JustCare

Tag: CMS

  • Medicare adds $25+ billion to Medicare Advantage insurer coffers

    Medicare adds $25+ billion to Medicare Advantage insurer coffers

    The Centers for Medicare and Medicaid Services just announced the final rule regarding Medicare Advantage payments in 2026. Notwithstanding $83 billion in overpayments to MA insurers last year and  this year as well, the Trump Administration opted to increase insurer payments by $25+ billion in 2026.

    The payment increase of 5.06 percent is more than double the proposed increase of 2.23 percent in the Biden administration’s Advance Notice for MA payments in 2026. To be clear, increases in payments to Medicare Advantage insurers end up largely in the form of profits for the insurers, but they also allow the insurers to market “additional benefits” to people with Medicare.

    Beware: If you are enrolled in a Medicare Advantage plan and you are diagnosed with a complex and costly condition, you might not be able to see the specialists you want to see or use the hospitals you want to use. Moreover, you may face inappropriate delays and denials of care. If you want easy access to care, you should enroll in traditional Medicare.

    The serious problem with any payment increase is that the Medicare Advantage insurers are expected to be overpaid more than $1 trillion in the next 10 years. The result is that people with Medicare will be forced to pay $220 billion more in Medicare premiums over the next ten years. Medicare premiums are calculated based on program costs.

    What’s equally concerning is that the Medicare Trust Fund is projected to lose $550 billion over the next ten years as a result of government overpayments to insurers.

    The Centers for Medicare and Medicaid Services claims that the additional boost to MA insurers stems from higher costs in the last quarter of 2024.

    On a happier note, CMS is finalizing the third and last year of the proposed change to the Medicare Advantage “risk-adjustment model” for paying insurers that the Biden administration launched in 2024. The changes are intended to eliminate some of the gaming that insurers engage in to collect more from the government for their services than appropriate.

    Here’s more from Just Care:

  • Medicare Advantage costs and prior authorization rules impede access to care

    Medicare Advantage costs and prior authorization rules impede access to care

    Medicare Advantage costs and prior authorization rules continue to impede access to care. Anyone enrolled in a Medicare Advantage plan–Medicare coverage administered by a corporate health insurer–should be concerned about whether they will be able to get and afford the care they need if they get sick. Traditional Medicare provides coverage for care from almost any physician or hospital in the US without the need for prior authorization.

    Jakob Emerson reports for Beckers Payer that typical deductibles for Medicare Advantage plans are now more than twice what they were in 2024. It’s fair to assume that they will continue to rise, given the Trump administration’s full court press on government spending. You’ll be fine in Medicare Advantage if you’re healthy, but you’ll likely be far better off in traditional Medicare if you want to ensure you’ll be able to afford and receive the care you need when you get sick.

    Average Medicare Advantage deductibles were about $132 in 2024 and are now $315, according to an eHealth survey. That’s a 139 percent increase. Monthly premiums average just $5 a month this year, down from $9 in 2024. And, total out-of-pocket costs for covered in-network services can be as high as $9,350 this year, depending upon the Medicare Advantage plan.

    Average Medicare Part D prescription drug coverage premiums are also up, from $29 to $36, about 25 percent.

    Meanwhile, prior authorization rules remain another obstacle to care for Medicare Advantage enrollees, particularly those who need costly and complex care. Rylee Wilson reports for Beckers Payer that some states are looking into regulating insurers’ use of prior authorization. They are especially focused on insurers’ use of artificial intelligence or AI to determine whether a procedure should be covered and want a physician to oversee those decisions. (Could  that simply mean a physician rubber-stamping them?)

    Patients are currently suing UnitedHealth and Humana for using AI to deny rehab care in Medicare Advantage inappropriately. UnitedHealth spokespeople argue that they do not use AI exclusively to make coverage decisions. They might not, though having a provider oversee these decisions with financial and other incentives to approve them is no better than using AI exclusively.

    Last year, the Centers for Medicare and Medicaid Services, CMS, which oversees Medicare, issued guidance on the use of AI in Medicare Advantage. CMS did not ban the use of AI or even restrict it. It simply said that the AI algorithm must comply with Medicare’s coverage requirements. Good luck enforcing that rule.

    Dr. Mehmet Oz, who will head of CMS, once confirmed, believes in AI as a tool for expediting prior authorization decisions–seemingly, even though they can speed up inappropriate denials. However, Oz says that insurers should not use AI for more than 1,000 procedures.“I would argue that to use AI wisely, we would make a decision which is we’re only going to pre-authorize 1,000 procedures,” he said at a recent Senate hearing. Where he pulled the 1,000 number from is anyone’s guess.

    Here’s more from Just Care:

  • What will Dr. Oz do as head of Medicare agency?

    What will Dr. Oz do as head of Medicare agency?

    President-elect Donald Trump has nominated Mehmet Oz to be the next head of the Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare and Medicaid, reports the New York Times. The choice of Dr. Oz, a TV celebrity with no government or management experience is in keeping with Trump’s other picks for big government roles. The open question is what will Dr. Oz do as head of CMS?

    If the past is any indicator, Dr. Oz will put in place plans to eliminate the public traditional Medicare program. It would be a huge mistake and arguably not doable, given that Medicare Advantage doesn’t work for some people in some parts of the country and works poorly for people with serious conditions and people with low incomes in many parts of the country. Wealthy Americans who understand the health risks of a Medicare Advantage plan avoid it at all costs.

    Traditional Medicare covers your care from virtually any physician or hospital in the country, without delay or forcing you to go through prior authorization hoops. When you need costly care, as most of us will at some point, Medicare protects you and ensures you are able to get the care you need. Medicare Advantage, in sharp contrast, works well when you’re healthy and tends to delay and deny care inappropriately when you most need care. So, people in Medicare Advantage take a huge risk.

    Back when he ran against John Fetterman for a US Senate seat in 2022, Oz made clear that, unlike his opponent, he does not support “free health care for everyone.”  Oz advocates for Medicare Advantage for All, a health care system that gives full control over our healthcare to big private insurers and will ration care based on ability to pay.

    Oz has suggested a 20 percent payroll tax to cover the costs of his Medicare Advantage for All plan. It would be a huge windfall for the biggest corporate health insurers. It would also be a huge windfall for Oz, as he and his wife are reported to have millions of dollars invested in the health care industry.

    Senator Patty Murray of Washington State expressed deep concern about Dr. Oz’s nomination: “Even putting aside the raft of alarming pseudoscience Dr. Oz has previously endorsed, it is deeply disappointing to see someone with zero qualifications being announced to head up such a critical agency.”

    Here’s more from Just Care:
  • Louisiana: Medicare Advantage denials harm patients, while gouging taxpayers

    Louisiana: Medicare Advantage denials harm patients, while gouging taxpayers

    Since 2018, the U.S. Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) has warned that Medicare Advantage (MA) plans sometimes deny enrollees’ requests for essential services they need.1 2

    In response to these findings, the Centers for Medicare and Medicaid Services (CMS) finalized a 2024 rule to clarify “clinical criteria guidelines to ensure people with MA receive access to the same medically necessary care they would receive in traditional Medicare.”3 Unfortunately, providers report little improvement since the rule became effective in January. Inappropriate denials continue to cause poor outcomes for patients, hospital readmissions and increased waste of taxpayer dollars.

    Inpatient Rehab Denials

    The 2024 MA rule did not help U.S. Air Force veteran and Pearl River, LA resident George Carrigan. After complications from diabetes required an amputation of his leg, Humana denied his doctors’ recommendation for care at an inpatient rehabilitation facility (IRF), despite Medicare rules listing amputation as a condition requiring such services.4

    Humana’s two denial letters said he did not need supervision from a rehab physician or interdisciplinary care team, even though these clinicians would have helped control his diabetes, monitored the healing of his wound, managed his medications, and prepared him to return home independently. “The services you need can be provided safely in other settings,” wrote Humana, before sending him to a less expensive setting where his condition deteriorated.

    Carrigan’s daughter and family caregiver, Colleen Fickle, said her dad slipped in the nursing home’s shower and now needs wound care on the amputated limb. Poor catheter maintenance also caused him to be readmitted to the hospital with sepsis. Fickle, who works full time while also caring for her child with a brain injury, said her father is now bedbound at home and dependent on family. She believes none of these complications would have happened and that her father would be walking today if Humana had permitted him to receive close medical supervision at an IRF.5

    Mandeville resident William Sercovich, also a U.S. Air Force veteran, suffered two strokes and faced multiple denials before Humana approved his request for IRF services. Both Humana denial letters repeated Medicare’s rehab criteria without explaining why Sercovich did not need a rehab doctor, intensive team or three hours of therapy per day.

