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CMS regulations enable MA plans to offer more incentives


New guidelines will spur a critical and fundamental shift to patient involvement

The Centers for Medicare and Medicaid Services (CMS) has announced new guidance to enable Medicare Advantage (MA) organizations to offer health-driven incentive programs that may be applied to an expanded list of health-related services and activities. MA organizations may now create programs that provide rewards and incentives to enrollees for participating in activities that improve health, prevent injuries and illness, and promote efficient use of healthcare resources.

“At the highest level, the new CMS regulations have expanded the scope of the rewards and incentives that currently may be offered to beneficiaries enrolled in Medicare Advantage plans,” says Tom Wicka, CEO of Novu, a technology and services platform designed to serve as an integrator between payer, provider and member.

Previously, these organizations were only able to incentivize and reward zero-cost screening and prevention measures.

“Moreover, the new regulations will, for the first time, allow MA organizations to define what completion and success look like for these programs,” Wicka says. “While they will be applicable to review by CMS, MA organizations will no longer need to be focused on simply the number of preventive screenings, but can look more broadly at what measures will move the needle for their organizations and their enrollees.”

Wicka believes this represents a critical and fundamental shift on the issue of patient involvement and understanding.

“It validates what we’ve been seeing in the commercial space for some time: that there is an important market recognition that small steps toward better health are necessary and can and should be rewarded if they activate enrollees in advancement of their health goals,” he says. “This is the beginning of outcome-based solutions that are offered directly to the member in government-sponsored programs. Clearly the five-star rating system is driving the need for results, but the expansion in the use of effective incentives to the MA member will only accelerate CMS desired outcomes.”



What it means for plans

These new regulations create a significant opportunity for managed care executives and the plans they represent, says Wicka.

“For the first time, they are able to reward activities not only for preventive care, but to cultivate a more holistic approach that looks at the way rewards-and the programs that can be built and tailored around these rewards-change behavior and activate enrollees over a broad spectrum of health and healthcare resource initiatives, as well as quality measures,” he says. “Rewards in combination with personalized programs, like smoking cessation or diabetes, and the support of a community [can generate progress].”

The new regulations are a complement to trends that are being seen in the broader healthcare system around member engagement and customer-centricity.

Managed care executives should be looking at the areas of their programs that will benefit most from engaging individuals in their care, according to Wicka. “If, for example, completion of screenings is going to impact a specific population in a positive way, there may be an opportunity to leverage the proven power of rewards and incentives to influence positive health outcomes,” he says.

There is a strong opportunity to leverage and connect the frequent engagement attained from rewards-driven programs to current initiatives, such as population health management and case management assets to fill gaps in the real-time information on enrollees or drive closure of specific care gaps, according to Wicka.

“For example, if executives are able to incent enrollees to participate in daily diabetes management activities, such as medication adherence, that data can inform case managers and their priority level on following up with a population or individual,” he says.

At the same time, executives must remember that incentive strategies do not need to be based on physical rewards, Wicka says.

“Executives should look at industries that have been doing this kind of engagement for decades-retail, financial services, airlines, etc.-and take a page from their playbook,” he says. “Strategies like gamification, social marketing and personalization can influence behavior in a rewards-based model without the need to spend large portions of budget on physical rewards.”


The following are four important takeaways to the new regulations: 

  • This is a major change in regulation policy and validation that rewarding wellness behaviors and activities leads to better health outcomes.

  • There is an opportunity here for (MA) organizations to leverage this new policy as a tool to engage members in advancement of better health outcomes. Smart MA organizations will use the new regulations to drive better health and quality metrics across the spectrum.

  • These programs have been used in commercial populations for many years now, and have had a significant impact on Medicare populations where the nuances of working with seniors can sometimes present challenges. In both commercial and government populations, rewards have been proven to influence the key behaviors and decisions that engage enrollees in their health.

  • Managed care organizations have an opportunity to create specific marketing campaigns to reach segments of their populations that they have not previously been able to reach or engage with.
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