Episode 32: Flex cards and SSBCI changes under the 2027 MA Final Rule

In this episode of RISE Radio, we share an excerpt from the April 29 RISE webinar featuring Ana Handshuh, principal at CAT5 Strategies, and Melissa Smith, founder of Newton Smith Group, as they walk through the 2027 Medicare Advantage Final Rule.

This episode focuses on what Medicare Advantage plans need to know about flex card and Special Supplemental Benefits for the Chronically Ill (SSBCI) changes, including: 

• Codified flex card and debit card disclosures for benefits, conditions, and limitations
• Alternate pathways when members cannot use the card due to technical or non-technical barriers
• SSBCI determinations that require both chronic illness criteria and benefit-level health impact rationale
• Publicly posted eligibility criteria and the operational labor required ahead of January 1, 2027

To listen to the entire 75-minute webinar, including their deep dive into the Star ratings redesign, click here or visit risehealth.org to access our webinar library.

Transcript

Ilene MacDonald, host 0:10

Hello, welcome to RISE Radio. I'm Ilene MacDonald, the editorial director of RISE. Today I'm excited to introduce this special episode, an excerpt from the recent RISE webinar on the Medicare Advantage 2027 Final Rule and Rate Notice. In this 20-minute episode, speakers A na Handshuh and Melissa Smith discuss the codified changes for flex cards and SSBCI requirements. To hear the entire 75-minute webinar, including their deep dive into the Star Ratings redesign, head to our RiseHealth.org website to access our webinar library. I've also provided a link to the webinar in the show notes. And now I'll hand it over to Ana and Melissa.

Ana Handshuh, speaker 0:52

All right. Well, welcome everyone. We're Melissa Smith and Ana Hanshuh and we're partnering with RISE for today's session, the What and the How for Medicare Advantage. We're going to be talking about the 2027 Final Rule, Rate Pressure, and Strategic Imperatives for Health Plans. So as many of you know, RISE works very closely with Medicare Advantage leaders year-round on these exact challenges that we're going to be talking about today. And our focus is really going to be cutting through all of that noise and helping teams that are here with us today understand what to do next. So without further ado, Melissa, why don't we start with some intros? Why don't you go first and then we'll dive right in?

Melissa Smith, speaker 1:35

Awesome. Thanks, friends. We're so glad that everybody took a few minutes to join us today. As Ana said, my name is Melissa Smith. I have been working in Medicare Advantage since 2008. I'm a former health plan operator, turned consultant, and have been in the consulting environment mostly in Medicare Advantage for the last 11 years. So a lot of what we do together, both Ana and I, and with a lot of you on the line, is we we help you all bring life to policies and regulatory changes. And that's what we're going to spend the next hour digging into. I'm really excited to spend the hour. Ana, how about you? A quick introduction.

Flex Card Rules Get Codified

Ana Handshuh, speaker 2:12

Hi everyone, I'm Ana Handshuh. I've also been a health plan operator and have been in consulting for the past 15 years or so. So, like Melissa, we've both been the first Star Tsar at our organizations and really worked in different departments, operationalizing all of the different imperatives that we must do in order to be successful in MA. So really excited to dive into the final rule and the changes that were announced in the rate announcement. We've been getting lots of questions from health plans around the country, and we thought we'd bring some of those to you today and discuss what are the hot and pressing issues that people are asking us about and what we've been advising folks to do. So thanks for coming. Buckle your seat belts and let's get going.