    “We were in the hospital for two weeks longer than we should have been because of denials from the insurance company,” said his daughter, Sondra Sercovich. “I hope people take action, so it doesn’t take so many denials to get the proper medical care.”

    The OIG estimated a difference of more than $8,500 in average payments per stay between IRFs and nursing homes for 2018.6 OIG has also warned that MA plans may deny needed care “in an attempt to increase their profits,” misusing funds that CMS paid for people’s healthcare.7 In 2022, OIG physicians audited MA care denials for IRF services and found that in some cases patients met admission criteria, needed higher-level care and alternatives were insufficient to meet their needs.8 Studies have found that MA enrollees “are more likely to enter lower-quality nursing homes compared to fee-for-service enrollees.”9

    When used appropriately, prior authorization can limit low-value services, but healthcare providers also caution that “cost containment provisions that do not have proper medical justification can put patient outcomes in jeopardy.”10

    A recent Kaiser Family Foundation (KFF) study comparing MA plans found that “prior authorization requests were most common for Humana plans.”11 Humana did not respond to requests for comments on its prior authorization practices under new federal rules.

    This year, CMS warned MA plans they may not deny a hospital patient’s request for discharge to an IRF or redirect care to a different setting if a physician orders these services and the patient qualifies under Medicare coverage rules.12 Yet, plans have significant leeway in how they interpret this directive, and families often lack the time to appeal when the patient is ready to leave the hospital.

    Fickle said her father needed intensive therapy at Northshore Rehabilitation Hospital in Lacombe, LA. Speaking of the value of IRF care, the hospital’s CEO Laurel Dupont said “one single hospital readmission would cost [MA plans] as much if not more than the entire rehab stay. Northshore Rehab had zero readmissions of an amputee patient during all of 2023.” A study by Dobson DaVanzo & Associates comparing IRF and skilled nursing facility patients found that IRF patients returned home earlier and remained there longer, with lower mortality rates, emergency room visits and hospital readmissions.13

    Several providers report concerning automatic denials for IRF services. In recent months, TIRR Memorial Hermann Health System in Houston reported receiving automatic MA denials for 90% of prior authorization requests. “If they give us a denial, they’ll say you can go to [a peer-to-peer call with our physician] or you can go ahead and discharge to a nursing home, and I’ll give you that approval now,” said financial clearance manager Courtney Roberson, adding that these automatic denials often keep a patient in the hospital for four to five days longer, taking weekends into account.

    Patients also stay in the hospital longer because MA plans are not required to include IRFs in their provider networks, even though IRF services are a Medicare covered benefit. “It’s not right for Medicare beneficiaries to not have access to this level of care,” said TIRR Memorial Hermann CEO Rhonda M. Abbott. “It doesn’t make sense to eliminate a whole level of care.”

    Last year during a congressional hearing, the American Hospital Association (AHA) described how MA plans financially benefit from these post-acute care delays, explaining that “the plan has already paid the hospital a flat rate for care and is either delaying or attempting to avoid discharging the patient to the next site of care, which would require a separate, additional reimbursement. AHA claims data analysis reflects that length of stay in the referring hospital is typically longer for MA beneficiaries than traditional Medicare beneficiaries being discharged to a post-acute setting.”14

    These transfer delays also contribute to the overcrowding of emergency departments. “An example is a patient who is on a regular floor bed who needs to go to post-acute care,” said Baton Rouge emergency physician Dr. John Jones. “I need that bed for my next congestive heart failure patient who’s in the emergency department, and I can’t put them in there because it’s being occupied by somebody who’s waiting three days over the weekend to get placed.”

    Cardiology and Cancer Care

    MA plans also deny care for patients who need high-quality, Medicare-covered cardiology and cancer care services.

    Cardiologist Dr. Joe Deumite, in Baton Rouge, offered two examples. In one case, Humana twice denied care to a man who needed a pacemaker. “He had 73 episodes where his heart paused for more than three seconds and several episodes where his heart paused for up to 5.2 seconds,” he said, adding that the care was finally approved by an independent review entity.

    In another instance, Dr. Deumite said a woman who suffers from irregular heart rhythms has had to go to the emergency room and take medications because Humana denied her appeals to receive a cardiac ablation. “There are several heart rhythms that respond to ablation, where you just slide up a catheter and cauterize a circuit, and its curative.”

    In April, Baton Rouge medical oncologist Dr. Gerald Miletello recorded a social media video testimonial where he described a dangerous care delay for one of his lung cancer patients.15 “A six-week delay is not following the guidelines because you can easily die with stage four cancer in six weeks,” he said.

    Radiation oncologist Dr. William Russell, in Baton Rouge, said his patients have faced delays when they need to start concurrent chemotherapy with radiation. He also criticized MA plans’ requirement that he conduct a CT scan before they will approve a PET scan. “You have to do diagnostic tests that are not going to be as relevant as the one that you wanted,” he said. “It costs the payers more money to go through that process.” The 2024 MA rule prohibits this practice of step therapy for non-drug services.

    Medical oncologist Dr. Michael Castine, in Baton Rouge, said MA plan documentation requests require him to factor in 10 days between planning and implementation of a patient’s cancer treatment. He mentioned risks for patients with small cell lung cancer, aggressive lymphomas or risks of brain metastasis, warning that “a delay of treatment by a week or two might actually change the whole plan.”

    Peer to Peer Frustrations

    Physicians also criticized the quality of communication they received from MA plan physicians when they call to appeal a patient-care denial.

    “They’re making it up as they go along,” said physical medicine and rehabilitation physician Dr. Adam Carter, who serves as medical director of ClearSky Health Rehabilitation Hospital in Flower Mound, Texas. “I see them as constrained by their employer.”

    “You can almost tell by the first 10 seconds into your conversation whether it’s going to work or not, because you can tell whether that physician is reasonable,” said Dr. Deumite. “They’re looking at year-and-a-half old guidelines.”

    Policy Solutions for Improving Medicare Advantage

    Federal leaders have designed a broad range of solutions to help hold MA plans more accountable. Some changes will not begin until 2026, and stakeholders want additional timeliness and transparency requirements for meaningful patient-care improvements.

    Timeliness

    Today, MA plans must make a prior authorization decision within 14 business days for standard requests and 72 hours for expedited or emergency requests. In 2026, the deadline for standard requests will become seven business days. Stakeholders have called for a 24-hour deadline for emergency requests; pending federal legislation would suggest, but not require, CMS to institute such an expedited timeline.16 17

    Reporting

    In 2026, MA plans must begin publicly reporting aggregate contract-level prior authorization metrics, including denial rates and timeliness. Much of this information already exists today. According to KFF, MA plans denied 3.4 million prior authorization requests in 2022. Only one in ten denials were appealed, but more than 8 out of 10 appeals resulted in overturning the denial. With limited data, it’s not possible to determine the initial reasons for these improper care delays. A study by Premier found that MA denials are more common for higher cost treatments, and that hospitals’ average administrative cost to fight these denials is nearly $20 billion a year.18

    Federal leaders, including Louisiana’s U.S. Sen. Bill Cassidy, and multiple provider groups have asked CMS to require MA companies to report more specific and meaningful data.19 20 KFF researchers found that “substantial data gaps remain that limit the ability of policymakers and researchers to conduct oversight and assess the program’s performance, and for Medicare beneficiaries to compare Medicare Advantage plans offered in their area.”21 KFF also found that “without plan-level data, by type of service, it will not be possible to determine whether plans are complying” with the 2024 MA rule.

    KFF also reported that MA companies “do not report the reasons for prior authorization denials to CMS. If most denials of prior authorization requests are because the service was not deemed medically necessary, efforts to increase transparency of the coverage criteria, such as those recently included in a final rule, may be more likely to have an impact.” KFF has also pointed to a lack of transparency related to decisions from the independent review entity that considers appeals after an MA physician denies a request.22

    CMS opted against requiring plan-level data in 2026, saying it did not want to overwhelm consumers and that it wanted to “limit plan burden.”23 The agency will consider more detailed reporting requirements during future rulemaking.

