Tag: CMS

Humana sues government in effort to keep billions in overpayments
For no good reason, our federal government pays Medicare Advantage plans a set amount per enrollee regardless of the amount these health plans spend on care and regardless of whether they inappropriately delay and deny care and deny payments to providers. Moreover, our government pays the insurance companties extra if they add diagnosis codes to patient records, even when patients have not received treatment for those diagnoses. Now, FierceHealthcare reports that Humana is challenging the government’s new standards for getting some of the overpayments back.

It seems reasonable that if the government found that it was overpaying Medicare Advantage plans, it could get its money–taxpayer dollars–back. Not so. It turns out that the government’s payment system not only overpays Medicare Advantage plans collectively tens of billions of dollars a year, but it struggles to recoup any of these overpayments.

Humana’s recent lawsuit challenges the government’s new Medicare Advantage auditing standards. It argues in its lawsuit against the Centers for Medicare and Medicaid Services (CMS), which administers Medicare, that if the government recouped overpayments, Medicare Advantage plans and their enrollees could be harmed.

Put simply, Humana likes the overpayments and wants to keep them. As it is, the government’s new standards for recouping overpayments have an extremely short look-back period, to 2018. So, billions in government overpayments through 2017–our Medicare dollars– already belong to the health insurers.

Humana’s legal challenge centers on the fact that the government’s final rule regarding its ability to recoup overpayments to Medicare Advantage plans does not allow the Medicare Advantage plans to keep any of the overpayments they receive. “CMS abused its discretion by concluding that retroactive application of the final rule is necessary to comply with statutory requirements,” says Humana.

If Humana prevails, it is yet another reason why the Medicare Advantage payment system needs an overhaul. It is wasteful and inefficient.

Here’s more from Just Care:
September 7, 2023
Government can easily cut $500 billion in Medicare Advantage waste
In an opinion piece for The Boston Globe, Andrew Ryan and David Meyers expose the waste and fraud in Medicare Advantage, the part of Medicare administered by corporate health insurers. While our divided Congress has little power to fix massive overpayments to these insurers, they explain how the Centers for Medicare and Medicaid Services (CMS) can cut $500 billion in waste over the next decade, without jeopardizing patient care.

Ryan and Meyers explain that the waste and fraud in Medicare Advantage (MA) stem from three “big choices by CMS that allow the profiteering to go unchecked.” If the profiteering continues, it threatens to deplete the Medicare Trust Fund, endangering the Medicare program. In the meantime, it drives up Medicare premiums not only for people in Medicare Advantage but for people in Traditional Medicare, which is administered directly by the federal government.

Ryan and Meyers find that, overall, people in Medicare Advantage plans are less ill than their MA medical records indicate. Moreover, they are healthier than people in Traditional Medicare. CMS can change the way it calculates MA payments, so that Medicare Advantage plans cannot game the system and they are not overpaid.

Right now, Medicare Advantage plans do “chart reviews” of their enrollees. When they do, CMS permits Medicare Advantage plans to change their enrollees’ diagnoses codes to make them look less healthy than they are and increase their government payments.

Medicare Advantage plans also do home assessments of some of their enrollees, again with an eye to adding diagnoses codes to their medical records or otherwise making their health seem poor. Ryan and Meyers have found that ending the MA plans’ ability to change or add diagnosis codes through chart reviews and home assessments and/or prioritizing diagnosis codes from physician-patient encounters when calculating payments could reduce Medicare Advantage overpayments by $14.1 billion a year.

CMS should also be auditing Medicare Advantage plans far more often than it does to protect against overpayments. It needs resources to undertake these enforcement efforts, but they should more than pay for themselves. The IRS returns $12 for every dollar it spends on enforcement. If CMS shifted resources to enforcement, it could reduce Medicare Advantage overpayments by $10 billion a year.

Lastly, CMS should not be using the average spending on individuals in Traditional Medicare as a benchmark for payments in Medicare Advantage plans. Individuals in Traditional Medicare are in poorer health than individuals in Medicare Advantage. If CMS appropriately adjusted its benchmark to reflect these health differences, it could save more than $40 billion a year.

If CMS undertook these three fixes, it could easily save $50 billion a year. That money could go to adding an out-of-pocket limit in Traditional Medicare. But, there’s a catch.

The Republicans in Congress do not appear to care about this massive Medicare Advantage waste. The health insurance industry likely will come out strong to support Republican candidates for President and Congress if the Biden administration attempts to make these fixes. That threat tends to keep the Democrats in Congress and the Administration from acting.