Melissa Smith, speaker 3:04

Let's talk about Flex Card Changes Codified and the SSBCI changes codified. So, again, we've touched on the bombshell. The bombshell is a complete overhaul of Star ratings, and we really wanted to tackle that first. If we have time for more questions at the wrap-up, we will still take more Stars questions because we know that all of you still have questions. The other two pieces of technically rich change in the final rule anchored around flex card or debit card administration with a heavy emphasis on codification and regulatory oversight, and SSBCIs. Now, a lot of folks have used debit cards over recent years. And what I put at the top of this slide is the specific action that CMS took in the final rule because they made some changes from the proposal, and we just what we decided to do is not worry about what they proposed, just talk about what they finalized. In this final rule, as you can see on my screen, CMS finalized requirements for active, detailed disclosure of all of the provisions around your flex cards and debit cards. What this includes all of the benefits that you are making accessible through debit cards or flex cards. It includes all of the conditions and the limitations a beneficiary or a member has to go through to be able to access the benefits that you're loading on a member's flex card. And just as important is the technical regulatory language offering deep, broad, expanded alternatives when your members can't get those benefits through the flex card. So I'm gonna try to tell the story with casual laypersons speak, and then Ana's a certified compliance expert, I'm gonna let Ana come back and add a regulatory spin behind my layperson's interpretation. So what we tried to do, what we tried to do in these two columns, since we know a lot of you guys have to report back to executives, and the executives often say, don't give me 50 pages of regulations, give me three bullets or three slides. We try to like bubble the stuff down into like digestible chunks that you can use after this webinar in order to communicate what you're hearing. This this codifies a mandate. CMS' codification reminds us that when we're offering supplemental benefits, even when our vendor struggles, we have to have a logical pathway for the beneficiary to get the supplemental benefits they are entitled to, even if our business decisions and vendor partners have a hiccup. And I'll use that word hiccup because it's almost always a hiccup. It's almost never a catastrophic failure of ours or a vendor. It's usually digital connectivity issues, or it's access for members in rural communities or members who have no internet access and need an alternate pathway to get the benefits that we chose to administer in their debit cards. Now again, the layperson importance of the words in the final rule are very clear. CMS is aware some of our problems are because we have members without internet. We have members without digital cell phones, we have members without computers, we have members who don't care that they don't have those things. CMS' reminder is that even when it's the beneficiary's problem adapting to what we as reasonable business people have built, we have to have the alternate pathway available to service the federal taxpaying beneficiaries' access to the benefits we filed in our legally binding bid. Now, a couple reminders, and then Ana, I'm gonna flip it over to you to talk compliance. Couple of reminders are super important. One of the most important reminders that I saw about the flex cards is the reminder for PPOs in particular. So the entire structure of a PPO is anchored on aggressive, some would call it egregious, flexibility in the network of providers and pharmacies that a beneficiary has to choose from. For our PPO friends, our friends on the line who are offering PPOs, they have reminded us that the structure of a PPO applies to the benefits you may choose to load onto a debit card. So that that reminder is carefully woven in here. So the the use of the debit card has to be just one method by which a PPO gives that beneficiary, no matter who your vendors have in their network, the beneficiary has free choice of any source of the product if they're enrolled in a PPO. It all they also are reminded plans, we've got to get those debit card transactions listed in EOBs. They are benefits. They're not goodies, they're not giveaways, they're not marketing ploys, they're not games. You can see I'm kind of talking about the elephant in the room. They are administrated benefits that need to make it to the EOB. So, Ana, I've tried to do my layperson's interpretation. Maybe I can flip it back to you and we can talk just a few minutes about from a compliance perspective, some of the things that jumped out at you as a certified compliance officer. Maybe a little perspective color context here.

Compliance Reality Reimbursements And Data

Ana Handshuh, speaker 9:28

Yeah, so let's talk about from a practical perspective how you should be looking at this. So, first of all, CMS has has been talking about these requirements for a really long time, um, especially if you look at chapter four of the Medicare Managed the Medicare Managed Care Manual, benefits and beneficiary protections. They really talk about when you're administering via a flex card, and really they talk about it in an OTC context. But now, since then, we've expanded the use of flex cards to many other benefits, but they talk about what protections must be provided to the beneficiary. They codified that, but they went beyond that. So outside of the PPO setting, what they're telling plans that they must do is provide reimbursement, even in any circumstance that the member is unable to use the card, including circumstances that really have nothing to do with the card malfunctioning or it's not working at the retailer, including things like the member has trouble understanding or any other non-technical obstacle that the member may run into, they are asking plans to have reimbursement mechanisms to ensure that the member, if they pay out of pocket for a coverable item, that if it's in the if it's coverable because they have it in their left in their allowance, that the plan reimburse. And that means that you're going to have to have very important conversations about your vendor's ability, who's gonna take on that responsibility. You need to have those conversations today, right? Who is gonna take on that responsibility of reimbursing the member? Is it gonna be the vendor? Is it gonna be you? If it's going to be you, how are you gonna deduct that from the vendor's records of allotment? So, really important things. And remember, when you, you know, so somebody has to watch, you know, like look at the receipt and say, these are the coverable items, right? Because if there's cigarettes and bananas, how do we pay for the bananas and not pay for the cigarettes, for example, right? And so those are all important things to think about. How will you handle those reimbursements that get denied in the context of your utilization management process and your potential for appeals process? So all of these policies and procedures need to be thought through, really important stuff. Um, the other thing I want to double-click on that you mentioned was that the credit card transactions must be in the explanation of benefits. So typically, plans have been excluding these because the vendors are not able to provide reporting. This is the same type of reporting that plans would use to submit their encounter data, to submit their Part C required reporting data about supplemental benefits. That's the level of data that CMS is looking for. If you go back and you watch the CMS had a QA webinar related to the submission of encounter data, when they put out those encounter data requirements. And they recently, this January, they put out they put out some additional information answering QA about that. One of the things that you'll notice is CMS says, figure it out. So there are commenters and commenters saying our retailers don't have the ability to show us returns at the transaction level. Our retailers don't have the ability to give us exactly the encounter data that we're looking for, or our vendor doesn't have that capability. CMS was really clear in this final rule, and they basically said if you don't have the ability to do it, a flex card may not be the way to administer that benefit. So really important to think about making sure that you're having conversations with vendors. Many do have the capability. Many are able to meet these needs or mostly meet these needs. So really important because CMS has basically told us to figure it out and to administer the benefit in the way that they codified it. So very important from a practical perspective and a compliance perspective as well.

