JustCare

Tag: MedPAC

  • Medicare Advantage poses grave risk to rehab facilities and nursing homes

    Medicare Advantage poses grave risk to rehab facilities and nursing homes

    Brendan Williams, president and CEO of the New Hampshire Health Care Association and a former state insurance regulator, writes for McKnight’s about Medicare Advantage’s existential threat to nursing home and rehabilitation care.  Our policymakers need to focus on the risks Medicare Advantage plans pose to critical health care providers and patients because of their low payments and high denial rates.

    Medicare Advantage threatens the nursing home and rehab industries. These Medicare Advantage threats are on top of  the threats we are all aware of: nursing and other health care worker shortages, little Medicaid support, and a low unemployment rate coupled with restraints on immigration.

    Because the federal government is overpaying Medicare Advantage plans considerably, the Medicare Advantage plans have been able to offer enrollees additional benefits that are unavailable in Traditional Medicare. And, while those benefits are of questionable value–it’s unclear how many people get them and the data show widespread and persistent inappropriate delays and denials of care and coverage in Medicare Advantage–the Medicare Advantage plans can use the additional benefits to attract members away from Traditional Medicare.

    People with Medicare do not appreciate the challenges they face getting costly and complex care when they are diagnosed with a serious cancer or heart problem and desperately need good care. The New York Times reported last spring, “every year, tens of thousands of people enrolled in private Medicare Advantage plans are denied necessary care that should be covered under the program, federal investigators concluded in a report…”

    People needing rehabilitation services post hospitalization are also at serious risk in some Medicare Advantage plans. They are often denied critical services. According to the American Medical Rehabilitation Providers Association, Medicare Advantage plans refused to cover more than half of people admitted to rehabilitation facilities.

    Williams finds it unsurprising that the Centers for Medicare and Medicaid Services, which oversees Medicare Advantage, is not going after the Medicare Advantage plans. The people working there, he says, will be looking for industry jobs when they leave. Williams suggests that people in Medicare Advantage are left unprotected.

    Williams quotes the late Senator Ted Kennedy, who was reported arguing in the context of the advent of Medicare Advantage that “Congress would provide lavish subsidies to private health plans, giving them an unfair advantage in competition with the government-run Medicare program.” AARP is of no help to Medicare Advantage enrollees either, he says. It has cut a deal with UnitedHealthcare, that generates tens of millions of dollars in annual revenue for AARP.

    One report by the Medicare Payment Advisory Commission or MedPAC, which oversees Medicare, quotes a survey that “Medicare’s FFS per day payments were 25% higher than MA rates.”  MedPAC sums up: “[t]he payment differential between MA and FFS SNF rates indicates that facilities accept lower payments to treat MA enrollees who are not much different from FFS beneficiaries.”

    Williams suggests that as Medicare Advantage takes over the Medicare market, the lower rate to nursing homes and rehabilitation facilities will mean their demise.

    Here’s more from Just Care:

  • Medicare should increase physician pay to ensure good access to care

    Medicare should increase physician pay to ensure good access to care

    The Medicare Payment Advisory Commission’s (MedPAC’s) most recent report to Congress recommends that Medicare increase physician pay in traditional Medicare.  Its recommendation came in the context of recognizing good access to care for people in traditional Medicare–as good as or better than people who are privately insured–but inflationary pressures on physician practices. MedPAC does not address the rates Medicare Advantage plans–corporate health plans offering Medicare benefits–pay physicians.

    MedPAC recommends that traditional Medicare increase physician pay by 1.45 percent. It also recommends an increase in pay of 15 percent to primary care physicians who serve dual-eligibles–people with both Medicare and Medicaid. And, MedPAC recommends a 5 percent increase in pay for other physicians serving people in traditional Medicare with low incomes.

    Not surprisingly, the American Medical Association supports these recommendations and wants them to be even higher. The AMA argues that physician pay in traditional Medicare has not gone up at the same rate as the cost of practicing medicine. AMA says with inflation adjustment, physician pay in Medicare has dropped 26 percent in the last 22 years. Physicians in small practices, in rural communities, and serving low-income populations are most hurt.

