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Big Changes to Medicare Advantage Rewards & Incentives Regulations in 2022

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Health equity is a top priority for most healthcare delivery organizations, with 58% of health professionals citing this as number one among six priorities. According to a July 2021 poll conducted by the Institute for Healthcare Improvement (IHI), the only area that edged out health equity was safety at just one point higher.

When healthcare professionals were asked to rank these priorities in 2019, only 25% indicated that health equity was top of mind. This demonstrates a seismic shift in priorities in just two years.

Not only is committing to health equity the right thing to do, but it’s also becoming a requirement with CMS already updating policies to reduce discrimination and increase compliance and regulatory oversight.

Increasing Equitable Access to Healthcare

By escalating information regarding “alignment with Executive Order 13985” to the first page of the 2022 CMS Medicare Advantage Readiness Checklist, the administration emphatically and clearly reminds us that advancing racial equity and supporting underserved communities is a key priority at the highest levels of our government. This comes despite the unfortunate reality that most Medicare Advantage (MA) plans don't gather race and ethnicity data about their members regularly.

The 2022 regulatory structure for Rewards & Incentives (R&I) in MA plans—which represents the first major changes since 2014—will push MA plans toward greater equity across their populations and reduce activities that contribute to unintentional discrimination.

Although previous rules led to loose interpretations of qualifying individuals and allowable rewards, the new compliance standards are clearly defined and are likely to be accompanied by more stringent oversight:

  • MA plans must offer rewards uniformly and without discrimination to all enrollees who qualify for the incentivized service (i.e., all Qualifying Individuals)
  • Prohibits Amazon gift cards and unrestricted debit/reloadable cards
  • Clarifies that disputes regarding R&I in MA are Grievances, which must be handled in compliance with Section 30 of the Medicare Managed Care Manual
  • Formalizes that noncompliance with CMS R&I program requirements may result in sanctions.

Defining Qualifying Individuals & Uniformity

In order to implement R&I programs equitably, new regulations do not allow the use of HEDIS® denominators and/or numerator status as the eligibility criteria to qualify for and/or earn rewards in MA. This is because qualifying individuals could be missed when plans use this methodology, which would be considered discriminatory or manipulative:

  • Plans are required to offer the same reward for all qualifying individuals (not just those with a HEDIS gap)
  • Qualifying individuals are those for which the service would be a covered benefit during the benefit year (You must offer the same reward to those who qualify, such as men for whom mammograms are medically required.)
  • The reward must be offered to all qualifying individuals, but you are allowed to send follow-up communications to segments of qualifying enrollees
  • You must communicate the availability of the rewards to ALL qualifying individuals and provide equitable opportunity to sign up and access the rewards
Breast Cancer Screening example for new rewards regulations in Medicare Advantage

Defining Allowable Rewards & Incentives

Expanding on the earlier point regarding changes in incentive offerings, here’s a quick rundown of what rewards are allowed and disallowed:

Allowed

Not Allowed

  • Reasonably priced and appropriate merchandise (e.g., fitness watches, activity trackers, weight scales, kitchen items, other wellness products)
  • Approved gift cards without restrictions (typically includes restaurants, movie theaters, book stores, etc.)
  • Approved gift cards with restrictions (may include retailers like Walmart and Target but with exclusions for items such as alcohol, tobacco, and firearms)
  • Approved debit cards with restrictions to specific retailers or categories (e.g., grocers) may be permissible 
  • Non-allowed gift cards (including Amazon)
  • Unrestricted gift cards, debit, and reloadable cards (including Visa, or MasterCard)

 

Serve Your Members & Protect Your Organization

As an MA plan provider, you want to empower your members to make healthy choices for better living. Expanding outreach to more members will help ensure that the right members are getting the right care at the right time, while your organization also avoids sanctions from CMS.

With the new regulations set to go into effect on 1/1/2022, plans that are currently using only HEDIS data to define incentive eligibility need to act quickly to develop a strategy to address the data challenges. In addition, plans must ensure that the rewards they offer are both compliant with CMS regulations and appealing to their members.

The Right Data Makes the Difference

According to the previously-mentioned IHI survey, inconsistent collection of equity-related patient data and lack of resources (such as staffing) tied for the top barrier to implementing more equitable healthcare delivery. Gathering and optimizing the right data will be a major undertaking for many plans’ current infrastructure.

A successful strategy will utilize sophisticated data aggregation and analysis that includes not just member information and HEDIS care gaps but also incorporates other datasets that will lead to more equitable outreach for preventive care and other health improvement actions that can be incentivized.

Choosing Reward Offerings & Fulfillment

In addition to identifying and reaching out to a comprehensive set of qualifying individuals, it’s crucial to offer incentives and rewards that will motivate members to take the desired action. While some vendors have only a limited selection of rewards (which may include options that will no longer be allowed), others provide a wide range for your members to choose from.

And because many plans want to support regional—or even local—businesses, you’ll want to consider an experienced rewards partner that can integrate customized incentives. But it’s not just about the gift cards and merchandise selection. It’s also important to choose a vendor that has demonstrated expertise in carrying out fulfillment in a way that delights your members.

Time is of The Essence

Since these new rules will impact MY2022 Stars Ratings, it’s imperative that you develop (or finalize) your strategy now, so you can feel confident that your program is compliant with the newest CMS regulations around R&I. To help you navigate these new regulations, we’ve compiled some of the most common FAQs that Healthmine has received into a downloadable handout.

Download the FAQ on new rewards and incentives regulations from CMS

If you have additional questions or would like to learn more about Healthmine’s CMS-compliant member engagements and rewards solution, don't hesitate to reach out to the experts at Healthmine.

As Senior Director of Government Programs, James ensures that Healthmine’s solutions have a strong positive impact on performance by acting as a subject matter expert on government programs including Medicare Advantage, Medicaid, and ACA/Commercial. A forever-learner and thorough researcher, James is the go-to resource for what’s up and coming in the healthcare space. He is passionate about leveraging technology and advanced analytics to engage members in their health.

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