    Internal MA Plan Monitoring

    CMS now requires all MA plans to establish a Utilization Management Committee to review prior authorization policies annually and ensure compliance with traditional Medicare’s national and local coverage guidelines.24 The AHA urged the Medicare Payment Advisory Commission to monitor whether these committees will have authority to overturn harmful policies, writing that “many providers fear that these committees will serve as little more than a rubber stamp for plan policies.”25

    During the public comment period on the 2024 MA final rule, health insurance companies argued that forcing them to follow traditional Medicare’s clinical criteria would lead to “fewer affordable, high-quality plan choices for beneficiaries” and “adverse health impacts.”

    “CMS in the rule does give MA plans certain limited sets of circumstances where they can use their own internal coverage criteria when traditional Medicare criteria is not fully established,” said Michelle Millerick, AHA director for health insurance coverage and policy. “Some MA plans are over-extending that limited flexibility, and there’s not necessarily a clear definition of exactly when Medicare criteria is fully established, especially for level of care determinations. Stronger enforcement of these provisions from the 2024 MA final rule is needed to ensure plans do not continue to use more restrictive criteria than Medicare.”

    Denial Letter Language

    Beginning in 2026, CMS said the prior authorization denial letters must be “sufficiently specific to enable a provider to understand why a prior authorization has been denied and what actions must be taken to resubmit or appeal.” The agency said the MA plans’ reason for denial “could include” a variety of explanations, such as “how documentation did not support a plan of care for the therapy or service” or “specifically, why the service is not deemed necessary.” Experts say they are cautiously optimistic, but that it remains to be seen how effectively CMS will enforce this policy for patients like Carrigan and Sercovich.

    Targeted Auditing/Aggressive Enforcement

    This year, CMS said it will conduct routine and focused audits to assess compliance with the 2024 MA rule. In a statement, the agency said that it “may issue compliance and enforcement actions, including civil monetary penalties to MA organizations who fail to comply with our regulations.” Providers may send complaints with specific examples of MA plans’ noncompliance to [email protected].

    The OIG recently announced plans to audit MA IRF denials and will issue a report in 2026.26 “I can tell you with great certainty that you will see us expanding our oversight of Medicare Advantage in the coming months and years,” said HHS Inspector General Christi A. Grimm during a recent speech to MA company leaders. “We want Medicare Advantage to be successful. OIG’s work helps ensure that the program works as intended for Medicare enrollees and for taxpayers.”27

    In a statement for this article, OIG said providers may email specific concerns to the agency at [email protected]. “Input from health care providers about managed care practices are regularly sent to relevant subject matter experts, including in our agency’s leadership, for their awareness and to inform our work,” wrote OIG.

    Last year, the federal government paid MA plans more than $454 billion to provide high-quality care to more than 30 million people.28 KFF reports that nearly 60 percent of Louisiana’s Medicare beneficiaries are enrolled in an MA plan this year.29 Providers have applauded the OIG for exposing dangerous care denials and for calling on MA corporate leaders to provide better value to patients and taxpayers.30 “The Medicare Advantage plans aren’t going to change until their board of directors at the company understands as a matter of corporate policy that this isn’t the way to go,” said Dr. Carter.

    [1] https://oig.hhs.gov/oei/reports/oei-09-16-00410.asp

    [2] https://oig.hhs.gov/reports-and-publications/all-reports-and-publications/some-medicare-advantage-organization-denials-of-prior-authorization-requests-raise-concerns-about-beneficiary-access-to-medically-necessary-care/

    [3] https://www.cms.gov/newsroom/fact-sheets/2024-medicare-advantage-and-part-d-final-rule-cms-4201-f

    [4] https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/downloads/fs1classreq.pdf

    [5] https://www.facebook.com/LAHospitals/videos/252495247935007

    [6] https://oig.hhs.gov/documents/evaluation/3150/OEI-09-18-00260-Complete%20Report.pdf

    [7] https://oig.hhs.gov/oei/reports/oei-09-16-00410.pdf

    [8] https://oig.hhs.gov/documents/evaluation/3150/OEI-09-18-00260-Complete%20Report.pdf

    [9] https://pubmed.ncbi.nlm.nih.gov/29309215/

    [10] https://www.ama-assn.org/system/files/principles-with-signatory-page-for-slsc.pdf

    [11] https://www.kff.org/medicare/issue-brief/use-of-prior-authorization-in-medicare-advantage-exceeded-46-million-requests-in-2022

    [12] https://www.aha.org/system/files/media/file/2024/02/faqs-related-to-coverage-criteria-and-utilization-management-requirements-in-cms-final-rule-cms-4201-f.pdf

    [13] https://amrpa.org/portals/0/dobson%20davanzo%20final%20report%20-%20patient%20outcomes%20of%20irf%20v_%20snf%20-%207_10_14%20redated.pdf

    [14] https://www.aha.org/testimony/2023-05-17-aha-statement-senate-subcommittee-medicare-advantage-delays-and-denials

    [15] https://www.facebook.com/LAHospitals/videos/1156382158614094

    [16] https://www.congress.gov/bill/118th-congress/senate-bill/4532/text

    [17] https://amrpa.org/Portals/0/AMRPA%20Comments%20on%20MA%20Data%20RFI%20May%202024_Final.pdf

    [18] https://premierinc.com/newsroom/blog/trend-alert-private-payers-retain-profits-by-refusing-or-delaying-legitimate-medical-claims

    [19] https://www.cassidy.senate.gov/newsroom/press-releases/cassidy-warren-blackburn-cortez-masto-call-for-better-medicare-advantage-data-collection-reporting/

    [20] https://www.aha.org/lettercomment/2024-05-29-aha-rfi-response-cms-medicare-advantage-data-and-oversight

    [21] https://www.kff.org/medicare/issue-brief/gaps-in-medicare-advantage-data-remain-despite-cms-actions-to-increase-transparency/

    [22] https://www.kff.org/private-insurance/issue-brief/final-prior-authorization-rules-look-to-streamline-the-process-but-issues-remain/

    [23] https://www.govinfo.gov/content/pkg/FR-2024-02-08/pdf/2024-00895.pdf

    [24] https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-422/subpart-C/section-422.137

    [25] https://www.aha.org/lettercomment/2023-11-30-aha-urges-medpac-examine-medicare-advantage-denials-hospital-market-basket

    [26] https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000873.asp

    [27] https://oig.hhs.gov/documents/speeches/1106/IG-Grimm-RISE-transcript.pdf

    [28] https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends

    [29] https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2024-enrollment-update-and-key-trends/

    [30] https://youtu.be/fDzAb-6aog8?si=KIuiXj23d2yr8eoP

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  • What we don’t know about Medicare Advantage

    What we don’t know about Medicare Advantage

    [Editor’s note: The following is the response to a request for information about Medicare Advantage data gaps by the Centers for Medicare and Medicare Services, from a coalescence of grassroots organizations and others.]

    May 29, 2024

    The Honorable Chiquita Brooks-LaSure Administrator
    Centers for Medicare and Medicaid Services
    U.S. Department of Health and Human Services
    200 Independence Avenue, SW Washington, DC 20201
    The Honorable Xavier Becerra, Secretary
    U.S. Department of Health and Human Services
    200 Independence Avenue, SW Washington, DC 20201

    Re: CMS-4207-NC–Medicare Program; Request for Information on Medicare Advantage Data Submitted electronically via https://www.regulations.gov

    Dear Administrator Brooks-LaSure and Secretary Becerra,

    Thank you for providing us with the opportunity to share our views on Medicare Advantage (MA) data gaps and needs in order to make critical improvements to MA. Like you, our goal is to promote health equity, protect enrollees, and ensure the fiscal integrity of the Medicare program. Right now, with limited, untimely and incomplete MA data, these goals are a pipe dream.

    This response to the MA Data request for information is submitted on behalf of the below signed organizations and individuals representing a wide and diverse swath of stakeholders. We believe that critical data gaps today undermine MA accountability and allow bad actors to gouge taxpayers, erode the Medicare Trust Fund, endanger the lives and well-being of older adults, and discriminate against Black, Hispanic, Pacific Islander, low-income and critically ill older adults and people with disabilities.

    We salute CMS for trying to enhance enrollee protections in MA but, without better data, there is no way to protect people from plans that do not honor their obligations to cover Medicare benefits and other contractual obligations. CMS cannot cancel their contracts or penalize them appropriately. CMS cannot warn people about MA plans with unconscionably high denial rates, inadequate networks, or high mortality rates. Unfortunately, the available data suggests there are far too many of them.