    In addition, MedPAC recommends moving more Medicare support to safety-net hospitals. And, MedPAC believes that Medicare should not be paying different amounts for the same service depending upon where the service is provided.

    Medicare Advantage plans can set their own physician rates; they also can piggyback off of traditional Medicare rates. Given access to care issues in Medicare Advantage plans, particularly access to high quality specialists, it would be helpful to know whether Medicare Advantage plans are paying in-network specialists at the same rate as traditional Medicare today or at a lower rate. To ensure access to care in Medicare Advantage, while delivering cost-effective care, Medicare Advantage plans should be paying the Medicare rate for specialty care.

    Six years ago, Medicare Advantage plans paid physicians somewhat less than traditional Medicare. In 2017, “MA paid 96.9% of what traditional Medicare paid for a mid-level office visit, 91.3% of what traditional Medicare paid for a cataract removal in an ambulatory surgery center and 102.3% of what traditional Medicare paid for a complex evaluation and management of a patient in the emergency department. Laboratory services and durable medical equipment saw much lower MA rates, including only 67.4% for a walker and 75.8% for a complete blood cell count.” It’s not clear whether Medicare Advantage provider rates have come down further since then. People in Medicare Advantage plans should be concerned about their ability to access good quality providers if they have come down further.

    Here’s more from Just Care:

  • Government overpayments to Medicare Advantage plans grow, while concerns remain about quality of care

    Government overpayments to Medicare Advantage plans grow, while concerns remain about quality of care

    Earlier this month, MedPAC, the agency that oversees Medicare payments, released a slide deck showing ever-increasing government overpayments to Medicare Advantage plans.The total overpayments stemming from “upcoding,” additional diagnoses codes on patient records, are staggering, while concerns about quality of care remain. Will the administration and Congress stop the billions in overpayments and protect Medicare Advantage enrollees from health plans that are keeping people from getting needed care?

    The overpayments that are the focus on MedPAC attention amount to more than $124 billion between 2007 and 2023. They stem from Medicare Advantage plans adding diagnosis codes to patient charts, as currently permitted. They are different from the overpayments from wrongful or fraudulent diagnosis codes.

    With each passing year, Medicare Advantage likely will grow, as will the permissible government overpayments to Medicare Advantage plans, unless things change. This year and last alone, according to MedPAC, overpayments totaled $44 billion, $17 billion in 2022 and $27 billion in 2023. Take a look at the chart accompanying this post.

    These permissible overpayments are so high that people in Medicare Advantage plans theoretically have $2,350 in additional benefits each year. But, there is no evidence they do. They most likely end up in the coffers of Medicare Advantage plans. People in Medicare Advantage needing costly care continue to face widespread and persistent delays and denials of care, jeopardizing their health. MedPAC also expressed ongoing concerns about quality of care in Medicare Advantage.

    These Medicare Advantage overpayments are projected to total more than $600 billion in the next eight years. Over time, these additional payments will likely come back to haunt Medicare Advantage enrollees. They will probably face much higher out-of-pocket costs.

    Congress and the administration eventually will change the Medicare Advantage payment system to eliminate these overpayments. If they don’t, the cost of Medicare Advantage, which insurers argued back in 2003 would be 90 percent of Traditional Medicare, will become unsustainable. The government is currently spending 106 percent of Traditional Medicare on Medicare Advantage.

    What will happen to people with Medicare when Congress changes the Medicare Advantage payment system? If they’re in Medicare Advantage, most will be locked in, unable to switch to Traditional Medicare, and will have to pay significantly higher costs. Congress has opted not to have an out-of-pocket cap in Traditional Medicare nor  has it given people a  guaranteed right to supplemental coverage in Traditional Medicare so they can protect themselves from financial risk. What a big f#$%ing mess.

    Here’s more from Just Care:

  • Ten ways to improve Medicare Advantage

    Ten ways to improve Medicare Advantage

    Dear Secretary Becerra and Administrator Brooks-LaSure:

    Social Security Works, Just Care USA and Center for Health and Democracy are delighted that the Biden Administration seeks to protect older adults, people with disabilities and the Medicare program from abuses in the Medicare Advantage program. We thank you for the opportunity to comment on ways to improve Medicare Advantage. We agree with the HHS Office of the Inspector General, Government Accountability Office and MedPac that Medicare Advantage is in need of major reform to ensure the health and well-being of enrollees, promote health equity, and minimize legal violations, Including overpayments. As GAO reported: “The Medicare program, which includes MA, is on GAO’s High Risk List, because of its size, complexity, and susceptibility to mismanagement and improper payments.”

