Senate Finance Committee outlines policy options that affect traditional Medicare, Medicare Advantage, and ACOs

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By Michael J. Polakowski, Nicholas Johnson | 25 January 2016

This article summarizes the proposals released December 18, 2015, by the Senate Finance Committee. The proposals, if adopted, would have a wide-ranging impact on traditional Medicare, Medicare Advantage (MA), and Medicare accountable care organizations (ACOs) through changes to covered services, reimbursement structures, care delivery, and other changes. Affected stakeholders need to be aware of these potential changes. The committee is soliciting comments by January 26, 2016, at Stakeholders should read the Senate document in its entirety if there are particular policy options of interest to them.


On May 15, 2015, the U.S. Senate Committee on Finance announced the formation of a bipartisan chronic care working group (working group) to analyze current law, discuss alternative policy options, and develop bipartisan legislative solutions to improve chronic illness care. Interested stakeholders were invited to submit ideas to improve care for Medicare recipients with chronic conditions. The working group outlined three major goals that each proposed policy should strive to achieve within the framework that “any future legislation must realize savings or be budget neutral”:

1. The proposed policy increases care coordination among individual providers across care settings who are treating individuals living with chronic diseases;

2. The proposed policy streamlines Medicare’s current payment systems to incentivize the appropriate level of care for beneficiaries living with chronic diseases; and

3. The proposed policy facilitates the delivery of high-quality care, improves care transitions, produces stronger patient outcomes, increases program efficiency, and contributes to an overall effort that will reduce the growth in Medicare spending.

Of the hundreds of ideas submitted, the working group announced on December 18, 2015, the 24 policy options it will be further investigating.

Policy options

The proposals from the working group are outlined below.

Receiving high-quality care in the home

  • Expanding the Independence at Home (IAH) model of care – Under the current IAH demonstration program, which expires September 30, 2017, primary care physicians (PCP) and nurse practitioners provide home-based primary care to eligible Medicare beneficiaries. Providers receive fee-for-service (FFS) payments and are eligible for incentive payments based on quality and performance metrics. This proposal would make the IAH program permanent and expand it nationwide. The working group is also considering changing the IAH beneficiary qualification to be diagnosis-based rather than requiring prior hospitalization.
  • Expanding access to home hemodialysis therapy – Medicare requires home dialysis recipients to receive one clinical assessment per month. Beneficiaries are allowed to use telehealth for their clinical assessment only at limited authorized originating sites and only if the beneficiary resides in a rural area. This proposal would allow beneficiaries to have their monthly telehealth visits with their distant clinician at any free-standing renal dialysis facility, in any geographic area, including non-rural areas. The working group is also soliciting feedback on whether patients’ homes should be appropriate originating sites.

Advancing team-based care

  • Providing MA enrollees with hospice benefits – This proposal would allow hospice-eligible MA enrollees to stay fully enrolled in their MA plans. Currently, MA plans are only responsible for supplemental benefits for hospice-eligible enrollees and receive only a minimal payment from the Centers for Medicare and Medicaid Services (CMS). Traditional Medicare covers all hospice and palliative care costs. MA plans would assume full financial liability for hospice and palliative care costs and would receive an increased capitation payment (over current payments) for hospice-eligible members. In addition, the five-star quality measurement system would be updated to include hospice-based measurements.
  • Allowing end-stage renal disease (ESRD) beneficiaries to choose an MA plan – This proposal would allow newly Medicare-eligible ESRD beneficiaries to enroll in any MA plan regardless of when the enrollee developed ESRD. Medicare currently prohibits newly-diagnosed ESRD beneficiaries from enrolling in an MA plan, other than a few exceptions. The working group is soliciting comments on how ESRD MA capitation payments should be adjusted to reflect this change.
  • Providing continued access to MA special needs plans (SNPs) for vulnerable populations – This proposal would provide a long-term or permanent extension to the SNP authorization, which is currently authorized through 2018. The working group is also considering a requirement of full Medicare and Medicaid integration for any dual-eligible SNP (D-SNP) and additional benefit flexibility for chronic disease SNPs (C-SNPs).
  • Improving care management services for individuals with multiple chronic conditions – Beginning January 1, 2015, eligible providers are reimbursed an average of $50 per chronic care management service (subject to certain requirements). This proposal would provide an additional payment for managing conditions for patients with multiple chronic conditions (and enhanced payment above the current chronic care payment code). The working group is soliciting additional feedback on criteria for high severity, provider eligibility, and permanence of the program.
  • Addressing the need for behavioral health among chronically ill beneficiaries – The working group states a desire to assist patients with both behavioral health and chronic physical health conditions but does not provide any proposals. Instead, the working group requests specific policy proposals from stakeholders.