    We agree with you that we should “have, and make publicly available, MA data commensurate with data available for Traditional Medicare to advance transparency across the Medicare program, and to allow for analysis in the context of other health programs.” Not only is that not the case today, but we know from MedPAC that insurers have never met their obligation to release complete and accurate encounter data. That failure alone indicates either an inability of insurers to effectively manage care, or a blatant disregard for the value of this data for effective oversight, or perhaps a desire to hide the data to avoid appropriate accountability for their bad acts. Whatever the reasons, it is essential that any and all data requirements from insurers be fashioned in ways that ensure their complete, accurate and timely collection and impose appropriate non-discretionary penalties for insurers’ failure to provide the data.

    Without complete, accurate and timely plan-level data, adequate resources for oversight and meaningful penalties for noncompliance, the MA program has become an ATM for the health insurers offering MA plans. This makes the MA program a dangerous choice for older adults and people with disabilities who too often wrongly assume what they are told — that they will get the Medicare benefits to which they are entitled. Further, it makes the MA program an administrative nightmare and a financial risk for providers. If Congress and the administration do not have the tools to identify and punish insurers who withhold Medicare-covered services from MA enrollees or otherwise discriminate against them, they should acknowledge the MA program’s vulnerability to corporate crime and serious or deadly enrollee harm — and overhaul or end the program.

    Recently CMS chose not to call for more detailed data reporting from MA insurers. Rather, it said that “reporting at the specialty level and service level could be overwhelming because of the volume of information presented.” If CMS cannot manage the collection and analysis of granular data to police the insurers offering MA plans effectively, CMS should publicly disclose those constraints and their dangerous consequences, call upon Congress for the needed resources, and warn enrollees upfront and clearly of its inability to protect them from bad actor insurers who have the ability and the financial incentive to deny them needed care.

    We detail below some of the most critical data gaps and needs to prevent the MA program from offering choices to older adults and people with disabilities that no one should have to make, gouging taxpayers and the Medicare Trust Fund, and disrespecting the financial and administrative needs of providers. Before we do, we want to underscore our shared goal with the administration of promoting health equity and the need for a lot more MA data to accomplish this goal.

    That said, if the government simply requires more MA data without robust oversight and non-discretionary penalties on insurers for non-compliance, the requirements would be of little value. The government must use the data to oversee the MA insurers and hold the bad actors accountable for their bad acts in meaningful ways.

    Moreover, if the government simply expects beneficiaries to make sense of volumes of Medicare data to protect themselves against bad actor MA plans or to appeal systemic inappropriate denials of care in order to get the Medicare benefits to which they are entitled, it is promoting health inequities. If the government allows MA plans to hide the data revealing that lower-income enrollees and communities of color are going without needed care because of administrative and financial burdens and inappropriate denials, it is promoting health inequities. CMS must keep bad actor MA plans out of the program and reform the MA program to minimize harm to enrollees.

    In a sadly apt comparison, the Boeing aerospace corporation was allowed to continue its money-saving profit-centric business model that led to the needless deaths of many people before Boeing was forced to suffer material consequences. We have mounting evidence that the worst performing MA plans are behaving similarly, with arguably far more horrific consequences both for their tens of thousands of enrollees and for the Medicare program writ large. And no one is yet identifying these bad actors, let alone stopping them.

    Inadequate provider networks and misleading directories cause harm

    The government cannot protect people enrolled in MA if it cannot block MA plans with inadequate networks or prevent sales agents from misleading people about networks. Today, it cannot do either, even though CMS “requires” insurers to offer adequate networks and restricts the activities of MA sales agents. Consequently, people sign up for MA plans thinking they will get the care they need from the physicians and hospitals they want or need to use and too often find they are not covered for their care from those providers. The network provider directories are inaccurate. They often can’t use a cancer center of excellence. Or, they can’t see a physician at a convenient location. Or, all of the nursing homes in their network are of poor quality. As you know, the plight of enrollees who need costly care is all the worse for Black and Hispanic people, low-income people and people in rural communities—promoting grave and unconscionable health inequities.

    CMS allows insurers to offer MA plans with different networks in a contract and only collects network information at the contract level, preventing it from ensuring network adequacy. CMS likely lacks the resources to oversee more than 4,000 MA plans effectively. To protect enrollees, this cannot continue.

    CMS could require insurers to offer the same provider network to all MA plans in a contract. That requirement would simplify oversight of network adequacy and provider directories. It also would help promote health equity, prevent provider network discrimination, and allow for more meaningful plan choice.

    The simplest way for CMS to collect accurate provider network data would be to create a central web portal on which all providers are required to list their MA plan affiliations. Insurers would then be responsible for ensuring accuracy and could penalize network providers who were not listed. People could far more easily compare MA plan networks.

    The best solution would be for CMS to require all MA plans to eliminate their networks and cover all willing Medicare providers at the Medicare rate.

    Again, whatever CMS chooses to do, it is of no use if the insurers do not have adequate networks. It is of no use if the insurers are not accountable for failing to provide accurate provider information less than 95 percent of the time or failing to have adequate networks. CMS should impose a non-discretionary meaningful penalty on these insurers in the form of a lower star rating, an X or other warning about the plan on its web site or a requirement to stop all marketing. Insurers should be held strictly liable for their errors. Enrollees should not be their victims.

    Additionally, as the Center for American Progress recommends, “CMS should ensure there are explicit protections that would allow for an enrollee to change MA plans or return to TM without being subject to medical underwriting for supplemental Medigap policies if their MA plan directory was inaccurate at their time of enrollment. For example, CMS can clarify that if an enrollee makes such a discovery, it should be considered a misleading MA practice and accordingly trigger a Special Enrollment Period (SEP) for supplemental benefits.”

    Proprietary and non-evidence-based prior authorization rules cause harm

    If MA prior authorization rules have health benefits, insurers should share them openly and freely use them. If not, insurers should be penalized heavily for using them, especially in cases where people’s lives and health are at serious risk, such as for cancer patients. Otherwise, Congress and the administration cannot protect Medicare Advantage enrollees from grave harm.

    For this reason, CMS must require insurers to disclose all prior authorization requirements they intend to use, and CMS must pre-approve them based on evidence. Penalties for non-compliance should be severe and non-discretionary. Insurers should be stopped from making people with Medicare their victims.

    To truly protect people, CMS should dictate the prior authorization rules that MA plans are permitted to use. Specifically, CMS should create a standardized prior authorization system that applies to all MA plans. Only a standardized system will promote health equity and allow people to make an informed MA choice.

    For now, in its insurer contracts, CMS should prohibit insurers from using different prior authorization rules for enrollees depending upon the MA plan they are enrolled in. There is no good rationale for allowing an insurer to discriminate against people in some MA plans through use of more prior authorization rules than other MA plans. Either prior authorization is beneficial and clinically sound or it is not.

    Recent CMS prior authorization rules are a good first step. But, without more details and non-discretionary penalties for plans that apply PA inappropriately, history and experience suggest that insurers will ignore such rules. To repeat, the only way for CMS to ensure MA enrollees get the same Medicare benefits as people in TM — and protect MA enrollees from deadly delays and denials of care as a result of PA — is for CMS to set standardized PA rules. To ensure and promote health equity, CMS should require insurers report PA denial and delay data by type of service and enrollee characteristic at the plan level.

    Insurers should also report MA plan level denials both pre and post treatment and in and out of network. CMS needs the information to ensure insurer compliance with Medicare coverage rules. Individuals need this information to avoid plans with high denial rates. Providers need this information to make informed choices about which networks to be a part of.

    Supplemental benefits are a gift to insurers who wrongly and excessively deny care

    Based on the existing evidence, it is all but certain that insurers are able to offer extra benefits and still profit handsomely because of the money they save from denying care inappropriately, keeping enrollees from seeing high quality providers, attracting a disproportionate share of healthy enrollees and creating incentives for enrollees with costly conditions to disenroll.

    CMS should automatically forbid plans with denial rates above 10 percent in the prior year from offering supplemental benefits. While this would likely mean fewer supplemental benefit offerings, as the Center for American Progress says, “The little research that is available suggests that MA plan coverage for dental, vision, and hearing services has not resulted in improved access for beneficiaries.”

    Immediately, along with the Center for American Progress, “We recommend that CMS collect and publish utilization and OOP spending data for all supplemental benefits, disaggregated by enrollee race, ethnicity, gender, income level, and other important demographic characteristics, at both the plan and beneficiary level. This information should be stratifiable by benefit transaction/service type. We also recommend that complete data on the use of prior authorization for supplemental benefits, including rates of denials on PA requests, be reported to CMS and made publicly available.”