Silence is not an option if we want to strengthen Medicare and keep corporate health insurers from continuing to raid its Trust Fund. Let the Biden administration’s David, take on the corporate health insurers’ Goliath. The battle to strengthen Medicare should be worth waging.

Here’s more from Just Care:
August 28, 2023
How former CMS head, Tom Scully, privatized and destroyed Medicare
David Dayen reports on former Center for Medicare and Medicaid Services (CMS) head, Tom Scully, privatized and destroyed Medicare for The American Prospect.

Back in 2002, Scully, the administrator at CMS under President George W. Bush, attacked the incentives in the Medicare program. At the time, he was focused on hospital incentives to inflate patient costs, saying “People follow the money, and they’ll find the little niches in the program and they’ll game it, and that’s what happened here.”

Scully, himself, has taken advantage of these “niches” since leaving government in 2003 for private equity. Scully’s view about health care is Darwinian. People should pay out of pocket for their health care, as they do for their vegetables–survival of the fittest–with help only for the poor.

Scully doesn’t recognize the value of Medicare negotiating prices for physicians and hospitals. Of course, that’s what has kept Medicare spending down for older Americans and people with disabilities. It’s also one key way other countries get value from their health care systems. In Scully’s view, if you get sick, you should pay for it.

It’s thinking like Scully’s that has pretty much destroyed our health care system. Physicians and patients have suffered as private equity and big corporations have seen their profits soar. “Scully’s fear of big-government price-fixers has led to the triumph of big private profit-takers, at the cost of doctors, nurses, and patient care.”

The corporate takeover of health care has also made navigating the system challenging. It’s now so complex. Choice and competition are meaningless. They have not improved quality and they have only increased costs. Unlike with airline travel, restaurants, housing or automobiles, you have virtually no idea if the health plan you choose will deny and delay your care and endanger your health. All you know is that there’s a decent chance that your insurer will not cover your care.

Health care corporations are in business to help their investors first and foremost. And, in the health care space, they can do so pretty easily, with little accountability, by simply extracting money from the system. Scully knows this full well and helped conceive, design and implement the algorithms that now power NaviHealth–a software AI system that helps insurers to keep more of their government payments by denying or limiting home health, nursing and rehab coverage.

Scully sold NaviHealth before it was bought by Optum, a division of UnitedHealth. He then went on to push Congress to allow for-profit PACE programs and to invest in InnovAge, which was buying up PACE programs. Soon after, CMS addressed allegations that InnovAge was denying thousands of PACE patients medically necessary services and suspended enrollment in many of InnovAge PACE programs for a time.

As former head of the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services, Rick Gilfillan, explains: “When you privatize social goods like health care, you end up getting the worst of both worlds. Because it’s seen as a public good, you can’t let the marketplace operate as it normally would … you get captured regulatory processes that end up facilitating the extraction of wealth by the private sector.”

Here’s more from Just Care:
August 1, 2023
New study finds you can’t meaningfully choose among Medicare Advantage plans
You’ve probably heard me say this before, but I’ll say it again: The less corporate health insurers spend on your care, the more of your premium dollars they can keep. What’s worse is that states and the federal government generally do not begin to have the resources to protect Americans from health plans that inappropriately refuse to cover needed care. Not surprisingly, there’s a new report out from the Urban Institute finding that the federal government’s star-rating system for Medicare Advantage plans neither promotes quality nor helps people distinguish effectively among their Medicare health plans choices.

In other words, if you’re in a Medicare Advantage plan or thinking about enrolling in one, keep in mind that the insurance companies offering these plans have both a financial incentive to inappropriately delay and deny your care and the ability to do so with near impunity.

The Health and Humans Services’ Office of the Inspector General has now issued two reports finding that many Medicare Advantage plans engage in inappropriate delays and denials of care and coverage. The federal government, through the Centers for Medicare and Medicaid Services (CMS), is charged with overseeing these health plans and helping you make an informed choice among them. But, it is not disclosing important information you need to make an informed choice.

What should you do to avoid unnecessary delays and denials of care and coverage? If you can afford traditional Medicare, you should not face barriers to care or inappropriate delays and denials of coverage. There is no corporate health insurer coming between you and your doctors. But, if you don’t have Medicaid or supplemental retiree insurance to fill gaps in your Medicare coverage, you will need to buy “Medigap” supplemental coverage.