Expanding innovation and technology

  • Adapting benefits to meet the needs of chronically ill MA enrollees – This proposal would allow MA plans to offer additional benefits that are not currently allowed, related to the treatment of chronic conditions. It would also allow for a reduction in copays for chronic care benefits, the inclusion of additional providers and non-clinical professionals in provider networks, and offering wellness programs that target chronic conditions. The working group requests feedback on which MA plans and which chronic diseases should be eligible for the additional flexibility.
  • Expanding supplemental benefits to meet the needs of chronically ill MA enrollees – This proposal would allow MA plans to offer additional supplemental benefits (either medical or non-medical [e.g., social]) that would improve the health of patients with chronic conditions.
  • Increasing convenience for MA enrollees through telehealth – While telehealth services are currently permitted for MA plans, telehealth costs are largely included as a supplemental benefit. This proposal would allow MA plans to include additional telehealth costs as Medicare-covered costs for the purpose of MA bid development. The rationale behind the proposal is that telehealth technology is not necessarily an additional benefit, but an alternative mode of delivering mandatory benefits.
  • Providing ACOs the ability to expand use of telehealth – Similar to MA plans, MSSP ACOs may provide telehealth services, but the services are only paid for by Medicare in limited circumstances. For MSSP ACOs participating in the two-sided risk model, the working group is soliciting feedback on the geographic requirements as well as originating site requirements (e.g., whether a beneficiary’s home would be an eligible originating site).
  • Maintaining ACO flexibility to provide supplemental services – This proposal would clarify that MSSP ACOs may provide social services, transportation, and remote patient monitoring. Such services receive no reimbursement under traditional Medicare.
  • Expanding use of telehealth for individuals with stroke – Medicare currently pays a distant physician for telehealth consultation for beneficiaries presenting with stroke symptoms if the treating hospital is in a rural area. This proposal would eliminate the geographic restriction.

Identifying the chronically ill population and ways to improve quality

  • Ensuring accurate payment for chronically ill individuals – This proposal would update the CMS hierarchical condition category (HCC) risk score model to refine risk scores for chronically ill individuals with considerations for large numbers of chronic conditions, different Medicaid eligibility pathways, and both mental and physical ailments. The working group is also considering the use of multiple years of data for the HCC model or functional status as measured by activities of daily living (ADLs).
  • Providing flexibility for beneficiaries to be part of an ACO – Currently traditional Medicare beneficiaries may be automatically assigned to a Medicare Shared Savings Program (MSSP) ACO if their PCP is part of the ACO. This proposal would give Medicare fee-for-service beneficiaries the ability to voluntarily elect to be assigned to the ACO in which their main provider is participating. This proposal would also allow ACOs in MSSP Track One to choose whether beneficiaries are assigned to the ACO retrospectively or prospectively.
  • Developing quality measures for chronic conditions – This proposal would require CMS to develop quality measures specific to individuals with a chronic disease. Measures could include topics such as patient engagement, shared decision making, care coordination, end-of-life care, Alzheimer’s and dementia, and community level measures.

Empowering individuals and caregivers in care delivery

  • Encouraging beneficiary use of chronic care management services – Beginning January 1, 2015, CMS established a chronic care management payment code to reimburse providers for care management plans for Medicare beneficiaries. This proposal would eliminate any cost sharing to the member for such services as well as any cost sharing for the proposed high-severity chronic care code discussed earlier.
  • Establishing a one-time visit code post initial diagnosis of Alzheimer’s/dementia or other serious or life-threatening illness – Currently there is no payment code to compensate providers for a one-time visit to discuss the diagnosis of a serious illness. This proposal would establish a code for a visit to discuss diagnosis, treatment options, and resources for the patient.
  • Eliminating barriers to care coordination under ACOs – This proposal would allow ACOs in two-sided risk models to waive cost sharing for Medicare members for services that treat a chronic disease with the expectation that members will be more likely to receive treatment if the treatment is free.
  • Expanding access to prediabetes education – This proposal would establish a Medicare-covered benefit to educate members at risk of developing diabetes on how to reduce their risk of developing the disease. It would also expand the list of providers eligible to provide such training.
  • Expanding access to digital coaching – This proposal would require the website to provide additional educational materials on health conditions and self-management of health conditions.

Other policies

  • Increasing transparency at the Center for Medicare and Medicaid Innovation (CMMI) – The CMMI tests alternative payment and delivery models with the intention of improving care quality, coordination, and efficiency of healthcare. This proposal would require the CMMI program to collect public comments prior to implementing any initiatives that affect a significant amount of Medicare spending, which the CMMI is not currently mandated to do.
  • Study on medication synchronization – The working group is considering requiring a study of how issuing prescriptions to a beneficiary could be better coordinated with the intention that a beneficiary receiving multiple prescriptions will receive better counseling from the prescribing pharmacist.
  • Study on obesity drugs – This proposal would require a study to be completed on obesity drugs in order to understand the effectiveness and impact by population. Obesity drugs are not currently covered under Medicare Part D except as a supplemental benefit in some Medicare Advantage-prescription drug (MA-PD) plans.


The above proposals, if adopted, would have a wide-ranging impact on traditional Medicare, Medicare Advantage, and Medicare ACO stakeholders through changes to covered services, reimbursement structures, care delivery, and other changes. Because these policies are under consideration, the working group is requesting feedback and comments through January 26, 2016, at The submission process is detailed in the full release document.

1United States Senate Committee on Finance (December 18, 2015). Hatch, Wyden, Isakson, Warner Release Chronic Care Options Paper. Press release, accessed January 11, 2016, at

2United States Senate Committee on Finance (May 22, 2015). Letter to stakeholders, accessed January 11, 2016, at