    High disenrollment or mortality rates should disqualify an insurer from offering an MA plan

    CMS should require insurers to report MA plan-level disenrollment and mortality rates. The data should be broken down across demographic and health characteristics of the people who disenroll or die and should be publicly reported. Disproportionately high rates automatically should trigger cancellation of MA contracts. High rates should also trigger lower MA star ratings. Given that some plans have excessively high denial and mortality rates, people choosing an MA plan can only make a meaningful choice with this information. Star ratings that do not meaningfully reflect excessive mortality rates are a cynical perversion of quality methodologies.

    Out-of-pocket costs force people into debt and to forgo care

    CMS should collect and report plan level data on the number of people forgoing critical care based on cost or care denials. How many people in MA are forgoing critical care as a result of high out-of-pocket costs that their MA plan imposes? How many of them are low income, in poor health or are Black or Hispanic? How can CMS promote health equity without this information?

    CMS should collect and report plan level out-of-pocket costs by health condition. What are people’s out-of-pocket costs if they have cancer, suffer a stroke, or need rehab? How can people make an informed choice of an MA plan without this information?

    CMS should collect MA plan-level data to promote health equity

    CMS needs MA plan-level data to promote health equity or it needs to forbid insurers from offering more than one MA plan in a contract area.

    To echo the Center for American Progress, “CMS should consider including some dimension of equity as part of the MA star ratings program, which at the very least could be a reflection of whether MA plans are collecting adequate and stratifiable data.” And, “CMS should prioritize making any necessary adjustments to its race and ethnicity data collection processes given how central accurate underlying data is to the validity of monitoring for inequities.”

    Without oversight and enforcement, data requirements are virtually useless

    We know that tens of thousands of people each year in MA, if not hundreds of thousands, are dying needlessly or suffering greatly because Congress created a program that is impossible to oversee and the insurers have become so big and powerful, both legally and politically, that they can design their MA plans to maximize profits and violate contracts with near impunity.

    The data on health insurance violations reported on violationtracker.org speaks volumes.

    No other wealthy nation allows health insurers to behave as they will to deny and delay care or otherwise restrict care access as MA insurers are able to do. No other wealthy nation provides insurers with an incentive to maximize profits on the backs of their enrollees. Rather, they dictate when, how and where care is covered—and the price. That’s the way to ensure insurers do their job appropriately and protect people.

    A lot more data is urgently needed for adequate oversight. But, without tens of billions of dollars more, CMS will not be able to conduct effective oversight and enforcement. Insurer abuses will persist and vulnerable older adults and people with disabilities will suffer. Only much tighter regulation and non-discretionary automatic penalties for non-compliance will promote health equity and ensure MA enrollees get the care to which they are entitled.

    Conclusion

    This year alone, the government is projected to overpay insurers offering Medicare Advantage plans between $83 and $127 billion, wasting taxpayer dollars and driving up Medicare premiums, indicating serious design defects in the government’s capitated payment structure. Moreover, notwithstanding critical missing data, mounting evidence reveals serious deficiencies in MA’s coverage design, resulting in untold harm to a significant number of enrollees who need critical care.

    Rules and regulations, limited resources, and corporate health insurer power have kept CMS from collecting critical data, auditing plans adequately, and enforcing penalties. Rather, MA is growing quickly, and few people enrolled appreciate that they are taking a big gamble with their health. Medicare Advantage saves money for healthy people, but comes with serious costs and major limitations for the most vulnerable. Instead of pooling and spreading risk, the MA model allows insurers to fragment risk, burdening the sickest; the opposite of a proper insurance design.

    Traditional Medicare is far from perfect and needs improvements, including an out-of-pocket cap. But, it is far more cost-effective than MA. In sharp contrast to MA, Traditional Medicare pools and spreads risk. It is designed to ensure that the 10 percent of enrollees responsible for 70 percent of Medicare spending have quick and easy access to needed care. Traditional Medicare does not create obstacles to care, or second-guess enrollees’ treating physicians in order to maximize profits, much less withhold data in order to prevent appropriate oversight.

    We know that political pressures can prevent dramatic action, often when it is most necessary. We hold Congress largely responsible for refusing to act in meaningful ways to reform MA. And, we thank CMS for calling on the public to bring attention to MA’s limitations, as well as for improving MA as best it can, given so many constraints.

    We hear the nightmare Medicare “Disadvantage” and “Take Advantage” stories on the ground and struggle to sleep at night, concerned for the millions of vulnerable Americans who can’t afford supplemental insurance in TM and have no clue of the challenges they are likely to face in MA when they most need care. We will continue to highlight MA’s inequities and defects and advocate for major reforms to the program, alongside the Office of the Inspector General, the Government Accountability Office, the MedPAC, the Committee for a Responsible Federal Budget, the American Hospital Association, a growing number of Congresspeople and myriad others. We promise that we will not stop speaking out until the day our representatives in Congress unite to pass legislation that will protect MA enrollees and the fiscal integrity of the Medicare program.

    In the meantime, we appreciate your consideration of our comments. For any questions regarding this comment letter, please contact Diane Archer at [email protected].

    American Economic Liberties Project
    Be A Hero
    Center for Economic and Policy Research Center for Health and Democracy
    Center for Medicare Advocacy
    Just Care USA
    People’s Action
    Physicians for a National Health Program
    Public Citizen
    Puget Sound Advocates for Retirement Action
    Social Security Works
    Dr. Don Berwick, Former Administrator of the Centers for Medicare and Medicaid Services (CMS)

  • New nursing home staffing requirements are a step forward

    New nursing home staffing requirements are a step forward

    It has become increasingly clear that our federal government is not willing or able to enact laws and rules that go as far as necessary to protect consumers. Recently, the Centers for Medicare and Medicaid Services (CMS) issued final rules with regard to nursing home staffing requirements that are a huge step forward and yet not nearly enough, Jordan Rau reports for KFF Health News. Patient safety and adequacy of care remain a concern, even with these rules. 

    Under the new rules, most of the 15,000 nursing homes in the US will have to hire more nurses and aides, beginning in 2026. The nursing homes will, on average, need to offer 3.48 hours of care each day to each resident. Today, some four in ten nursing homes do not do so. But, many advocates do not believe that these rules will ensure that nursing homes deliver high quality care.

    Without a higher ratio of nurses and aides to nursing home residents, it is challenging for nursing homes to care for their patients, as we saw during the Covid epidemic. Instead, residents end up with bedsores, fall needlessly, are not properly diagnosed for their conditions or take more trips to the emergency room.

    At the moment, it’s not clear whether there are enough nurses and aides available for nursing homes to hire. Nursing homes tend to pay less for nurses than hospitals. And, aides can often earn more working in restaurants. If the worker shortage remains, the nursing homes will likely not comply with the new rule.

    CMS projects that its rules will cost nursing homes $6 million more a year. CMS does not plan to increase Medicare and Medicaid payments to cover these additional costs. The nursing home industry calls it an “unfunded mandate” and intends to see if it can persuade Congress (or likely the next Administration) to undo it.

    And, still, CMS is calling for nursing-home staffing levels that are less than excellent, according to the head of the Long Term Care Community Coalition. The rule is a step forward because the previous rule was not specific as to what constituted a “sufficient” staffing level, only that the staffing level be “sufficient.”

    To date, the Office of the Inspector General has found that many nursing homes do not meet many basic staffing requirements.

    Critics of the new CMS rule argue that it will lead to many nursing home closures as nursing homes will not be able to hire more workers. Both the cost of hiring them and the scarcity of workers present obstacles. But, a recent study found that, overall, nursing homes are doing extremely well financially. Owners are able to secure substantial profits through all kinds of shenanigans. A while back, the Kaiser Family Foundation explained how owners profit and advised avoiding chain nursing homes.

    Here’s more from Just Care:

  • Medicare Advantage plans get $16 billion increase in 2025

    Medicare Advantage plans get $16 billion increase in 2025

    The battle over how much more the administration will pay insurers offering Medicare Advantage plans in 2025 is over. According to the Centers for Medicare and Medicaid Services (CMS), insurers will get a $16 billion increase. The insurers are playing with the numbers to suggest they are getting a cut, when, as it is, they are receiving $83 billion more this year than they should be.