PPO Flexibility And EOB Requirements

Melissa Smith, speaker 14:17

For sure. Okay, Ana, I'm gonna hit on two questions and then I'm gonna turn it over to you to talk about SSB CI since it's an extremely big deal. So two great short questions. One is whether those rules apply to OTC flex cards. Yes. Um, that is actually the genesis, as Ana alluded. This is this is an oversight of flex cards since it's kind of been a free-for-all in the flex card space. OTC flex cards alone are subject to this. Another great question was whether requirements also apply to fitness benefit reimbursements. Sorry, fitness benefit reimbursements flowing through debit cards. Yes. If you are offering fitness benefits and a PPO and you're administering them through your flex cards, the fact that you've picked a vendor with a narrow network, but you're a PPO, that's the assignment at hand is find the solution that you sold to your PPO beneficiary that they do not have the binding nature of an HMO network because they chose a PPO. Again, like Ana said, a lot of vendors have a lot of workarounds. It probably is not cost neutral, but this is why CMS gives us the final rule with plenty of time before our bids go in, so that if we are working on bids using historical year-over-year similarity approach, we have plenty of time to go back to the bid team and say we are not well suited to include benefit A or benefit B, or we are well, we're not well suited and we want to pull it out. We are not well suited, we want to change it, or we want to adjust things based on this final rule. So that again, we've we had a six-week notice. CMS knows that all of our bid teams have adjustments to make in response to this final rule.

Ana Handshuh, speaker 16:04

Find vendors that can do this work, right? In essence, find vendors that can do this work. But yeah, cannot emphasize enough CMS' reminders to PPOs. If it's a cover benefit, you must also be able to cover it at a network.

Melissa Smith, speaker 16:16

Yeah. Yep. Okay, so time check, Ana. We've got 13 minutes. If you can't tell, I mean, we we can do this all day long. And when Ana and I are together in in RISE events, this is what we do is we literally go deep into as many rabbit holes as we can. I hate that we only have 13 minutes left, but Ana, I'm gonna hand it over to you to take us through SSB CIs, which I'm sure will take at least 10 of those 13.