If you opt for a Medicare Advantage plan to save the cost of supplemental insurance, keep in mind that a health plan with a five star rating may inappropriately delay or deny your care. Here’s why, according to the Urban Institute’s latest report:
- The rating system is based on an overall assessment of several Medicare Advantage plans an individual corporate health insurer offers. So, if one of those plans is terrible, it could still get a four or five-star rating if others of the plans are deemed to offer good care.
- The Centers for Medicare and Medicaid Services (CMS) does not take account of certain deficiencies with Medicare Advantage plans in its star ratings, including rates of inappropriate delays and denials of care and coverage.
- CMS inflates its scores, giving high star ratings too often.
- CMS does not focus its star-rating measures on whether Medicare Advantage plans meet the needs of people with costly and complex conditions. Because health insurance is about protecting people from unforeseen health problems, this is a serious flaw.
Keep in mind that insurance should be about covering your unforeseen health care needs. if you get sick and need costly care, your out-of- pocket costs in a Medicare Advantage plan can be as high as $8,300 for in-network care, this year alone.

Advocates are working hard to get CMS to publish delay and denial rates of individual Medicare Advantage plans. Some plans, we are told, have problematically high denial rates. For sure, those health plans should be avoided and the government should have a duty to, at the very least, let you know about them, as well as to penalize them heavily. If Medicare Advantage plan are jeopardizing the health and well-being of their enrollees, the government should be canceling their contracts.

Here’s more from Just Care:
July 12, 2023
Don’t assume a five-star Medicare Advantage plan will provide the care you need
Laura Beerman writes for Health Leaders on the flaws in the Medicare Advantage star-rating system. If you asked me, I’d tell you it’s a farce. The gaming that goes on to get four and five-star ratings is unacceptable. And, even with a five-star rating, the Medicare Advantage plan may be engaged in widespread and persistent delays and denials of care. Don’t assume a five-star Medicare Advantage plan will provide you with the care you need.

You can’t know whether a particular Medicare Advantage plan will endanger your health if you need costly and complex care, in part because the government hides information about plans engaged in bad acts. While you should avoid Medicare Advantage plans that do not have four or five-star ratings, you are taking a huge gamble even if you sign up with Medicare Advantage plans that have four and five-star ratings. These ratings do not reflect whether you will be covered for care from top flight doctors and hospitals or how much hassle you will face getting the care you need. And, that’s what you should care about when choosing a Medicare Advantage plan.

The health insurers offering Medicare Advantage tend to love the star-rating program. If they can get the stars, they earn huge additional revenue from the government. And, believe it or not, the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare Advantage, allows the insurers to bundle together several Medicare Advantage plans when applying for star-ratings. So, if one Medicare Advantage plan performs poorly based on the measures CMS uses to give stars, it can still “look” good in terms of the number of stars it has.

If you don’t believe me, just read this piece by two former leaders at CMS: T he Emperor Has No Clothes: “[T]he Five-Star program, while well intended, primarily creates a ‘performing to the test’ result rather than solid and important quality improvements in outcomes.”

In fairness, CMS has gotten a bit tougher in its standards for doling out five and four-star ratings to Medicare Advantage and Part D prescription drug plans. But, not nearly tough enough. Nor has CMS created standards that would actually reflect whether a Medicare Advantage or Part D plan is engaged in massive inappropriate delays and denials of care and coverage or does a good job of managing your care. More than half of all Medicare Advantage plans in 2023 had a four or five-star rating!

Alignment Health, Elevance Health, Humana, and UnitedHealthGroup all received four or five-stars for their Medicare Advantage plans, as did Kaiser Permanente. Again, don’t assume much positive about these plans when it comes to whether they are covering their enrollees’ care as required under their contracts.

Aetna Medicare Advantage plans fared worse than others with only 21 percent of its Medicare Advantage plans receiving four or five-star ratings. Should you avoid Aetna Medicare Advantage plans with three-star ratings? It’s not clear, but probably. They are being paid as much as $1 billion less in 2024 because of the lost stars, which means they will have less money to spend on your care.

MedPAC, the independent agency that oversees Medicare Advantage quality, has said several times in its annual report to Congress: “[T]he Commission has been increasingly concerned that Medicare’s approach to quality measurement is flawed because it relies on too many clinical process measures.” In 2023: “Over the years, the Commission has determined that the QBP [Quality Bonus Program] is flawed and does not provide a reliable basis for evaluating quality across MA plans in meaningful ways…”

Here’s more from Just Care:
June 8, 2023

You still can’t trust Medicare Advantage plan provider directories

Back in 2019, I wrote a post for Just Care on why you can’t trust Medicare Advantage plan provider directories. Unfortunately, you can’t trust their ads, their sales agents, the quality of the health care providers in their networks or their coverage policies either. You are throwing darts when choosing a Medicare Advantage plan.

What’s particularly disturbing is that notwithstanding years of government oversight identifying untrustworthy provider directories, these directories remain untrustworthy. The Centers for Medicare and Medicaid Services, CMS, which oversees Medicare Advantage, has done little to hold Medicare Advantage plans to account for their failure to keep their directories accurate.

The Senate Finance Committee is looking into Medicare Advantage plans with “ghost networks.” Ghost networks are, as their name implies, haunting and unreal. They are in-network providers listed in Medicare Advantage plan provider directories who are not available to provide care. The Finance Committee issued a report on ghost networks for mental health providers.

No one knows for sure how common these ghost networks are, but Senate Finance Committee Majority staff found a lot of ghosts in a secret shopper study of mental health providers in Medicare Advantage plans. Out of 120 calls staff made, they were only able to make appointments 18 percent of the time. The inaccuracy rate was more than 80 percent. The vast majority of providers listed were either not able to be reached, out of network, or not taking new patients.

Some plans did better than others and availability was better in some states. But, in Oregon, Chairman Wyden’s home state, staff could not make an appointment at all. In Colorado, they were able to make an appointment half the time. In some cases though, appointments were available only many months down the road. Moreover, some offices required additional information before scheduling an appointment; Senate Finance staff could not confirm whether appointments would be scheduled once that information was provided. If not, the provider directories would only have been accurate 13 percent of the time.

Senate Finance is suggests minor steps to correct what can be a huge issue for Medicare Advantage enrollees in need of critical care. It is also a persisting issue. Rather than recommending an open network in any MA plan with inaccurate provider directories–the only fair solution to ensure MA enrollees access to needed care–they want more CMS oversight and financial penalties.

Given mental health parity laws and the fact that one in five adults–nearly 60 million Americans–have a diagnosable mental health illness, access to mental health providers should be easy. Without treatment, people often suffer considerably and can become increasingly ill or even die.

In their report, staff did not name the MA plans they looked into, let alone the names of the worst actors, which would be helpful information for people deciding among MA plans, particularly people with mental health needs. How is it that we know more about differences among restaurants and refrigerators than we do about Medicare Advantage plans?

Here are the Finance staff findings on the rate of ghost listings by state:

Appendix Table 1. Overall and By State Call Results

State	No Contact	Yes Contact	Successful Appointments	Ghost Listings
OH	35%	65%	25%	75%
PA	10%	90%	15%	85%
OR	30%	70%	0%	100%
MA	45%	55%	10%	90%
CO	25%	75%	50%	50%
WA	50%	50%	10%	90%
Total	33%	68%	18%	82%

May 3, 2023

Experts comment on CMS proposed payment changes to Medicare Advantage plans

February 27, 2023

Honorable Xavier Becerra
Secretary of Health and Human Services Washington, DC

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

Dear Secretary Becerra and Administrator Brooks-LaSure:

The policy changes for Medicare Advantage payment proposed by CMS in the “Calendar Year 2024 Advance Notice with Proposed Payment Updates for the Medicare Advantage and Part D Prescription Drug Program” constitute important advances. These improvements are long overdue and badly needed to assure appropriate financial payments and stewardship for MA funds, fair payments to enable excellent care for sicker patients, sustainability of the overall Medicare program, and security for all beneficiaries. We support CMS’s finalizing these proposed MA payment changes.

MedPAC has estimated that in 2023 there will be $27 billion in excessive and unwarranted payments to MA Plans. Others have projected these overpayments will cost taxpayers $600 billion over the next 8 years. Beneficiaries will ultimately directly shoulder approximately 14% of this, almost $90 billion in increased Part B premiums.

The primary mechanism by which MA plans harvest these profits is by increasing the number of diagnoses recorded for their beneficiaries. Problems with the current CMS Hierarchical Conditions Category (HCC) system have been well documented for years. Under the coding rules, CMS pays plans more for beneficiaries with many diagnostic codes that have little or no real connection to patients’ health conditions and needs, costs of their proper care, or true illness severity. Some of the codes overused by MA plans identify asymptomatic disease that may represent future risk but are not contributors to current year expenses. Because the financial value of each HCC is based on Traditional Fee-for-Service Medicare, in which fewer codes are submitted, every additional code drives excess payments.

The hunt for more codes is distorting the actual delivery of care. It is not primarily a case of bad actors or fraud. It is a broken system that rewards questionable behavior like house calls to do lots of screening exams looking for asymptomatic diseases. While it is possible that these exams may occasionally pick up an unknown problem that needs treatment, the motivating factor is disease coding not preventive care. Furthermore, if an MA Plan does not participate in the game of adding more codes, they suffer in the marketplace as their products become uncompetitive because they have less revenue to support more generous benefits.

CMS now proposes to decrease the coding revenue opportunities by eliminating some HCC’s that have been abused and standardizing the prices associated with categories of codes to avoid upcoding for some conditions. The net result is projected to be a 1% increase in payments in 2024. In practice, the changes will be concentrated among MA plans and providers that are using the eliminated codes or adding more codes per patient. The proposed changes will leave the MA Plans, in aggregate, in a strong financial position while penalizing those who game the risk adjustment system. Efficient, ethical, and cost-effective providers will continue to be adequately reimbursed to deliver high quality care.

Continued overpayment to MA Plans represents a fiscally unsustainable long-term policy. Stakeholders should support CMS in these proposed reforms. The best answer is for MA plans, themselves, to become constructive partners in major coding and payment reforms.

Sincerely,

Scott Armstrong
Former President & CEO
Group Health Cooperative
Former Commissioner, Medicare Payment Advisory Commission (MedPAC)

Richard J. Baron, MD
CEO and President, American Board of Internal Medicine Former Director, Seamless Care Division
Center for Medicare and Medicaid Innovation, CMS

Elaine Batchlor, MD
CEO MLK Community Healthcare

Robert Berenson, MD
Institute Fellow, Urban Institute
Former Acting Deputy Administrator, CMS
Former Vice-chair, Medicare Payment Advisory Commission (MedPAC)

Donald Berwick, MD
President Emeritus and Senior Fellow, Institute for Healthcare Improvement Former Administrator,
Center for Medicare and Medicaid Services

Lawrence Casalino, M.D., Ph.D.
Professor Emeritus of Population 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

Rima Cohen
Founder & Principal, Rima Cohen Strategies Former Counselor for Health Policy, HHS Secretary

Zack Cooper
Associate Professor of Public Health and Economics, Yale University

Joseph Damore, LFACHE President and CEO Damore Health Advisors

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

Alain Enthoven
Marriner S. Eccles Professor of Public and Private Management (Emeritus) Graduate School of Business
Stanford University

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

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

Victor Fuchs, PhD
Henry J. Kaiser, Jr. Professor Emeritus Stanford University

Richard J. Gilfillan, MD
Independent Consultant
Former Deputy Administrator,
Center for Medicare and Medicaid Services Former CEO, Trinity Health

Paul Ginsburg, PhD
Senior Fellow, USC Schaeffer Center Professor, Practice of Health Policy and Management
USC Price School of Public Policy Nonresident Senior Fellow, Brookings Institution
Former Vice-Chair, Medicare Payment Advisory Commission

Sherry Glied, PhD
Dean and Professor
Robert F. Wagner Graduate School of Public Service, New York University
Former Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services

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

Glenn M. Hackbarth, JD, MA
Former Chair, Medicare Payment Advisory Commission (MedPAC)

George Isham, MD, MS

Frederick Isasi JD, MPH Executive Director Families USA

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

Rick Kronick, PhD
Herbert Wertheim School of Public Health Former Deputy Assistant Secretary for Health Policy
& Director, Agency for Healthcare Research and Policy, U.S. Department of Health and Human Services

Timothy Layton, PhD
30th Anniversary
Associate Professor of Health Policy, Department of Health Policy, Harvard Medical School

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

John C. (Jack) Lewin, MD
Principal and Founder
Lewin and Associates LLC
Health Science Innovation and Policy

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

Michael McWilliams, MD PhD
Warren Alpert Foundation Professor of Health Care Policy
Department of Health Care Policy Harvard Medical School,
Professor of Medicine and Practicing General Internist
Brigham and Women’s Hospital

*All affiliations are for identification purposes only and do not reflect the views of the affiliated institutions

Mark E. Miller, PhD
Executive Vice President of Health Care Arnold Ventures
Former Executive Director, Medicare Payment Advisory Commission

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

Tia Goss Sawhney, DrPH, FSA, MAAA
Adjunct Clinical Associate Professor, New York University School of Global Public Health Owner and Managing Director, Teus Health, LLC

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

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

Robert Reischauer
President Emeritus and Distinguished Institute Fellow, Urban Institute

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

March 3, 2023
Comment to CMS on its proposed changes to the way it calculates Medicare Advantage payments in 2024
CMS’ planned changes in the Medicare Advantage (MA) capitation rate methodology and risk adjustment methodology, which will lead to a projected payment rate increase of around one percent in 2024, are an important step towards eliminating waste, maintaining the integrity of the Medicare Trust Fund, and keeping Medicare Part B premiums in check for everyone with Medicare. The planned changes are meaningful improvements that take account of, and rein in, some of the tens of billions of dollars in excess payments to Medicare Advantage plans as a result of upcoding in recent years and going forward.

Social Security Works, Just Care USA, Public Citizen and the Center for Health and Democracy strongly support these planned changes, which will improve the accuracy of payments to Medicare Advantage plans. We urge you to finalize them.

The planned improvements address some issues with the current flawed system for capturing the health risk of enrollees in order to reduce the excess payments to Medicare Advantage plans. They fix some of the upcoding that leads to additional payments to Medicare Advantage plans, even when the Medicare Advantage plans are not spending more money on patient care.

While the projected rate increase is lower than what the insurance industry wants, it should not compromise benefits or result in increased costs for Medicare Advantage enrollees. The government will continue paying Medicare Advantage plans significantly more per enrollee than Traditional Medicare. Medicare Advantage plans will continue to amass billions of dollars in profits.

Unfortunately, CMS’ authority to correct for massive Medicare Advantage excess payments is circumscribed. CMS is bound to adhere to the current risk-adjusted capitated payment model for Medicare Advantage plans. This model entrusts the Medicare Advantage plans themselves with determining the health risk of their members and pays the Medicare Advantage plans more for enrollees with more diagnosis codes.

This risk-adjustment method rewards Medicare Advantage plans best able to capture enrollees’ diagnosis codes, regardless of whether the Medicare Advantage plans spend more money covering care for their enrollees with additional diagnosis codes. It creates a perverse incentive for Medicare Advantage plans to do everything in their power to “find” diagnosis codes to ascribe to their enrollees—“upcode”—in order to maximize profits. And, it makes Medicare Advantage plans that do not have the tools or resources to add as many diagnosis codes as possible to their enrollees’ records less competitive than those Medicare Advantage plans that do.

Some Medicare Advantage plans hire outside firms to conduct home visits of enrollees with the specific purpose of ascribing new diagnosis codes to their medical records. These Medicare Advantage plans might also pay in-network primary care providers more for assigning more diagnosis codes to their patient records.

According to MedPAC, these activities led to far higher per enrollee payments (106 percent) in Medicare Advantage than in Traditional Medicare, at a total cost to taxpayers of $27 billion this year alone. According to other analysts who have taken a deep dive into risk-adjustment in Medicare Advantage, the excess payments are closer to 120 percent of Medicare, well over $80 billion this year. These excess payments are projected to total $600 billion over the next eight years. The CMS proposed formula for its 2024 rate increase would eliminate or change some codes to better reflect the additional risk some Medicare Advantage plans bear.

Ultimately, to stop the upcoding, the federal government must wrest responsibility for risk-adjustment from the Medicare Advantage plans. CMS can conduct risk-adjustment itself. Better still, since risk-adjustment is an imperfect payment system that will always overpay for the healthy and underpay for the sick, creating perverse incentives, the government should revise its capitated payment model to better align with the goals of Medicare Advantage—lower costs to Medicare and better quality. Only the latter option helps ensure Medicare Advantage enrollees can get the care they need.

If the government paid Medicare Advantage plans for the cost of services they delivered, plus a management fee, with a risk-adjusted limit that the government set, the Medicare Advantage plans would have a greater incentive to deliver high-value care to people with costly conditions and have far less opportunity to game the payment system. The current payment system, and any new payment model unrelated to the cost of services Medicare Advantage plans deliver, suffers from three fundamental flaws that affect enrollee care at both the individual and macro levels:

First, it incentivizes some, if not most, Medicare Advantage plans to compete for healthy enrollees, as they cost very little to cover. In fact, healthy enrollees cost about one-tenth of what the government pays the Medicare Advantage plans to cover services for these enrollees. Further, insurers design Medicare Advantage plans with lower cost and sometimes lower quality specialists and specialty providers to avoid the sickest patients. The sickest patients cost many times what the government pays the Medicare Advantage plans for these enrollees. In theory, the payments for healthy and sick would balance out. But, in practice, covering all medically necessary care for a disproportionate share of the sickest enrollees would put the Medicare Advantage plans out of business.

Second, a payment system unrelated to the cost of services delivered incentivizes some, if not most, Medicare Advantage plans to withhold care and provider payments, particularly for the 10 percent of people who represent 70 percent of Medicare spending. Unfortunately, this is easy for Medicare Advantage plans to do. The bad-actor Medicare Advantage plans use their own proprietary prior authorization rules that are out of sync with standard medical practice and pay their physicians to deem medically necessary treatment unnecessary, even when these physicians lack the qualifications to make the decision. CMS cannot oversee Medicare Advantage plans’ medical necessity decisions at a micro level. And, CMS cannot keep Medicare Advantage plans from inappropriately cutting payments to physicians and hospitals. By giving Medicare Advantage plans this discretion over coverage and payments, including those Medicare Advantage plans that are bad actors, the government endangers the lives of the millions of enrollees with complex and costly conditions and puts the financial stability of some providers at serious risk.

Third, the current risk-adjusted payment system incentivizes some, if not many, Medicare Advantage plans to ignore good care management. Good care management would involve collection of complete and accurate encounter data to determine what’s working and what’s not working and a reporting out so that there is continuous learning that benefits everyone. What’s worse is that this payment system has kept the government and researchers from being able to analyze patient encounter data to determine which plans are providing good care and which are withholding critical care. As a consequence, millions of people are misled into joining Medicare Advantage plans that might not meet their care needs.

The current payment system also permits Medicare Advantage plans to claim they spend 85 percent of their revenues on patient care and “quality” initiatives, as required by law, without meaningful assurance that they do.

In an ideal world, CMS would have the tools, resources and political will to identify and hold Medicare Advantage plans accountable for their bad acts in meaningful ways that would actually deter them from committing bad acts. That is fantasy, as the current design of Medicare Advantage makes good oversight and accountability effectively impossible, even if CMS had adequate staff and other resources. For now, without fundamental design changes, we are left with a Medicare Advantage system that has no proven value, hundreds of billions in excess costs, and no way to ensure enrollees who need costly care actually receive it.

No one should want the government to overpay for Medicare services, especially when there is no good data to support their value. No one should want vulnerable older adults and people with disabilities to enroll in Medicare Advantage plans that won’t meet their needs when they need care.

If Medicare Advantage is to “work” for taxpayers and enrollees:
- We need an appropriate limit on Medicare Advantage plan revenue, equal to or less than Traditional Medicare per enrollee.
- We need a standardized claims processing system for all Medicare Advantage plans that ensures coverage of medically reasonable and necessary services, with a public—non-proprietary— prior authorization overlay.
- We need Medicare Advantage plans to have a financial incentive to provide high-value care to people with costly conditions and to compete for these enrollees.
- We need Medicare Advantage plans to cover care from all cancer centers of excellence and other Medicare providers to ensure people have good access to care.
- We need a standardized system for the government to collect and share de-identified patient encounter data so that “value” can be assessed, and we can have in place a robust system for identifying persisting and emerging health care needs, including the ability to detect a disease outbreak or the need for greater resources in a community as a result of a force majeure.
- We need a “strict liability” punishment for Medicare Advantage plans that violate their legal and contractual obligations, including automatic plan termination for ongoing violators.
In sum, CMS’ planned improvements in the MA capitation rate methodology and risk adjustment methodology, which will lead to a projected payment rate increase of 1 percent in 2024, will help reduce excess payments to Medicare Advantage plans. However, without further improvements, they will not bring Medicare Advantage plans in line with Traditional Medicare. Medicare Advantage plans still will be able to upcode improperly and devise ways to stint on enrollee care in order to earn windfall profits.
February 28, 2023
Rural hospitals need government help to survive
No American should have to travel long distances to get to a hospital, especially in an emergency. But, as more hospitals are being swallowed up into hospital systems and profitability becomes a prime focus, rural hospitals are a dying breed. Now, David Muioio reports for FierceHealthcare that 14 Senators from rural states are asking the Centers for Medicare and Medicaid Services, CMS, the agency that oversees Medicare, to increase payments to rural hospitals.

The money is there. All CMS really needs to do is move some of the billions in excess payments from Medicare Advantage plans into these rural hospitals. As it is, CMS is paying the Medicare Advantage plans to cover care in rural hospitals, and the Medicare Advantage plans too often are delaying and denying payments to these hospitals to maximize their own profits.

There has been a policy in place since 2019 to help hospitals with low wages, which are generally rural hospitals. The policy has helped hundreds of hospitals in 23 states. The policy was intended to address disparities between hospitals providing care in low-wage areas and those providing care in high-wage areas. And, the policy helps ensure that rural residents have access to the care they need.

The Senators say in their letter to CMS that this policy has been a “valuable lifeline” for low-wage hospitals. But, it is set to sunset this year at the end of September. The Senators are requesting a four-year extension.

As it is, pandemic funds to rural hospitals are drying up. And, the data suggests that rural hospitals are at great risk of closing this year. If CMS continues the policy, low-wage hospitals will be able to bring on needed staff, ensuring that residents in their communities can continue to use their services.

Which senators are asking for the money? Mark Warner, D-Virginia; Marsha Blackburn, R-Tennessee; Tim Kaine, D-Virginia; Tommy Tuberville, R-Alabama; Joe Manchin, D-West Virginia; John Boozman, R-Arkansas; Shelly Moore Capito, R-West Virginia; Bill Hagerty, R-Tennessee; James Lankford, R-Oklahoma; Roger Wicker, R-Mississippi; Cindy Hyde-Smith, R-Mississippi; Tim Scott, R-South Carolina; Tom Cotton, R-Arkansas; and Katie Boyd Britt, R-Alabama.

Congress has already helped rural hospitals a bit through some higher Medicare payments last year. Rural hospitals can also get a five percent increase in reimbursement for outpatient services if, among other things, they continue their emergency rooms, through a Rural Emergency Hospital designation. But, it is not clear whether the bump is worth the conditions.

Here’s more from Just Care:
February 27, 2023
Medicare Advantage ads are improperly embedded in people’s electronic health records
Medicare Advantage plans are now advertising on people’s electronic health record portals, reports Cheryl Clark for MedPage Today. The Centers for Medicare and Medicaid Services (CMS), which administers Medicare, says this should not be allowed. But, before I explain what’s happening with these ads, let me list some of the many things some Medicare Advantage plans do that are not allowed and that CMS has not been able to address in a meaningful way.
1. Medicare Advantage plans inappropriately delay and deny care.
2. Medicare Advantage plans do not cover care that Traditional Medicare covers, though they are required to.
3. Medicare Advantage plans fail to share complete and accurate data on the services their enrollees receive with the government.
4. Medicare Advantage plans fail to keep their provider directories accurate and up to date.
5. Medicare Advantage plans fail to code the health status of their enrollees accurately.
6. Medicare Advantage plans mislead people through their advertisements.
So, it’s no surprise that Medicare Advantage plans will take advantage of every opportunity to promote their health plans. Marketing Medicare Advantage plans through people’s electronic health record seems par for the course. Why shouldn’t FollowMyHealth, the electronic health record portal, accept money from Medicare Advantage plans in exchange for promoting them? It’s not their concern that their users might be misled to think their doctors are promoting Medicare Advantage plans. They’re simply trying to maximize profits.

CMS has a memo on Medicare Advantage “best practices,” that discourages this type of advertising, even by third parties. But, it’s not clear that it’s illegal or a violation of any contractual obligation.

CMS also has a proposed rule that would require Medicare Advantage ads to specify the Medicare Advantage plans that offer particular benefits and not to generalize about products in Medicare Advantage. It is not yet finalized.

As with prescription drug ads, the Medicare Advantage ads should highlight the risks of enrolling in a Medicare Advantage plan. But, they don’t mention, let alone highlight, their limited provider networks, the restricted geographic scope of their coverage, their referral and prior authorization requirements, their high out-of-pocket costs when you need costly care, or that once you are in a Medicare Advantage plan you likely will not be able to move back to traditional Medicare because you are not guaranteed the right to buy supplemental coverage.

At the very least, CMS should include all these warnings in its Medicare and You Handbook and in all materials it distributes on Medicare Advantage. CMS will never have the tools or the resources to prevent Medicare Advantage plan bad actors from doing everything in their power to maximize their profits, whether it’s misleading prospective enrollees about their benefits, inappropriately delaying and denying care, having inadequate provider networks, not paying hospitals for the services they deliver, or overcharging enrollees for their prescription drugs.

CMS can keep issuing rules that the bad actors will not follow. Or, if it wants to protect Medicare and Medicare Advantage enrollees and providers, it can start canceling contracts and penalizing Medicare Advantage bad actors in meaningful ways. Are there many bad actor Medicare Advantage plans you might ask? Likely, far more than you’d like to believe.

Here’s more from Just Care:
February 22, 2023