    The insurers were hoping that the CMS final rate notice, issued last week, would give them an increase over the CMS proposed rate. Social Security Works, People’s Action, Be a Hero, Public Citizen and many other advocates and experts called for Medicare Advantage rate cuts, given the massive overpayments to the insurers. Even with the massive overpayments, some insurers are denying and delaying care inappropriately and they are failing to pay money due hospitals, physicians, home health agencies, rehab facilities and nursing homes for services provided with their approval.

    It’s not clear when or how Congress will step in to address the insurer overpayments, inappropriate care denials, and failure to pay providers in Medicare Advantage. A recent story in Newsweek focuses on the fact that insurers are not paying nursing homes appropriately. The American Medical Association has not spoken out against the insurers offering Medicare Advantage for not paying physicians appropriately, though it has highlighted the sometimes deadly consequences of prior authorization, a tool the Medicare Advantage plans use to inappropriately delay and deny care.

    Meanwhile, the American Hospital Association continues to speak out about the failings of Medicare Advantage plans. And, many hospitals have cancelled their Medicare Advantage contracts.

    Will the insurers cut extra benefits in Medicare Advantage plans? Time will tell. It’s hard to believe they will. Many enrollees do not take advantage of them. They are a valuable marketing hook. Insurers are still making a fortune off of Medicare Advantage.

    Here’s more from Just Care: 

  • 33 experts call on CMS to continue reining in Medicare Advantage overpayments

    33 experts call on CMS to continue reining in Medicare Advantage overpayments

    February 29, 2024

    The Honorable Xavier Becerra, Secretary, U.S. Department of Health and Human Services, Washington, DC

    The Honorable Chiquita Brooks-LaSure, Administrator, Centers for Medicare and Medicaid Services, Washington, DC

    Mr. Jonathan Blum, Principal Deputy Administrator and Chief Operating Officer, Centers for Medicare and Medicaid Services, Washington, DC

    Meena Seshamani, MD, Deputy Administrator and Director, Center for Medicare, Centers for Medicare and Medicaid Services, Washington, DC

    Dear Secretary Becerra, Administrator Brooks-LaSure, Principal Deputy Administrator Blum, and Deputy Administrator Seshamani:

    The undersigned share a commitment to protecting and enhancing the Medicare program for all beneficiaries. Medicare Advantage (MA) now accounts for more than half of all Medicare enrollment. However, the rapid growth in MA enrollment reflects the unequal financing of MA versus traditional Medicare (TM) rather than superior performance by MA plans. In 2024, MedPAC estimates that Medicare will overpay MA plans by 23%, at least $88 billion, due to upcoding of diagnoses and favorable selection alone. That amounts to a staggering $2,700 more per beneficiary than the same beneficiary would cost TM. This subsidization and the resulting overpayments to MA are wasteful, unfair, and create a set of perverse outcomes. By fundamentally distorting the marketplace, unequal financing strongly pushes beneficiaries to choose MA over traditional Medicare for the wrong reasons. We strongly believe in giving beneficiaries a fair, even-handed choice between MA and TM and advocate for improving both programs.

    At the state level, the rapid growth of MA is distorting the insurance markets for dual eligibles, retirees and commercially covered lives. MA firms, financed by subsidies, are consolidating plans and owned primary care practices then using their increased market power to extract higher commercial rates at a state and regional level.

    In 2023, CMS finalized positive steps that began to rein in some of the major contributors to excessive MA subsidization by revising the MA payment formula in the CY 2024 Rate Announcement and finalizing the MA Risk Adjustment Data Validation (RADV) Rule. The Rate Announcement included a three-year phase-in of the V28 HCC risk adjustment model, which began to close some of the more egregious loopholes for upcoding. We vigorously applauded this important step and at a minimum urge CMS to continue with the planned three-year implementation schedule. We also recommend CMS take further steps to improve choices for beneficiaries by adopting other measures to reduce distortions in the Medicare coverage marketplace.

    Background:

    MA Overpayments have grown tremendously

    The MA industry continues to drive ever-higher revenues primarily by increasing their “risk scores,” which MedPAC reports are the largest source of overpayments. Inflated risk scores increase monthly MA payments by an estimated 20.1 percent (or 14.2 percent after accounting for the 5.9 percent statutory minimum adjustment). Per CMS, average MA risk scores are increasing approximately at a rate of 5% per year when measured using the 2020 V24 Model risk score model but by 3.3% under the V28 2024 Model. Upcoding not only distorts choices between MA and TM but also unfairly penalizes MA plans that do not engage in equally aggressive upcoding because they do not receive the same “revenue enhancements” that enable higher profits while offering somewhat more generous benefits. As recently documented by Kronick et al, some large MA firms, such as United Healthcare, are much more aggressive coders and drive much higher Risk Scores than their competitors. One 2024 Advance Notice comment letter, using data provided by United Healthcare in their own 2022 study, demonstrated that they submitted twice as many diagnoses as were submitted for a matched FFS population, positioning them to obtain as much as 34% more revenue.

    Over the past year researchers have elucidated even more drivers of MA overpayments. Lieberman et al demonstrated that favorable selection contributes an additional 14% in overpayments. Ryan et al demonstrated that favorable selection increases benchmarks resulting in 4% additional revenue over and above the Lieberman numbers. MedPAC concluded that favorable selection adds 9% in more overpayments. When added to the 14% from Risk Scores, they estimate that total overpayments will be 23% in 2024. These overpayments are added into the calculation of Part B premiums that all Medicare beneficiaries pay. 58% of these payments are considered Part B. The Beneficiary premium is set to cover 25% of all Part B expenses meaning beneficiaries will pay 15% of any overpayments. So, $13 B in 2024 and $220 B over 10 years will come directly from beneficiaries’ pockets.

    Despite CMS spending $15 B in 2024 quality payments, and over $60 billion since the Affordable Care Act, MedPAC continues to point out that “it is impossible to evaluate the quality of care in Medicare Advantage.” However, studies have shown that MA members are directed into networks of lower rated hospitals, skilled nursing facilities, and home health agencies. MA beneficiaries in need of complex cancer care have less access to it and worse outcomes. Mortality rates differ widely across MA plans with one study showing that 10,000 deaths annually result from beneficiaries unknowingly enrolling in poor performing plans. Other studies show that patients with costly and complex conditions are much more apt to disenroll from MA Plans, presumably because they are concerned about getting the care they need. But for most people choosing MA is a one-way street. All but four states allow medical underwriting of people returning to Medigap. The result is Medigap prices that are unaffordable for all but the wealthy.

    Once again, MA acts as a driver of inequities. This reality is also a major driver of the favorable selection in MA. People in TM who know they have a serious medical condition are much less likely to move into MA.

    Total MA Subsidies are greater than just Overpayments

    MedPAC estimates compare MA payments to what the same population would cost CMS under traditional Medicare coverage. But the subsidies we provide to MA are even greater. First, the legislated county and quality Bonus payments which are in addition to traditional Medicare costs, according to MedPAC, increase benchmarks by 8% and revenue by about 5.2%. Second, MA benchmarks include the cost of the “induced utilization” Medicare incurs as a result of the higher service use by the 90% of beneficiaries that have supplemental insurance. These higher medical costs are passed through to MA Plans as revenue because they are included in the benchmark. They have been estimated to add 11% more revenue to MA firms. Total subsidies, which is the incremental revenue provided to MA Plans above what they say they can provide Medicare benefits for, are likely in the range of 40%, or $140 B annually and $2 T over 10 years.

    MA exposes beneficiaries to significant out-of-pocket costs and plans avoid decreasing cost sharing

    MA is not first dollar coverage for most members. According to a United Health study MA members on average still pay for about 11% of the cost of their medical services. Despite being given the revenue to cover this in their premium, and despite rapidly increasing rebates due to risk score gaming, MA plans have not used their subsidized payments to improve cost sharing for members, presumably because as MedPAC says:

    “. . . doing so could induce greater service use among enrollees, as occurs among FFS beneficiaries with first dollar Medigap coverage.” In short, they maintain significant member coinsurance to further their aim of liming the use of services. The most significant area of impact is the 20% and higher MA coinsurance for high cost drugs used to treat cancer and other serious illnesses. These limited benefits have the added effect of deterring high-cost paents from enrolling.

    MA plans receive $15 Billion in Star-Rating Bonuses that do not meaningfully reflect quality

    Contrary to the original intent to provide incentives and reward exemplary performance, the CMS Quality Bonus Program (QBP) and the attendant Star Ratings neither provide beneficiaries with meaningful quality information nor reward plans for excellent performance. Indeed, the disproportionate share of 4-star and4.5-star plans reflect the “Lake Wobegon Effect”, where all plans are above average —not quality, as MedPAC has extensively documented.

