Executive Summary

The 2016 Medicare Physician Fee Schedule (MPFS) Rule requires dentists participating in dental networks providing supplemental benefits for Medicare Advantage plans (MA) to register with the Centers for Medicare & Medicaid (CMS) using the 855i form, beginning in 2019. Based on its members’ experience assisting dentists with completing the 855o form to order/prescribe under Medicare Part D, the National Association of Dental Plans (NADP) anticipates that the new requirement will deter a significant number of dentists from participating in MA.

 NADP asked Avalere to estimate the increase in Medicare program costs under current regulation under three participation scenarios: 1) high impact, where the majority of dentists stop participating in MA; 2) medium impact, where the one-third of dentists that currently participate continue to participate; and 3) low impact, where up to 70% of dentists participating in MA networks register over five years.

 A growing body of research shows, as discussed in this report, that access to dental treatment increases overall health and decreases the cost of care for patients with periodontal disease, particularly for those with certain chronic conditions.1 A substantial decrease in dentists’ participation in MA may cause overall costs for the program to increase, as some beneficiaries would lose access to dental services. Using data from the 2017 Medicare Trustees Report, the Medicare Current Beneficiary Survey (MCBS), the Congressional Budget Office (CBO), and literature review findings, we calculated the increase in program costs associated with a loss of dental care access for beneficiaries in MA with three chronic conditions worsened by periodontal disease; diabetes, stroke, and heart disease. Overall, Avalere estimates the total cost to the MA program from 2019 – 2028 to be between $38 billion and $165 billion.

 Table 1: Estimated Impact on Medicare Advantage Beneficiary Spending Due to Reductions in Dental Provider Participation (in Billions)

1 ”Evidence of the Link between Periodontal Disease and Chronic Condition.” Memo from Avalere Health to Pacific Dental Services dated June 8, 2015.

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Background

 Access to dental services improves overall health and can reduce healthcare costs. In particular, proactive treatment of periodontal diseases may decrease the need for expensive medical interventions.

2 Periodontal diseases occur when bacteria and plaque accumulate on or underneath the gums, causing inflammation and infection. On its own, periodontal disease can damage bone and connective tissue in the mouth. When combined with certain chronic conditions, including diabetes, heart disease, and stroke, periodontal disease may contribute to even more serious and costly health complications.

3 For example, a study found that seniors with periodontal disease are 44% more likely to also have cardiovascular disease and patients with diabetes and periodontal disease have a 3.2 times greater risk of mortality.

4.Currently, more than one-half of Americans age 30 or older and 66% of adults 65 and above have periodontal diseases.5,6 While traditional fee-for-service Medicare does not typically cover dental care, 68% of MA plans offer dental coverage as a supplemental benefit. As of 2017, 63% of MA beneficiaries are enrolled in plans that offer access to dental coverage.7 Additionally, 29.4% of MA beneficiaries have access to periodontal treatment.8

5,6 While traditional fee-for-service Medicare does not typically cover dental care, 68% of MA plans offer dental coverage as a supplemental benefit. As of 2017, 63% of MA beneficiaries are enrolled in plans that offer access to dental coverage.7 Additionally, 29.4% of MA beneficiaries have access to periodontal treatment.8

7 Additionally, 29.4% of MA beneficiaries have access to periodontal treatment.8

Enrollment in MA is projected to grow to 41% of total Medicare enrollment by 2027, which could increase the number of seniors with access to dental services over the next 10 years. However, upcoming changes to the registration process for dentists participating in MA may result in fewer participating dentists and, consequently, reduce access for beneficiaries and increase costs for the MA program.

Effective January 1, 2019, dentists providing services through MA are required to register with Medicare and complete the CMS 855i form. Networks of dentists must be finalized before MA plans can price the dental supplement. Dental carriers typically report their benefit structures and rates for the following year to MA plans by March of the year prior to the offering (e.g., by March 2018 for January 1, 2019, MA plan effective dates). To accurately report network size prior to pricing supplemental dental plans, education and dentist sign-ups using the 855i form must occur within a six-month window prior to March 2018.

 2 ”Evidence of the Link between Periodontal Disease and Chronic Condition.” Memo from Avalere Health to Pacific Dental Services dated June 8, 2015.

3 Vedin, Ola, Emil Hagstom, Dianne Gallup, Megan L. Neely, Ralph Stewart, Wolfgang Koenig, Andrzej Budaj et al. “Periodontal Diseases in Patients with Chronic Coronary Heart Disease: Prevalence and Association with Cardiovascular Risk Factors.” European Journal of Preventive Cardiology 22, no. 6 (2015): 771-778

4 Janket SJ, Baird AE, Chuang SK, Jones JA. Meta-analysis of periodontal disease and risk of coronary heart disease and stroke. Oral Surg Oral Med Oral Pathol Oral Radiol Endod. 2003;95:559–69.

5 Eke PI, Dye BA, Wei L, et al. Update on the prevalence of periodontitis in adults in the United States: NHANES 2009 to 2012. J Periodontal 2015;86(5):611-22.