    The health insurers offering Medicare Advantage plans have committed many hundreds of legal violations since 2000, and there is reason to believe these will continue unless the federal government overhauls Medicare Advantage. UnitedHealth Group, the company with the most MA enrollees, has paid nearly $600 million in penalties for 332 violations, 300 of which are for consumer protection-related offenses, since 2000. Humana, the second largest MA plan, has paid more than $77 million in penalties for 79 violations, 57 of which are for consumer protection-related offenses, since 2000. CVS Health, the third largest MA plan, has paid more than $1.6 billion in penalties for 463 violations, 236 of which are for consumer protection-related offenses, since 2000. 

    Today, the MA plans have too much incentive and opportunity for abuse. In September 2019, Senator Sherrod Brown, along with five other Senators, wrote CMS requesting answers to questions regarding key failings in Medicare Advantage. To our knowledge, three years later, CMS has not addressed any of the serious issues raised. Unless MA is overhauled on multiple fronts, including revising the way it pays them, Medicare Advantage plans will continue to undermine the integrity of the Medicare Trust Fund, harm health equity, and put millions of their enrollees at serious risk of harm.

    As soon as possible, CMS should stop misdirecting people to believe they can meaningfully choose a Medicare Advantage plan that meets their needs and that they can rely on a misleading star-rating system to choose among MA plans. CMS should:

    • Educate people about the high out-of-pocket costs in MA;
    • Educate people about MA plans’ torturous prior authorization rules;
    • Identify and publicly report the names of MA plans with high rates of delays and denials;
    • Identify and publicly report adjusted mortality rates per MA plan;
    • Terminate contracts with MA plans that are consistently delaying and denying care inappropriately, have high mortality rates, or otherwise are violating their contractual obligations. 

    People from racial and ethnic minority groups, people with disabilities and serious health conditions, people of disadvantaged socioeconomic status, people with limited English proficiency, and people from rural communities disproportionately choose Medicare Advantage because of its low upfront cost. They are, however, at greater risk in Medicare Advantage than in traditional Medicare for two key reasons: 

    Fundamental problems with the current Medicare Advantage model drive health inequities and poor health outcomes for people with complex conditions. The biggest problem is the risk-adjusted capitated payment model. Medicare Advantage plans that: 1. Attract a disproportionate number of enrollees in relatively good health and/or 2. Delay and deny care inappropriately and/or 3. Do not include high quality specialists and specialty hospitals in their networks, can be sure to profit handsomely. The risk-adjusted capitated payment model for MA plans not only hurt vulnerable populations, they drive up Medicare costs. 

    We propose a suite of ten changes to improve health equity, reduce Medicare Advantage threats, enable appropriate CMS oversight, and minimize health insurer violations in Medicare Advantage. 

    1. Change the way the government pays Medicare Advantage plans. 

    The government should pay MA plans so that they do not have a financial disincentive to cover care for people with costly and complex conditions. Prospective payments, unrelated to actual medical claims, create a powerful financial incentive for MA plans to impede access to high-value care for enrollees with complex conditions in order to maximize profits. This is particularly corrosive to health equity:

    • MA plans can maximize profits by enrolling a disproportionate number of people in good health and impeding care for people in poor health. This is one reason why MA plans seldom contract with Centers of Excellence and rarely, if ever, advertise or promote programs for people with costly conditions. 
    • MA plans can maximize profits by underpaying providers. The Texas Hospital Association has identified that “the rapid growth of Medicare Advantage enrollees threatens Texas’ health care safety net. For rural hospitals, Medicare Advantage causes financial instability on an already fragile provider community.” 