    In line with the MedPAC recommendations for completely revamping the QBP, MA quality accountability should move away from overreliance on performance measurement by moving to a quality improvement approach. CMS and Medicare have been and can be even more of a force for the proactive improvement of the quality of health care for beneficiaries and, indeed, for all Americans. Unfortunately, Medicare’s longstanding, positive influence on health care quality has been compromised by various statutory mandates for implementation of pay-for-performance programs (P4P) throughout Medicare. Numerous quality experts have now concluded that two decades of providing financial rewards and penalties for specified, measured performance has failed to improve the quality-of-care provided to Medicare beneficiaries but has come with high direct and opportunity costs as well as added burden for MA plans and providers. As argued by Berenson and Skopec recently, it is time for a fundamental reconsideration of the reliance on measurement and P4P as the primary approaches in Medicare for assuring accountability for the quality-of-care provided to beneficiaries.

    Quality measurement can identify exemplary and substandard performance but cannot accurately distinguish gradations of acceptable care – the situation applicable to the large majority of MA plans. To achieve better quality across MA, Medicare payments should reward delivery organizations that achieve exceptional quality-of-care performance. Likewise, it makes sense to avoid rewarding, and, indeed, in some cases penalize organizations that perform poorly. However, penalties and rewards systems must include consideration of the particular challenges of organizations addressing the needs of especially challenged populations. MA plans with demonstrably substandard performance on quality measures should be subject to direct sanctions resulting from more vigilant program oversight by CMS. Further, program oversight should more assertively assure MA plan administrative compliance with program requirements rather than assuming that the QBP will provide the necessary discipline for MA plans to adhere to program expectations and requirements. Given the apparent success of the CMMI funded “Partnership-for-Patients” in the last decade and the more recent success of the Million Hearts trial, MA plans and their contracted and employed providers should be expected to participate actively in provider-payer collaboratives. MA plans participating in these collaboratives would be expected to provide financial support for activities required by the particular QI model, often recouping their investment in improved quality, with decreased spending.

    We believe that CMS should support a major project, perhaps through a National Academy of Sciences, Engineering, and Medicine consensus study, to review and recommend revision of the current reliance on P4P across Medicare programs and consider a shift in emphasis to adoption of quality improvement projects applicable to the majority of providers and MA plans. In considering revision of the measurement system, the expert study should consider the feasibility of shifting the focus to reflect state-of-the-art inclusion of patient ratings, accurate assessment of clinical outcomes, and a focus on what truly matters to patients, families, and communities. In considering adoption of quality improvement initiatives, featuring multi-party collaboratives, the study should specify the appropriate, complementary roles of MA insurers and providers working together to achieve measured improvement and align the approach with that of their ACO programs.

    MA grows because of inequitable subsidies, not better care

    MA proponents cite their ability to deliver care for less as the basis for their success. There is a small number of MA plans that have a history of innovative care practices designed to improve outcomes for their members. Many of these are the descendants of the original group model HMOs that were part of the early Medicare privatization pilots. There are also thousands of employees in MA plans who are deeply committed to improving the lives and health of their members. But increasing revenue in MA is much easier than improving care, and driving revenue has replaced improving care as the central focus of the MA industry. It is the large subsidies – $2,700 per beneficiary – that are the source of the improved benefits and lower premiums, not savings from better care.

    MA’s rapid growth results from a very unlevel playing field. TM does not receive subsidies to provide the limited Dental, Vision or Hearing coverage MA plans offer. Most significantly, TM does not limit beneficiaries’ financial exposure because the program’s 1960’s-era indemnity benefit package (which we believe needs to be modernized) has no out-of-pocket cap and a coinsurance rate averaging 16%. While people can buy supplemental insurance to eliminate this risk, many, especially beneficiaries with lower income, cannot afford hundreds of dollars in monthly premiums to purchase Medigap plans. As a result of direct subsidies, MedPAC estimates that 99 percent of beneficiaries have the opportunity to purchase zero-premium MA/PD plans that offer prescription drug coverage and somewhat enhanced benefits. In assessing whether the growth of MA enrollment constitutes a reasonable proxy for the quality of its plans, imagine two ice cream trucks where one charges a reasonable price while the other gives ice cream away for free. The higher market share of the second results from free ice cream, not better ice cream!

    But, as described above, zero premium does not mean zero cost. MA members still face significant OOP expenses. If they have significant illness these can mount up to the average OOP cap of $5,000 or even beyond in some Plans up to the $8,000 – $13,000 maximum in-network and Out of Network OOP caps that CMS allows. And as noted this is most meaningful for patients who need high cost part B drugs for treatment of cancer and other serious illnesses. This is why MA members continue to cite the cost of services as reasons for not obtaining care.

    Massively subsidizing Medicare Advantage leads to perverse policy outcomes

    Assessing aspects of Medicare and MA should not be done in isolation. A view considering the greater impacts on our healthcare system reveals unintended—and highly undesirable— policy outcomes that one would never seek directly.

    1. Increasing numbers of medically and financially vulnerable individuals are driven into limited networks of lower quality providers and then subjected to administrative procedures designed to constrain access to needed care, which threaten the health and financial security of beneficiaries.

    2. Because lower income individuals and, disproportionately, people of color, are most in need of the highly subsidized MA benefits, we are spending more to push historically marginalized populations into lower quality care, thereby increasing the healthcare inequities the Administration is rightfully committed to eliminating.

    3. Inequitable MA subsidies have resulted in a vast administrative preauthorization and claims denial superstructure that permeates the delivery system delaying and distorting care delivery, denying payment to providers, increasing administrative complexity and costs for all segments of the system.

    4. Overpaying MA plans funds the acquisition of primary care practices by for-profit firms driven by financial results not health outcomes.

    5. Overpaying MA increases total Medicare spending, threatens the sustainability of Medicare itself, and is destabilizing traditional Medicare through unfavorable selection and the decline in beneficiaries making fee-for-service spending no longer a useful benchmark that is representative of the Medicare population as a whole.

    6. We will take $15 billion in 2024 and $210 B over the next 10 years from the pockets of seniors and people with disabilities via higher Part B premium to make these overpayments to MA firms.

    Recommendations:

    Use Current administrative authorities to rein in MA subsidies

    We encourage HHS and CMS to act using their current authorities to create a more level playing field for Medicare beneficiaries while also buttressing the financial sustainability of the Medicare program. Many opportunities to reduce MA overpayments remain that can be acted upon now:

    • Connue without interrupon the three-year phase-in of the V28 2024 HCC risk adjustment system. While Plans argue that reducing overpayments will require reducon in benefits, research findings show that the effects would be modest, at best.

    • Further revise the HCC model considering approaches as recently recommended by Kronick et al.

    • Explore other approaches using modern stascal and ML techniques to develop an alternave to HCC that could improve accuracy especially for lower cost patients.

    • Increase the Coding Intensity Factor adjustment to MA payment, as has been long recommended by MedPAC, above the 5.9% statutory minimum, and customize it to firms that are very high coders.

    • Explore approaches to creating a new risk adjustment system that is resistant to gaming. As examples, alternative approaches could include extended beneficiary surveys, MA plan/contract-specific coding intensity factors, reducing MA plan payments for those enrollees that recently switched to MA based on the prior year’s risk-adjusted spending.

    • Eliminate contractual arrangements and incentive systems that MA plans use to reward providers for adding more diagnostic codes that result in higher premiums including percentage of premium risk contracts.

    • Further revise the way CMS pays MA plans including changes to the benchmarking system to address the multiple documented sources of overpayments such as favorable risk selection.

    • Revise the QBP to accurately reflect local MA plan information rather than aggregate findings and incorporate corrective action and sanctions for MA plans with 1-, 2- or 3-star ratings. Large employers, including state governments, need local data to understand the performance of the Plan retirees are actually entering. Only having performance at the national level can cloud local or regional concerns.

    • CMS should support a major project, perhaps through a National Academy of Sciences, Engineering, and Medicine consensus study, to review and recommend revision of the current reliance on P4P in MA and across Medicare programs.