6 Eke PI, Dye BA, Wei L, Slade GD, Thornton-Evans GO, Borgnakke WS, Taylor GW, Page RC, Beck JD, Genco RJ. “Update on Prevalence of Periodontitis in Adults in the United States: NHANES 2009 to 2012.” Journal of Periodontology: 611-22.

7 Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services. The analysis uses enrollment files released in February of each year, from 2015 through 2017, reflecting enrollment effective in January of each respective year

8 Pope, Christopher. “Supplemental Benefits Under Medicare Advantage.” Health Affairs. January 21, 2016. Available at http://bit.ly/2uK9pRv.

9 Kaiser Family Foundation, “Medicare Advantage 2016 Spotlight: Enrollment Market Update.” May 11, 2016. Accessed at: http://www.kff.org/medicare/issue-brief/medicare-advantage-2016-spotlight-enrollment-market-update/

It is unlikely that all the dentists currently participating in MA will complete the form in time to continue participating in 2019, and some may decide not to fully register in MA in future years, reducing the size of dental networks and, as a result, access to dental services for beneficiaries, specifically those with periodontal disease. For purposes of this analysis, Avalere modeled the projected financial impact to the Medicare Advantage program under three scenarios where dentists do not sign up to participate in the Medicare Advantage program at the current rate.

Assumptions and Methodology

 Prevalence of the Key Conditions

To conduct the analysis, Avalere focused on three disease categories: diabetes, stroke, and cardiovascular disease. Approximately 8.6 million MA enrollees are currently diagnosed with one or more of these common conditions. Publicly available research indicates that there may be a link between these conditions and periodontal disease and that providing periodontal treatment can significantly reduce the overall medical costs for people with these conditions. While periodontal treatment likely also benefits individuals with other conditions and accrues savings to Medicare for more beneficiaries, we focused on the three conditions above because more research exists on their connection to the periodontal disease.

To determine the total number of beneficiaries with each of these conditions (or combination of the conditions) Avalere used the 2013 Medicare Current Beneficiary Survey (MCBS) to identify the number of individuals in MA with each condition or combination of conditions. For the three conditions, Avalere used the MCBS questions that asked whether the respondent has ever had the condition. The seven conditions or combinations are:

1. Diabetes only
2. Stroke only
3. Cardiovascular disease only
4. Diabetes and stroke
5. Diabetes and cardiovascular disease
6. Stroke and cardiovascular disease
7. Diabetes, stroke, and cardiovascular disease

Avalere determined the approximate annual average cost of individuals in MA with each disease by multiplying the risk score for each of the set of conditions by the average plan bid for 2017.

Using the total prevalence of the conditions from MBCS and the average cost per beneficiary, Avalere calculated the estimated total cost of individuals with these conditions in MA.

 Beneficiaries with Periodontal Disease and Coverage

As the available literature demonstrates savings due to periodontal treatment, Avalere segmented the population with these conditions by those with periodontal disease. For the analysis, Avalere assumed 66% of MA beneficiaries have some form of periodontal disease.

10 Additionally, based on data on supplemental benefits in MA, Avalere assumed that 29.4% of MA beneficiaries have access to periodontal treatment services.

11. Based on the combination of these two assumptions, Avalere estimated that 19.4% of all MA beneficiaries have both periodontal disease and access to treatment. Further, Avalere assumed that all those individuals with periodontitis and who have access to treatment are treated, which is likely an overestimate. In the analysis, this means that those individuals are assumed to be accruing savings to the program due to their treatment.

Savings Due to Periodontal Disease Treatment

Based on the available literature, Avalere assumed that periodontal treatment leads to lower costs for beneficiaries with diabetes, cardiovascular disease, and stroke. Using the results from existing studies, Avalere assumed medical costs would be 29.8% lower for beneficiaries with diabetes, 19.8% lower for those with cardiovascular disease, and 37.8% lower for those with a history of stroke.12 Savings for individuals with multiple conditions are determined by averaging the above percentages for all their conditions. Importantly, this is likely an underestimate of the expected savings for the individual.

 Scenarios on Impact of 855i Enrollment

Based on input from NADP, Avalere modeled three scenarios of the impact of the 855i enrollment requirements on dental provider participation in MA:

1. High Impact: No dental carrier will be able to provide a network-based dental benefit for January 1, 2019, effective date. Over the course of the next network building period (September 2018 to March 2019), in preparation for the 2020 plan year, dentist sign-up using the 855i form could follow the “medium” impact outlined below in beginning to reintroduce network-based dental coverage to MA

2. Medium Impact: Using the trend developed for the “low impact” scenario (below), modified by the experience of dental carriers enrolling dentists using the 855o form to prescribe/order prescriptions under the Part D drug benefit, this scenario assumes that dentists will be reluctant to sign up to participate in MA using the 855i form. Under this scenario, about one-third of the dentists that currently participate in supplemental dental plan networks today would sign up for MA plans’ dental networks in the foreseeable future. As a result, a portion of the MA enrolled population with dental benefits will experience disruption and loss of continuity of dental

10 Eke, Paul I., Bruce A. Dye, Liang Wei, Gary D. Slade, Gina O. Thornton-Evans, Wenche S. Borgnakke, George W. Taylor, Roy C. Page, James

2012. Beck, and Robert J. Genco. “Update on Prevalence of Periodontitis in Adults in the United States: NHANES 2009 to 2012.” Journal of Periodontology: 611-22.

