Developing Winning Supplemental Benefits Packages

Supplemental benefits are services offered by health plans that are not included as part of the standard medical or pharmacy benefit. What plans are allowed to offer and choose to cover varies by line of business and market. Some of the most common examples include dental, hearing, vision and over-the-counter drug reimbursement. Supplemental benefits provide access to a variety of services that help improve health and quality of life and lower out-of-pocket costs.

In this article, leaders from member organizations of the Managed Care Resource Alliance (MCRA) discuss how health plan leaders can develop benefit packages that include supplemental benefits that resonate with various demographics.

Know your members and markets

It is critical that health plan leaders understand the members, markets, and geographies they serve. Broadly speaking, for each line of business, plans need to recognize the demographics of their current populations and target populations, as well as the clinical profiles and health-related social needs of all the subgroups within their membership to effectively tailor their benefits to the target population. Further, understanding member preferences is key to ensuring that the benefits offered will best meet members’ needs.

Competitor dynamics also affect a health plan’s supplemental benefits strategy, as it may inform which benefits offerings will maintain competitiveness or highlight areas to stand out as an innovator in the market.

Establish your goals

Eric Levine, M.P.H.

Supplemental benefits can serve a variety of functions for health plans. Eric Levine, M.P.H., from Avalere Health notes, “A strong supplemental benefits strategy starts with clearly defined goals that are aligned with the plan’s overall business strategy and membership needs.” For example, a health plan may use supplemental benefits as a lever for improvement of health outcomes or quality of care. A health plan may also use supplemental benefits offerings to support member satisfaction and retention of current members or to incentivize growth in new membership.

Certain lines of business may have more specific goals. In Medicaid, a plan may use supplemental benefits programs to demonstrate alignment to state Medicaid agency priorities. In the employer-sponsored market, a plan may use supplemental benefits to align with the plan sponsor’s goals of employee satisfaction.

Levine notes, “The goals do not have to be mutually exclusive, but they have to be clearly defined to provide a framework against which to make decisions.”

Identify vendor partners

Once the plan develops its strategy, it must find partners to help execute and deliver those benefits. Having the right vendor partner to provide the benefits to the members is just as important as the strategy itself. There are a few guiding principles health plans can take when evaluating and selecting vendors.

Vendors should serve both the health plan and its members. For the plan, the vendor should be easy to work with, integrating with the plan’s systems and reporting tools and working with the plan to eliminate barriers to implementation. When responding to client requests, vendors should be responsive to both the health plan as well as members. Plans also benefit from economies of scale and efficiencies by partnering with vendors that operate across multiple lines of business or geographies, or those who provide multiple supplemental benefit types to members.

Mark Tepper

Mark Tepper from TPS Solutions notes, “As CMS Medicare Advantage rules prohibit certain payment types, filtered spend card technology can solve the problem of appropriate fund usage in healthcare using prepaid cards that can restrict usage to only allow the purchase of healthy and over-the-counter products. At the same time, it can include member desirable rewards identified by the plan. We’ve seen an increase in interest from our health plan clients in this one-stop-shop solution because it hits a number of goals; it supports compliance, aligns to their quality program goals, and supports member satisfaction.”

Plans can see benefits from vendors who operate locally and know the communities and members they serve. This is a particular benefit in the Medicaid program, where plans may be highlighting programs in their request for proposals as part of procurement and re-procurement.

Finally, vendors must provide demonstrable returns on investment for health plans and value for members.

Integrate benefits across lines of business

Plans can be the most successful when integrating benefits across lines of business to support members across their journey. This continuity provides support to members who transition between programs (e.g., from commercial coverage to Medicare Advantage or from Medicaid to an ACA Exchange plan).

Spike Cheever

Spike Cheever from Evolve notes, “Not all benefits in one program are feasible to complete in another. Plus, not all vendors are qualified to help other population types. One example we’ve witnessed is a growing need for home modifications in healthcare, and we’ve seen many Medicare Advantage plans attempt to integrate the same vendor into Medicaid without success. The model for Medicare Advantage usually doesn’t work with Medicaid, but the model for Medicaid is more easily adaptable for Medicare Advantage. Therefore, a health plan can have a singular source for services across multiple product lines, but how to get to that solution might appear unconventional.”

Measure results

Plans should continuously monitor their supplemental benefits programs and review results as part of the strategic planning process. To do this, plans need to receive information such as utilization and engagement of the benefits from their vendors. Plans should also evaluate the impact supplemental benefits have on medical and pharmacy spending. Including this data in the strategic planning process allows plans to continuously evaluate their approaches and ensure their stated goals are met.

Conclusion

As health plans continue to face financial pressures, it is even more important to have supplemental benefit strategies that facilitate their success. Plans must take a strategic, measured approach to identifying benefits that appeal to their members and prospective members, support their health needs, and deliver high-quality services.

Eric Levine is an associate principal at Avalere Health. Mark Tepper is the CEO of TPS Payments. Spike Cheever is the president of Evolve.