    In theory, a risk-adjusted capitated model would pay MA plans enough to cover the cost of services their members need. In reality, however, capitated risk-adjusted models can never ensure access to timely and good quality care for people with costly and complex conditions. In a world in which 50 percent of the Medicare population accounts for less than five percent of spending, such models wildly overpay for the healthy and significantly underpay for the sick.

    Capitated risk-adjusted models create a powerful incentive for Medicare Advantage plans to “cherry pick” the healthy enrollees and “lemon drop” the sick ones. Any Medicare Advantage plan that meets the needs of people with costly conditions — where demand for high-value care is the greatest — is at risk of attracting a disproportionately high percentage of enrollees with costly conditions and suffering financially. Ten percent of people with Medicare with the most serious conditions account for 60 percent of Medicare spending. It makes business sense for MA plans to do what they can to minimize costs from this population. Even good actors must engage in “cherry picking” and “lemon dropping” to ensure they remain financially afloat.

    2. Base payments to MA plans upon the cost of services MA plans cover plus a reasonable fee for administration and a global cap.

    Risk-adjusting capitation payments based upon an MA plan’s own proprietary assessment of the health of its enrollees creates a powerful financial incentive for the plans to “upcode” or attach as many diagnosis codes as possible to its enrollees. The more diagnosis codes, the higher an MA plan’s payments, and the greater the cost to the Medicare program. 

    Upcoding is not simply about bad actors. In order for “good guy” MA plans to compete with “bad guy” MA plans, the good guys are hard-pressed not to engage in upcoding. Otherwise, their competitors have more resources to offer reduced premiums and additional benefits, driving the “good guy” MA plans out of the market. 

    The Department of Justice has identified more than $100 billion of such inappropriate upcoding and overbilling at UnitedHealth Group, Humana, Cigna, Kaiser, Sutter Health and Anthem, among other insurers. It’s anyone’s guess how many additional billions of dollars in overpayments have gone undetected. As a result of upcoding, CMS is projected to overpay Medicare Advantage plans an estimated $600 billion between 2023 and 2031. 

    CMS should acknowledge that it does not have the tools or resources to ensure the diagnosis codes MA plans assign their enrollees are accurate, much less to recoup overpayments. 

    Risk-adjusted capitation adds additional administrative costs and profits to a fee-for-service model. More than 81 percent of MA plans pay all or nearly all their network providers on a fee-for-service basis. Traditional Medicare’s fee-for-service payment model is far more cost-effective and transparent than the MA capitated payment model. Researchers can see what’s working and not working in the health care system, unlike in MA, and drive system improvements. CMS should be building on that payment model.

    3. Require Medicare Advantage plans that pay providers on a fee-for-service basis to use traditional Medicare’s fee schedule. 

    Allowing Medicare Advantage plans to pay lower rates to providers jeopardizes access to care in MA and undermines health equity. Safety net providers serving vulnerable communities, in particular, have little if any leverage to contest MA plan rates and few resources to challenge inappropriate denials of care and coverage, undermining health equity. The Texas Hospital Association has identified that MA plans pay Texas hospitals well below the traditional Medicare rate, which undermines federal payment policies intended to ensure adequate reimbursement for rural hospitals. Medicare Advantage has caused some Texas hospitals to lose several hundred thousand dollars in revenue a year that they had received from traditional Medicare. 

    Conversely, allowing MA plans to pay higher rates than traditional Medicare creates an unlevel playing field with traditional Medicare and drives up Medicare spending needlessly. 

    4. Require MA plans to include all centers of excellence in their networks and disclose out-of-pocket costs for people with complex conditions.  

    The data suggest notable dissatisfaction among MA plan enrollees who need costly care. They disenroll from Medicare Advantage plans at disproportionately high rates in the last year of life and when medical costs are high. A 2021 GAO report suggests that these high disenrollment rates “may indicate potential issues with beneficiary access to care or with the quality of care provided.” In addition, rural enrollees have substantial rates of switching out of Medicare Advantage to traditional Medicare. The data also show widespread and persistent inappropriate delays and denials of care. 

    Until CMS moves away from a risk-adjusted capitated payment model, it must ensure that every MA plan meets the needs of people with the costliest and most complex conditions. Among other things, every MA plan should include all centers of excellence, such as NCI-designated Cancer Centers, in its network. And, rather than allowing MA plans to spend rebate dollars on additional benefits with no evidence of promoting health equity, CMS should consider establishing a mechanism for this money to go towards covering copays and deductibles for people with complex conditions so as to help ensure they are not forced to choose between their rent and their health care.  

    5. Standardize MA coverage rules and cost-sharing design.

    Even the most diligent people with Medicare have no way to select the MA plan that best meets their needs. Each Medicare Advantage plan structures its out-of-pocket costs and out-of-pocket limits in different ways, uses different medical necessity protocols, different referral and prior authorization requirements, designs different networks, and engages in different levels of inappropriate denials of care and coverage. Consequently, some Medicare Advantage plans could literally be harming their enrollees while others could be ensuring timely access to care and delivering good health outcomes. No one can meaningfully differentiate among these plans.

    These structural differences among MA plans, several of which can change at any time, could be disabling or even killing people with Medicare prematurely – and CMS itself would not know. These differences prevent CMS from both protecting enrollees and evaluating MA plans in a meaningful way. At the same time, they prevent people with Medicare from being able to compare MA plans on the most essential metrics. 

    Structural differences also make it all but impossible for CMS to undertake timely and effective audits of MA plans. CMS has not been able to complete timely MA audits from as far back as 2011. Without such audits, CMS cannot protect enrollees in MA plans or hold MA plans appropriately accountable for their bad acts in a timely fashion. CMS should acknowledge that it will never have the tools or resources to appropriately penalize MA plans for bad acts and protect MA enrollees without standardized MA design. 

    People with Medicare today are inadequately protected against proprietary and non-standardized MA policies that could jeopardize their health and well-being. The data show that CMS cannot effectively monitor them for poor outcomes. A 2022 OIG report, a 2018 OIG report, and endless news stories consistently show that Medicare Advantage plans too often inappropriately deny care that traditional Medicare would have covered and that the MA plans should have covered. CMS should require all MA plans to follow traditional Medicare coverage protocols and only allow evidence-based and transparent differences among MA plan protocols. 

    6. Ensure appropriate oversight of MA.

    CMS does not have the tools or resources to ensure appropriate Medicare Advantage oversight and protect enrollees under the current non-standardized model. Standardizing coverage policies would allow CMS to monitor MA plans more effectively and better protect enrollees. Standardized coverage protocols would help ensure MA plans covered medically necessary care and promoted health equity. 

    The GAO has found that CMS has not validated MA patient encounter data as needed and recommended. In a recent House Ways and Means Subcommittee on Oversight and Investigations hearing, MedPAC reported that “After a decade, MA plans are “not producing complete and accurate enough records needed for MedPAC to conduct oversight activities, to understand differences in service use between MA and FFS, to reflect utilization management techniques, and inappropriate denial of covered care.” 

    The failure of Medicare Advantage plans to turn over complete and accurate encounter data for analysis — as required by law — suggests these plans either lack the tools to collect the data or the ability to appropriately manage their enrollees’ care.

    7. Do not assume value in MA, since it cannot be measured. 

    MedPAC has said repeatedly that MA quality cannot be measured. “The current state of quality reporting in MA is such that the Commission can no longer provide an accurate description of the quality of care in MA. With 43 percent of eligible Medicare beneficiaries enrolled in MA plans, good information on the quality of care MA enrollees receive and how that quality compares with quality in FFS Medicare is necessary for proper evaluation. The ability to compare MA and FFS quality and to compare quality among MA plans is also important for beneficiaries. Recognizing that the current quality program is not achieving its intended purposes and is costly to Medicare, in its June 2020 report the Commission recommended a new value incentive program for MA that would replace the current quality bonus program.” Medicare Advantage plans’ higher per enrollee costs than traditional Medicare suggest Medicare Advantage offers less value than traditional Medicare. 

    We know that MA plans spend less money on medical care than traditional Medicare. But, we do not know to what extent they are failing to cover appropriate medically necessary care that traditional Medicare covers. Moreover, industry data on 2018 hospital stays and emergency room visits reveal that Medicare Advantage appears to have greater inpatient use and emergency room visits than traditional Medicare. In a review of the Medicare Advantage studies, Agarwal and colleagues find “the evidence on readmission rates, mortality, experience of care, and racial/ethnic disparities did not show a trend of better performance in MA plans than traditional Medicare, despite the higher payments to MA plans.”

    Assessing MA plan quality is critical for the health and well-being of MA enrollees. Given the poor performance of some MA plans with four and five-star ratings and no information from CMS on bad actors with these ratings, people are at risk of worsened health outcomes if they choose the wrong MA plan. One MA analysis in NBER found that if CMS cancelled contracts with the worst performing five percent of MA plans, it would save 10,000 lives a year.

    To protect people from misleading quality information, CMS should revise its star-rating system, as proposed by MedPAC. It should also eliminate star ratings for all Medicare Advantage plans that do not release complete and accurate encounter data, as required. And, it should consider removing these MA plans from eligibility for the quality bonus program. 

    8. Rethink Medicare Advantage networks. 

    CMS should stop allowing Medicare Advantage plans, except those that are fully integrated health systems, to design their own provider networks and require them to cover care from all Medicare providers. Many if not most MA plans design their networks to minimize their costs and boost their profits to the detriment of the health and well-being of their enrollees. To our knowledge, no independent expert has ever demonstrated the value of a network in Medicare Advantage plans to people with Medicare or the Medicare program other than those in fully integrated health systems. Conversely, stories abound about Medicare Advantage narrow networks that jeopardize access to care and lead to poor health outcomes, particularly for vulnerable populations.

    If the principal reason for a provider network is to contain medical costs, there is no compelling justification for Medicare Advantage plan networks. MA plans generally piggyback off of Medicare rates, which are already relatively low. If MA plans negotiate even lower rates, there’s good cause for concern that providers in their networks are of lesser quality than in traditional Medicare. If the principal reason for a provider network is to ensure good integrated care, it is difficult to appreciate the value of MA provider networks (except in cases where the Medicare Advantage plan is a fully integrated health care system). 

    The risks to the health and well-being of MA enrollees of allowing MA plans to design their provider networks are grave. Compared to traditional Medicare, the data show that MA plans use lower quality home health agencies and nursing homes, and less frequently use higher quality hospitals. They often do not include NCI-designated Cancer Centers or Centers of Excellence. In 2016, the Kaiser Family Foundation found that only 15 percent of Medicare Advantage plans definitely included Cancer Centers and 41 percent definitely did not.

    Plan networks are often so narrow as to delay or prevent people from accessing needed care. They also often undermine continuity of care. And, many MA plans have never had accurate network directories. Plan provider directories are too often misleading and inaccurate. Without accurate directories, network adequacy cannot be established. 

    Moreover, GAO reports that CMS does not assess provider availability to the extent it oversees network adequacy. This failure undermines health equity. Vulnerable older adults and people with disabilities are more likely to go without care when networks are narrow and accessing care with network providers requires significant time and travel.

    We urge CMS to acknowledge that it has neither the tools nor the resources to ensure network adequacy and promote health equity. A 2015 GAO report found “that CMS’s oversight did not ensure that MAO networks were adequate to meet the care needs of MA enrollees. For example, we found that CMS did not adequately verify the accuracy of provider network information submitted by MAOs, and accordingly could not verify whether MAO networks were in compliance with the agency’s provider network criteria.” In June 2022, GAO stated that its recommendations to address these issues “had not yet been fully implemented.”

    To promote health equity, protect people from misleading MA marketing regarding network providers, and ensure access to and continuity of care, CMS should consider requiring MA plans, except fully integrated health systems, to cover care from all Medicare providers. At a minimum, CMS should require those plans that do not keep their directories up to date to open their networks to all Medicare providers. 

    9. Rethink key consumer information regarding Medicare Advantage and overhaul MA marketing to minimize deception. 

    CMS should ensure that people enrolling in a Medicare Advantage plan are able to identify which of those plans are the bad actors, if not cancel contracts with these bad actors. Allowing these bad actors to continue offering MA plans endangers the health of the most vulnerable people with Medicare and undermines health equity.

    CMS also should ensure that no one enrolls in Medicare Advantage without understanding the financial and administrative barriers to care. A recent Center for Medicare Advocacy report found that even the “Medicare and You Handbook” and Medicare website do not explain out-of-pocket costs or prior authorization requirements in a balanced fashion. 

    CMS reported a doubling of MA marketing complaints in the year between 2020 and 2021. Too often people with Medicare have little clue what they are doing when they enroll in a Medicare Advantage plan. CMS’ review of sales calls showed significant confusion among people with Medicare, including “that the beneficiary may be unaware that they are enrolling into a new plan during these phone conversations.”  Of those people who understand differences between traditional Medicare and MA, few appreciate the risks of enrolling in a Medicare Advantage plan.

    10. Level the playing field with traditional Medicare and ensure health equity in MA.

    We urge the government to put an out-of-pocket cap in traditional Medicare so that traditional Medicare is a meaningful choice for everyone with Medicare, including people with low incomes, people in rural communities, people from racial and ethnic minority groups, and people with complex conditions. Without that out-of-pocket cap, the hundreds of thousands of people who face inappropriate delays and denials of care in Medicare Advantage too often are deprived a meaningful choice of traditional Medicare. If they elect traditional Medicare, they expose themselves to too much financial risk because supplemental insurance is unavailable or affordable for them. 

    CMS should consider allowing people in MA to have supplemental coverage that picks up all out-of-pocket costs. Right now, too many enrollees, particularly the most vulnerable, are skipping or delaying critical care because they cannot afford the deductibles and copays, creating substantial health inequities. One NBER study found that a copay increase of as little as $10.40 resulted in thousands of needless deaths. Supplemental coverage would allow people to better budget for their care. Out-of-pocket costs jeopardize the health and well-being of enrollees, with particularly poor outcomes for Latinx and BIPOC communities. In addition, out-of-pocket costs present a large barrier to care for people with low incomes.

    Conclusion

    Medicare Advantage would be significantly improved by:

    • overhauling the Medicare Advantage payment system,
    • meaningfully disclosing MA encounter and other data,
    • holding accountable those MA plans that violate their contracts, 
    • standardizing coverage policies and provider rates, including prior authorization policies, 
    • requiring a broad Medicare provider network, and 
    • overhauling Medicare Advantage marketing practices. 

    Without these reforms, the federal government puts the lives of the most vulnerable people with Medicare enrolled in MA at serious risk and threatens the integrity of the Medicare Trust Fund. It wrongly drives up Medicare Part B premiums for people in traditional Medicare. 

    Traditional Medicare would benefit from some improvements as well, including an out-of-pocket cap on Part A and B benefits and coverage of dental, hearing, vision and long-term care benefits. CMS also needs to end its Direct Contracting/ACO REACH experiment, which involuntarily assigns vulnerable people with Medicare to entities paid upfront to manage their care and is riddled with many of the same grave problems as Medicare Advantage. That said, traditional Medicare generally still provides easy access to necessary care at substantially lower cost than Medicare Advantage, and CMS should ensure that it is a meaningful choice not only for the wealthiest people with Medicare but for everyone with Medicare. 

    We look forward to working with CMS on Medicare improvements. Thank you for this opportunity to share our thoughts. For questions, please contact Diane Archer at [email protected]. 

    Signed,

    Diane Archer, President, Just Care USA

    Alex Lawson, Executive Director, Social Security Works

    Wendell Potter, President, Center for Health and Democracy

  • Government watchdog agencies tell Congress Medicare Advantage inappropriately restricts access to care and needs fixing

    Government watchdog agencies tell Congress Medicare Advantage inappropriately restricts access to care and needs fixing

    In a June 28, 2022 US House Energy and Commerce Oversight and Investigations Subcommittee hearing, representatives of the HHS Office of the Inspector General (OIG), Government Accountability Office (GAO) and Medicare Payment Advisory Commission (MedPac) told Congress in no uncertain terms that Medicare Advantage–Medicare Part C, which is administered through private health insurers–needs fixing. Medicare Advantage (MA) inappropriately restricts access to care that traditional Medicare covers.