SSBCI Eligibility Tests Get Tightened

Ana Handshuh, speaker 16:39

Okay, so we'll try to things. So let let's go to SSBCI because here's where we find some of the biggest additional burdens. And I call them additional burdens because CMS called them clarifications and they reminded plans that they have always thought about this, these requirements in this way that they are telling us. Um, but they also acknowledge that they are clarifying because they realize that plans were not clear on what the requirements were. And um, so the main thing is that CMS reminded plans that two things must be true in order to provide SSBCI to any particular enrollee, and that plans must make that determination about those two things, they must make that determination independently as it applies to each enrollee. So, what are the two things? Thing one is that the member meets the test of being a chronically ill enrollee. There are three factors to this test to be considered a chronically ill enrollee. One is that they have a chronic condition as accepted by CMS, right? They call it a chronic condition that is life-threatening or restricts function. Two, that they have a high risk of hospitalization or adverse health outcomes. And the third thing is that the person requires intensive care coordination. That three-prong test is thing one that you have to evaluate for each enrollee. What is thing two? Thing two is that every enrollee, for every enrollee, you have to prove that that particular benefit item or service that is an SSBCI, that that particular thing is going has a reasonable expectation of improving or maintaining the enrollee's health. So that is not a small order, right? Like before, for those of us that were using, let's say, an HRA to establish the individual had the chronic condition, guess what that did? That only established that the individual had factor one of the first tests. Then we needed to establish that they had a higher likelihood of going to the hospital or having an adverse health outcome. We also had to establish that they needed a higher level of care coordination or intensive care coordination. And then we had to establish that this thing, this SSBCI benefit is gonna help this person. So CMS said you have to have criteria for establishing all of these things. What sources of information are gonna be acceptable to you? How are you gonna make this determination? How are you gonna document? And you have to put all of this criteria in a publicly available place. You have to post it, the eligibility criteria, and you can't change it willy-nilly during the year. So for each benefit that you have, even if you have a combined wallet in your flex card that includes pest control and utilities and food and produce, even if you have all those things, you have to establish that test for each of those benefits. Okay. The other thing CMS reminded is that social determinants of health alone, so LIS, that can't be the sole determining factors. So again, you have to objectively determine for each beneficiary, but also for each benefit and all of those tests that I just talking about, was just talking about, because having the chronic condition by itself is not enough. The other thing is checking a box, asking the beneficiary, do you have diabetes or are you eligible for the food card? That does not fly. They mentioned instances over and over of plans doing that. That is not okay. So really important. What else, Melissa, am I missing here?

Melissa Smith, speaker 21:08

The one thing I would say is that I don't think you're missing it, Ana, as always. I think it's worth pausing and somberly talking about the increased labor that will be necessary to bring this to life. This will take effect on 1.1 of 2027, just while we're getting ready for CAPS season. So, as Ana said, many, many plans have been just awarding these benefits as soon as they have evidence that the member meets the criteria of the chronic illness existence without the extra step. We do not have time today to show you in detail the operational rigors that will have to be implemented in order to do this. But in our deck, you can take a screen grab of this. Page 332 of the final rule has actually two excellent examples of the specific operating processes that you will have to adhere to in order to be able to administer SSB CIs. It will be laborious. There's no way around it. CMS has told us that in the verbiage. It will be different. So when your members see the SSB CIs and are ready to access them just while you're trying to optimize caps, CMS is aware it's going to require you to have an active dialogue with the member. Can be an HRA. There's a lot of ways to do this work. You can kind of see it will have to be an active dialogue that may slow their access just as you're wanting that survey in place. So again, I feel like we're like re-reiterating and double-clicking on the same words. This is the time to get started redesigning those processes because this is being put forth once CMS realized that plans were just handing out SSBCIs inconsistently with the verbiage. They plan to regulate this and oversight this. And we should very much expect compliance audits and notices of noncompliance soon after this goes into effect based on the specifics they've given us. No small feat, I would say, Ana. Would you agree?

Ana Handshuh, speaker 23:29

Yeah, absolutely. And the EOB transaction, someone's asking here if for FlexCard, does it apply just to PPO plans or all MA plans? And it applies to all MA plans. And someone was asking, like, when did this happen? You know, when, you know, they're reminding us, but when did this happen? I believe back to 2016, 10 years ago was when they started giving us rules about what must be included in the explanation of benefits for part C. They had a whole section and QA around that, if I recall correctly, so I'm aging myself here, but I do think it was like 10 years ago when they said you must include these benefits as well.

Where To Hear The Full Webinar

Melissa Smith, speaker 24:12

Yeah. Again, not new. The I feel like we should go back, Ana, tomorrow and do a word count on the number of times the word remind shows up in that final notice. Most of this was not new. Verify, remind. Yep. And again, the message for us whether you're new to MA or whether you've been in MA a long time, the message to us in the operational community is that CMS has matured in ways that we we matured years before they did, and they're maturing and catching up to a lot of the things that we've been doing.

Ilene MacDonald, host 24:44

We hope you enjoyed this excerpt from the April 29th webinar, The What and the How for Medicare Advantage 2027 Final Rule, Rate Pressure, and Strategic Imperatives for Health Plans. To listen to the entire 75 minute webinar, visit risehealth.org to access our webinar library. A link is also included in the show notes.