11 Pope, Christopher. “Supplemental Benefits Under Medicare Advantage.” Health Affairs. January 21, 2016. Available at http://bit.ly/2uK9pRv.

12 MK Jeffcoat, RL Jeffcoat, and PA Gladowski. “Impact of periodontal therapy on general health: evidence from insurance data for five systemic conditions.” Am J Prev Med 47, no. 2 (2014): 166-74; “Improved health and lower medical costs: why good dental care is important.” Cigna Health and Life Insurance Company, 2013.; “Aetna’s Dental Medical Integration Program may help lower costs and result in better health.” Aetna, Inc., 2013.; “Medical dental integration study.” United HealthCare Services, Inc., 2013.

3. Low Impact: The rule requiring dentists to sign-up to prescribe/order for Part D Medicare coverage was adopted in May of 2014 effective in June 2015. The first delay of the effective date pushed implementation to June 2016. In March 2016, it was further delayed to February 2017 and then in October of 2016 to January 2019. The 855o form was promulgated for use of dentist sign-up under this rule. While there is no early tracking data for the rate of sign-up under the 855o, NADP has two years of data, i.e. June 2016 and August 2017. The data show that about 40,000 dentists signed up under the 855o in the first 2 years. One year later, just over 51,000 signed up—an increase of 30% over the prior year. Assuming that dentists’ familiarity with the 855o would predispose them to sign up under the 855i, this sign-up rate could be applied to dentists opting into MA supplemental plan networks with one-half of those signing up in the two- year initial period for Part D signing up for the 2019 plan year. Under this scenario, in the first year of the Rule’s implementation (the plan year 2019), 20% of dentists “apply and are approved” for MA plan supplemental networks. In this scenario, participation progresses to a maximum of 70% of current participation over 5 years. Based on information provided by NADP, participation by 70% of current dentists in MA would provide a comparable level of access to dental coverage as today (detailed below as 100%).

Table 3: Percentage of Eligible Beneficiaries with Access to Network Based Dental Coverage Due to Dentists Filed & Approved Under 855i

Analysis Methodology

To conduct the analysis, Avalere used the expected percentage reduction in the number of MA beneficiaries who have access to dental (and more specifically, periodontal coverage), starting in 2019 as the result of providers not signing up for the MA program with an 855i Form, and assumed an increased cost for those individuals, who currently have lower spending due to access to periodontal treatment. Avalere assumed the reductions in coverage were distributed proportionately throughout the MA program.

Avalere then compared the subsequent expected increase in spending for those individuals, who previously had access to periodontal treatment to their spending if they had maintained their coverage. That difference is the expected increase in costs for the MA program.

Model Results and Findings

Avalere estimates substantial cost increases to the MA program due to dental providers no longer participating with MA plans and subsequent increases in the spending for MA beneficiaries. The increased costs are attributable to individuals with periodontal disease in conjunction with diabetes, stroke, or cardiovascular disease, no longer receiving treatment and subsequently incurring higher medical costs. The reduction in the number of dental providers participating in the MA program is projected to have a significant financial impact on Medicare spending.

 Avalere estimates the total cost to the MA program from 2019-2028 to be between $38 billion and $165 billion.

Table 2: Total Estimated Impact on Medicare Advantage Program Spending by Condition (in Billions)

 The impact on spending is substantial in the “High” and “Medium” scenarios, which do not project that greater than 35% of dentists eventually enroll in the program. The “Low” scenario does project that the full complement of dentists eventually returns to the program, reducing the costs to the MA program in the out years.

Limitations of the Analysis

Importantly, the analysis assumes that removing periodontal treatment from those individuals with periodontal disease who currently receive treatment would entirely reverse the associated savings, observed in the literature, of providing periodontal treatment to those individuals which may overestimate the impact. Further, the analysis does not take into account the financial considerations for dentists of participating in MA; in other words, the model does not incorporate dentists’ expected behavior with regard to any lost revenue that would result from no longer participating in MA. This could also result in an overestimate of the number of dentists that would stop participating in MA under the three scenarios, particularly the “high impact” scenario. On the other hand, this study only examines the impact of treatment of periodontal disease and a recent unpublished study conducted by Aetna demonstrates overall medical savings of about three percent per annum from general preventive dental treatment. The Aetna study examines integration of dental and medical data for at-risk patients with diabetes, cardiovascular or cerebrovascular disease and found statistically significant medical savings associated with receiving preventive dental treatment compared to matched control groups that did not receive treatment. Avalere’s analysis does not assess general preventive dental services nor does it assume any impact, neither a cost nor an increase, for the MA population without diabetes, stroke, or cardiovascular disease.