    • Assure the long-term viability of the Accountable Care Organization movement, drawing lessons from experience to date

    • Explore a CMMI model that would combine an improved traditional Medicare benefit with the use of ACOs and other alternative payment models to evaluate potential to decrease CMS expenditures by decreasing migration into MA

    Work directly with Congress to create a level playing field for real beneficiary choice:

    We believe that the traditional Medicare benefit package should be modernized. An optimal approach would offset the costs of an improved traditional Medicare benefit package with some of the savings from reduced MA subsidies. By making traditional Medicare a viable alternative for many who believe they cannot afford it today, these changes would be an important step towards meeting the Administration’s goal of advancing health equity. The cost of these improved benefits would flow into MA Benchmarks thereby blunting the MA lobby’s contention that reducing subsidies would require a reduction in benefits. In addition, work with Congress to revise the MA quality bonus program (QBP) and CMS’s approach to MA county adjustments to make them both budget neutral, as is required for all other Medicare bonus payments.

    We want to thank you and your dedicated and highly professional teams for the outstanding efforts to date to improve coverage and care for all. Feel free to contact us at any time if we can be of any assistance.

    Sincerely,

    Scot Armstrong, Former President & CEO, Group Health Cooperative, Former Commissioner, Medicare Payment Advisory Commission

    Richard J. Baron, MD, CEO and President, ABIM Foundaon, Former Director, Seamless Care Division, CMMI, Centers for Medicare and Medicaid Services (CMS)

    Elaine Batchlor, MD, CEO, MLK Community Healthcare, Los Angeles, California

    Robert Berenson, MD, Instute Fellow, Urban Institute, Former Acting Deputy Administrator, CMS, Former Vice-chair, MedPAC

    Susan E. Birch, MBA, BSN, RN, Director, Washington State Health Care Authority

    Donald Berwick, MD,President Emeritus and Senior Fellow, Institute for Healthcare Improvement (IHI), Former Administrator, CMS

    Maureen Bisognano, President Emerita and Senior Fellow, Institute for Healthcare Improvement

    Lawrence Casalino, M.D., Ph.D. Professor, Emeritus of Populaon Health. Livingston Farrand Professor of Public Health, (2008-2022), Chief, Division of Health Policy and Economics, (2008-2021), Weill Cornell Medical College

    Tina Castanares, MD, Principal, Castanares Consulting, Joseph Damore, LFACHE, President and CEO, Damore Health Advisors

    Andrea M. Ducas, MPH, Vice President, Health Policy, Center for American Progress

    Michael Eliastam MD, MPP, FACP

    Ezekiel J. Emanuel, M.D., Ph.D., Levy University Professor, Vice Provost for Global Initiatives, Co-Director, Healthcare Transformation Institute, Perelman School of Medicine and The Wharton School, University of Pennsylvania, Judy Feder, Professor and former Dean, McCourt School of Public Policy, Georgetown University

    Elliott Fisher, MD, MPH, Professor of Medicine and Health Policy, The Dartmouth Institute, Senior Fellow, IHI

    Lisa K. Fitzpatrick, M.D., MPR, MPA, CEO Grapevine Health, Former Chief Medical Officer, Medicaid, Washington, DC

    Emily R. Gee, PhD, Senior Vice-President, Inclusive Growth, Center for American Progress

    Richard J. Gilfillan, MD, Independent Consultant, Former Deputy Administrator, CMS, Former Director, CMMI, Former CEO, Trinity Health

    Merrill Goozner, Editor & Publisher of GoozNews.substack.com, Former Editor, Modern Healthcare

    Tia Goss-Sawhney DrPH, FSA, MAAA, Chief Operating Officer, Highlight Health

    Paul Ginsburg, PhD, Senior Fellow, USC Schaeffer Center, Professor, USC Price School of Public Policy, Nonresident Senior Fellow, Brookings Inst., Former Vice-Chair, MedPAC

    Frederick Isasi JD, MPHl Former Executive Director, Families USA

    Glenn Hackbarth, Former Chair, MedPAC, Former Deputy Administrator CMS

    Gary S. Kaplan MD, FACP, FACPE, CEO Emeritus, Virginia Mason Health System, Virginia Mason Franciscan Health

    Steve Lieberman, President, Lieberman Consulting Inc., Senior Non-Resident Fellow – USC Schaeffer Center, Non-Resident Fellow – Brookings Institution

    Peter Lee, Senior Scholar, Stanford University, CERC, Former Executive Director, Covered California, Former Deputy Director, Center for Medicare and Medicaid Innovation, CMS

    Michael R. McGarvey, MD, Chair, Board of Directors, New York County Health Services Review Organization

    John C (Jack) Lewin, MD, Administrator, Hawaii State Health Planning and Development. Senior Advisor to Governor Green, Honolulu, Hawaii, Founder and CEO, Lewin and Associates LLC, New York, NY

    Arnold Milstein, MD, Medical Director, Purchasers Business Group on Health, Clinical Excellence Research Center Director, Stanford University Former Commissioner, MedPAC

    Roy Schutzengel, MD, MBA, Former Medical Director, Integrated Systems of Care Division, California Department of Health Care Services

    Cary Sennett, MD, PhD, Principal, The Sennett Consulting Group, Former Executive Vice President, National Committee on Quality Assurance

    Bruce Vladeck, PhD, Former Administrator, Healthcare Financing Administration, U.S. Department of Health and Human Services

    Judy Zerzan-Thul, MD, MPH, Chief Medical Officer, Washington State Health Care Authority, Former Chief Medical Officer,Colorado Dept of Health Care Policy and Financing

     

  • How will the administration address Medicare Advantage overpayments in 2025?

    How will the administration address Medicare Advantage overpayments in 2025?

    When the Medicare Advantage program was enacted, health insurers claimed it would reduce Medicare spending. But, Medicare Advantage has always cost significantly more per person than Traditional Medicare, largely because of a defective payment system that the insurance industry has been able to game. In an election year, will the administration finalize its proposed rate increase for 2025 as is or succumb to pressures from the insurers that will enhance their profits while weakening Medicare?

    The Centers for Medicare and Medicaid Services (CMS) says that payments to MA plans will increase 3.7 percent ($16 billion) from 2024 to 2025. The insurance industry falsely claims CMS’ proposed adjustments to a defective coding system would result in a 0.2% pay cut in 2025 because it doesn’t factor in the 3.8 percent increase it will receive from gaming the payment system. The defective payment system leads to $88 billion in overpayments to insurers offering Medicare Advantage this year alone and rises each year.

    The insurers are also posturing. They claim that MA enrollees are using more health care services, so the proposed rule could lead to higher costs and fewer benefits. Insurers can always claim that a payment rule could lead to cuts; the additional benefits the insurers offer are within their control, which is the problem. But, there is every reason to believe insurers will not cut benefits next year, as the insurers are profiting handsomely from MA and want to increase enrollment in MA. Last year, CMS still caved and gave the insurers a 3.3 percent rate increase, after proposing a 1 percent increase.

    If CMS is listening to the Medicare Payment Advisory Commission, experts, advocates and other independent advisors, it must hold the line on its proposed rate for 2025 or reduce it further, in order to protect the Medicare Trust Fund and the Medicare program. Unfortunately, the rule does not stop the insurers’ “upcoding” that results in significantly higher payments for enrollees with multiple diagnostic codes, who do not receive additional care. Moreover, CMS continues to pay MA plans based on the costs of care for Traditional Medicare enrollees, even though Traditional Medicare enrollees tend to be significantly less healthy, leading to an additional 14 percent higher MA payments.

    Advocacy groups submitted more than 25,000 comments opposing any rate increase and suggesting further cuts are in order. Scores of independent experts submitted similar comments. The insurers were able to get 13,000 people to offer a bunch of pablum to CMS about the proposed rate for 2025. CMS will finalize the 2025 Medicare Advantage payment rate rule on April 1.

    CMS should follow the advice of independent experts:

    • Create a new payment system that “is resistant to gaming.”
    • Don’t allow the insurers to benefit from the fact that traditional Medicare enrollees are less healthy than MA enrollees.
    • Advocate for Congress to strengthen traditional Medicare so that it is on a more level playing field with MA.

    If CMS does not stick to its guns on the rate increase, people can expect to see Medicare premiums and out-of-pocket costs increase even further as traditional Medicare fades away and does not impose any competitive pressure on the MA plans. Without traditional Medicare in the mix, don’t be surprised when Medicare Advantage benefits and networks shrink significantly and enrollees’ costs rise.

    Here’s more from Just Care:

  • Three big Medicare access to care issues put vulnerable people at serious risk

    Three big Medicare access to care issues put vulnerable people at serious risk

    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: