponsor Medicare Advantage (MA), managed Medicaid plans, or other public-private health plans have room to improve their LTSS to enhance healthcare outcomes for vulnerable beneficiaries by developing specialized benefits and contracting with expert LTSS providers.

The question remains: How can payers identify their primary LTTS beneficiaries and begin to tailor LTSS into high-quality benefit packages?

LTSS beneficiary demographics and relative costs

The AARP Public Policy Institute recently provided a breakdown of the most prominent LTSS demographics, which include a majority of elderly and disabled individuals.

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Eighteen million adults in the US require extensive LTSS to perform daily activities and 70 million adults have mild activity limitation that requires limited care intervention. Of adults requiring a significant form of these services, about 60 percent of these individuals are aged 65 or older.

AARP estimates that LTSS demand is expected to grow as more beneficiaries continue to live longer and develop a disability.

“On average, 52 percent of people who turn 65 today will develop a severe disability that will require LTSS at some point. The average duration of need, over a lifetime, is about two years,” AARP said.

LTSS is used in greater volumes in home and community-based settings (HBCS) than in nursing homes. Five million individuals under the age of 65 received LTSS in a HBCS instead of than in a nursing facility. On average, four million Medicaid beneficiaries also received LTSS in HBCS. Only 200,000 LTSS beneficiaries in the same age group received LTSS in nursing facilities.

Meanwhile, nearly 5.4 million older beneficiaries above the age of 65 receive LTSS in HBCS and 1.3 million beneficaries received services in nursing facilities. Approximately 3.6 million Medicare beneficiaries receive LTSS in HBCS.

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LTSS costs vary based on the institution where a beneficiary receives care. LTSS prices are usually higher in nursing facilities than HBCS.AARP found that the average annual cost of a private room in a nursing home cost $97,000 a year, while a shared room cost $82,000 annually.

The cost of a home health aide costs an average of $31,000 per year (based on a 30-hour work week and $20 hourly rate). Assisted living expenses are $46,000 a year on average and indirect costs of LTSS for unpaid caretakers averages $6954 per year.

What does an LTSS benefit package look like?

LTSS benefits need to provide beneficiaries with access to medical and mobility-assistance devices, nursing facilities, HCBS care, and care management experts.

Cigna HealthSpring, a Medicare Advantage (MA) plan, provides a general list of LTSS services available for beneficiaries that include medical and supplemental lifestyle benefits. The MA plan provides medical benefits, physical therapy, and emergency response services for LTSS members.

The payer also includes benefits such as home delivery and employment assistance that help members participate in community activities. Cigna’s LTSS benefit package focuses on services that address both the healthcare and day-to-day needs of LTSS patients.

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Aetna Better Health of Illinois provides Medicaid beneficiaries with LTSS benefits and specialized care management programs. Better Health beneficiaries can access HCBS services such as behavioral services, meal delivery, personal care assistance, and emergency home response along with medical benefits. These care managers can also evaluate if beneficiaries with minor LTSS needs can participate in self-directed care, which sets certain limits on care assistance.

BlueCross BlueShield of Texas also offers LTSS benefits for children with chronic or severe mental illnesses. Benefits including speech therapy, physical therapy, living assistance, and mental health case management supplement medical coverage for BCBS of Texas children.

How can payers design and customize LTSS to fit beneficiary needs?

Commercial payers may need more comprehensive care integration approaches in order to provide their beneficiaries with high-quality LTSS benefits that address unique care needs.  

Payers unsure of where to start can develop a LTSS checklist similar to the created by UMass Medical School. The checklist provides a series of best practices for providing LTSS such as integrating providers and social specialists into care teams, transitioning LTSS beneficiaries to new care settings, and developing clinical guidelines.

A sample of case studies from the Long-Term Quality Alliance (LTQA) highlight prominent examples of how commercial payers use LTSS best practices to combine medical, behavioral, and LTSS benefits into one specialized program.

Payers need to contract with provider organizations that have experience coordinating LTTS care and providing caregiver support for vulnerable beneficiary groups.

UnitedHealthcare, Amerigroup, and Humana have done so by providing their Medicare Advantage (MA) members with care from WellMed, a primary care organization that serves 300,000 MA patients.

WellMed provides an organized care coordination team of primary care providers, health coaches, and nurse practitioners to help administer LTSS. The team helps to improve the quality of care for beneficiaries by providing social support as well as medical benefits.

MA health plans that contract with WellMed provide capitated payments to cover the services of the organization’s care coordination teams. The integrated care coordination and social support teams helped WellMed improve patient outcomes and create high-quality healthcare experiences.

“This approach to quality has been successful,” LTQA said. “WellMed has very high rates of delivering preventive care while reducing hospital admissions, readmissions, and lengths of hospital stays within a complex patient population.”  

Payers may also need to create easily accessible LTSS access, so a member’s continuity of care is not interrupted. Providing accessible LTSS is actionable if payers contract with providers that have on-site care facilities in retirement homes or similar living areas.

Erickson Living, a group of retirement communities that also sponsor Medicare Advantage plans, integrated LTTS benefits into their retirement campus to create streamlined LTTS access.

Erickson’s MA health plans brings togethers medical centers, social services, home health centers, and outpatient therapy clinics within a single retirement campus. The integrated services allow multiple experts to address a beneficiary’s daily needs.

Campus residents enrolled in an Erickson Advantage plan are also provided with a nurse coordinator who communicates a resident’s needs to the campus’s integrated providers. In addition, Erickson members have access to medical centers for immediate healthcare needs. The medical centers provide same-day appointments, thirty-minute visits, and next-door proximity to patients. The integrated care design and benefits helped to lower patient rehospitalization rates down to 5 percent and earned five stars as an MA plan.

Integrated LTSS benefits that address specific beneficiary needs can create promising opportunities to contain LTSS spending, according to public payer results of similar benefit designs.

Maryland’s Community First Choice (CFC) program stabilized the cost of LTSS for dual-eligible Medicare and Medicaid beneficiaries while also reducing amount of day-to-day support beneficiaries required. The CFC reduced daily support requirements for beneficiaries by 22 hours from 2014 to 2016 through integrated medical and behavioral LTSS benefits.

Comprehensive LTSS benefit design may help payers provide beneficiaries with critical benefits without needing to increase LTSS costs. Combining medical and lifestyle benefits into one LTSS program will improve the effectiveness of long-term support benefits.


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