The Centers for Medicare and Medicaid Services has issued its annual Medicare Advantage (MA) proposed rate notice for 2025 and is seeking comments before it finalizes the rate. It is trying to combat tens of billions of dollars in annual overpayments to Medicare Advantage plans. Right now, they result in about $25 billion a year in higher premiums for Medicare enrollees. If not terminated, these overpayments will, over time, destroy Medicare, making it unaffordable for the older adults and people with disabilities who rely on it for their medical care.
What are the big issues with Medicare today?
Traditional Medicare, which gives people easy access to care from physicians and hospitals across the US, is not an option for people with low incomes because it lacks an out-of-pocket cap, and Medigap is unaffordable or unavailable to them. MA plans are good while you’re healthy, but that’s not why we have health insurance. When you develop cancer and other costly conditions, MA plans have a powerful financial incentive to stint on care and few constraints since they face little accountability for their bad acts. Non-standardized administrative processes, including claims processing and prior authorization protocols, mean inappropriate delays and denials, ineffective CMS oversight and no way to protect people, particularly people with costly conditions, from bad actor plans.
People cannot make meaningful Medicare choices. Information is misleading and inadequate to keep people from joining MA plans that impose inappropriate barriers to care and endanger their health when they get sick. CMS tells them they’ll get the same benefits in Medicare Advantage as Traditional Medicare. But, it’s not true. Some plans have high denial rates, ghost networks, inappropriate prior authorization obstacles, high mortality rates. People can’t avoid them. MA plans compete to maximize profits not to promote high value care for those who most need it. CMS can only protect them if there is significantly more MA standardization. Greater standardization of out-of-pocket costs and claims processing would help promote meaningful choice and appropriate coverage. CMS also needs resources to enable appropriate oversight and enforcement.
Non-standardized Medicare Advantage administrative processes enable inappropriate care denials: So long as CMS cannot protect vulnerable individuals from MA plans that impose harmful barriers to care, TM needs to be a meaningful choice. Until Congress acts, CMS should use CMMI, its innovation center, to test a Traditional Medicare model with low out-of-pocket costs and an out-of-pocket limit that is on a more level playing field with Medicare Advantage. If TM is not on a level playing field with Medicare Advantage, Traditional Medicare will disappear, there will be less choice and higher costs for Medicare Advantage enrollees, the vulnerable will be most at risk. To help protect vulnerable MA enrollees, CMS should require MA plans to use a centralized independent agency to do claims processing and prior authorization so that plans compete to deliver better managed and coordinated care, not to avoid covering care for people with complex conditions.
Notwithstanding CMS’ efforts to address some of the problems with prior authorization and inappropriate delays and denials of care, proprietary and non-standardized claims processing and prior authorization rules mean inappropriate delays and denials, ineffective CMS oversight and no way to protect people, particularly people with costly conditions, from bad actor plans. Without an independent intermediary to process claims in a timely and standardized manner, vulnerable enrollees have a good chance of not getting the medically necessary care to which they are entitled; and, the bad actor MA plans will go undetected, to the detriment of their most vulnerable enrollees.
Here’s more from Just Care:
- 2023: Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- If you’re making a Medicare choice, don’t trust the insurance agent
- Medicare Advantage plans denied two million prior authorization requests in 2021
- Ten ways to improve Medicare Advantage
- OIG finds widespread inappropriate care denials in Medicare Advantage
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