Amidst a slew of government and other expert reports decrying Medicare Advantage for costing more and offering no better quality than traditional Medicare, as well as for engaging in widespread inappropriate delays and denials of care, the Centers for Medicare and Medicaid Services, which overs Medicare, is asking the public how to improve Medicare Advantage. Just Care, Social Security Works and Public Citizen are all working on responses, and we’d love your input. If you have a comment to share, please post it in the comments section of this post.
It might be the case that Medicare Advantage is not fixable. Its problems are rooted in the way Medicare Advantage plans are paid–a fixed upfront payment based on the MA plans’ assessment of the health of its enrollees, unrelated to the amount Medicare Advantage plans spend on care–and run too deep to be fixed. But, if Congress were willing to overhaul the payment system and standardize coverage policies, including prior authorization policies, Medicare Advantage would improve significantly. The fixes are:
- Create a financial incentive for MA plans to deliver high-value care to people with complex and costly conditions: The government should pay MA plans so that they are not penalized financially if they cover care for a disproportionate number of people with costly and complex conditions. Right now, the government’s capitated payment system means that if MA plans attract too many people with cancer or another expensive condition and provide them with needed care, they could lose a lot of money. Put differently, they can maximize profits by enrolling a disproportionate number of people in good health and delaying and denying care for people in poor health. That’s why they rarely contract with centers of excellence for high-cost care and never advertise or promote programs for people with costly conditions.
- Make MA cost-effective: The government should significantly limit the amount of profit MA plans can generate. Right now, they technically must spend at least 85 percent of the money they receive on medical services. However, they can game the system in ways that permit them to spend less and profit more. The government should pay them an administrative fee to coordinate care, cover the cost of all services delivered, and put them on a global budget. MA currently costs taxpayers and the Trust Fund way more than traditional Medicare, as a result of the risk-adjusted capitated payment system. That system allows plans to “upcode,” charging more for some patients than appropriate, and delay and deny care inappropriately. They can pocket much of the money they save, profiting from not covering people’s needed care.
- Identify the MA bad actors and hold them accountable for their bad acts: The government should disclose publicly the Medicare Advantage plans engaged in high rates of inappropriate delays and denials of care so people can make a meaningful choice to join them, and, to save lives and promote good health. It should cancel contracts with those plans if they don’t correct their ways. Meaningful penalties for contract violations are critical. Similarly, the government should end star-ratings for all MA plans that fail to provide complete and accurate patient encounter data, as required by law, which is needed to assess quality of care. To date, the agency charged with assessing quality in MA has been unable to do so because it lacks the data. The government should not allow these MA plans to participate in the Quality Bonus Program. And, it should cancel its contracts with those that do not correct their ways and turn over accurate and complete data, to save lives and promote good health.
- Offer a supplemental policy to people in MA that picks up all out-of-pocket costs: Right now, too many enrollees are skipping care because they cannot afford the deductibles and copays. A supplemental policy would allow people to better budget for their care. Out-of-pocket costs jeopardize the health and well-being of enrollees, with particularly poor outcomes for Latinx and BIPOC communities. In addition, out-of-pocket costs present a large barrier to care for people with low incomes.
Other reforms also are needed to strengthen Medicare and improve care for older adults and people with disabilities, including ensuring MA plan networks are adequate or eliminating them altogether and ensuring their marketing practices are not misleading or, worse still, fraudulent. And, Congress needs to level the playing field between traditional Medicare and Medicare Advantage to ensure traditional Medicare remains a meaningful option.
- OIG finds widespread inappropriate care denials in Medicare Advantage
- MedPAC blasts Medicare Advantage
- Government watchdog agencies tell Congress Medicare Advantage inappropriately restricts access to care and needs fixing
- Medicare Advantage plans unaccountable for billions in overcharges
- People with serious health needs more likely to disenroll from Medicare Advantage plans
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