    Subcommittee members said that they believe it is of utmost importance that Medicare Advantage delivers people the Medicare benefits they need. Nearly 27 million older adults and people with disabilities are now enrolled in MA, costing taxpayers $350 billion a year. But, “some Medicare Advantage plans are not acting responsibly.”

    People in Medicare Advantage are entitled to the same services as people in traditional Medicare, but they are not always receiving them. MA plans use their own internal criteria for determining whether a service is medically necessary. Some people face serious barriers to care, and some are being denied access to necessary treatment, according to the OIG. Medicare Advantage plans have found ways to game the system.

    One critical problem is the way we reimburse Medicare Advantage. We pay them more if they report that their enrollees have more serious health conditions than people in traditional Medicare. So, to maximize revenues, Medicare Advantage plans send providers to enrollees’ homes to find more diagnoses codes for these enrollees, even though the Medicare Advantage plans provide no more care to them.

    MA can use prior authorization as a way to ensure people do not get care they do not need. But, some MA plans impose inappropriate prior authorization requirements that are out of sync with standard medical practice. Too many providers must jump through hoops to get their patients needed care and to get paid for the care they provide.

    Some MA plans deny care inappropriately at high rates; when claims are appealed, they are reversed 75 percent of the time. Not surprisingly, the GAO found that people disenroll from MA at twice the normal rate in their final year of life, when care is most critical and they need a lot of care.

    As for quality of care, MedPac reports that the data on services Medicare Advantage plans provide their enrollees has been historically inadequate or difficult to substantiate. After a decade, MA plans are “not producing complete and accurate enough records needed for MedPac to conduct oversight activities, to understand differences in service use between MA and FFS, to reflect utilization management techniques, and inappropriate denial of covered care.” The government needs to penalize MA plans that have failed to provide complete and accurate data, as required.

    There’s also no meaningful accounting as to whether people are using their supplemental benefits in Medicare Advantage, how much is being spent on these additional benefits, and whether they are delivered at a reasonable cost. More transparency is needed.

    On top of that, according to MedPac, the Quality Bonus Program, through which the government rewards MA plans delivering better quality care, is fundamentally flawed.

    Agencies representatives also said that private sector efficiencies have not reduced the cost of care. Moreover, the Centers for Medicare and Medicaid Services (CMS) is supposed to be auditing health plans and recouping overpayments. Audits have shown widespread overcharging among Medicare Advantage plans. But, CMS audits of MA plans are not timely. CMS has not completed audits from as far back as 2011.

    In short,  substantial MA reforms are rapidly needed. MA plan incentives are not adequately aligned with those of the people they serve or taxpayers. The Administrator of the Centers for Medicare and Medicaid Services declined to participate in the hearing, though she was invited, reports Fred Schulte of Kaiser Health News.

    Here’s more from Just Care:

     

  • Medicare Disadvantage: How corporate insurers destroy Medicare

    Medicare Disadvantage: How corporate insurers destroy Medicare

    Merrill Goozner writes for Gooznews about the disadvantage of Medicare Advantage, which is administered through corporate insurers. MedPAC, the agency that oversees Medicare, has warned that, if the government continues to overpay Medicare Advantage plans, Medicare’s financing is in serious jeopardy. MedPAC wants the Medicare Advantage payment system overhauled so health plans can’t simply take the government’s money and run.

    Enrollment in Medicare Advantage is growing. People with lower incomes are more likely to enroll in Medicare Advantage to avoid having to buy Medicare supplemental insurance. Unlike traditional Medicare, Medicare Advantage has an annual out-of-pocket cap, albeit one that forces people to pay as much as $7,550 for their care.

    And, though people who join Medicare Advantage are giving up choice of doctors, coverage anywhere in the country, and the freedom to access care without referrals and prior authorizations, they often get partial coverage for dental or hearing care and an out-of-pocket cap; the government pays Medicare Advantage plans about four percent more per person than it spends on traditional Medicare.

    Medicare Advantage companies bid to offer their plans at about 15 percent less per person than traditional Medicare. They can afford to and still make a big profit since they tend to spend around 25 percent less on medical care than traditional Medicare by restricting access. Moreover, the government pays Medicare Advantage plans a higher rate if they can show more diagnoses for their enrollees–upcoding–even if the Medicare Advantage plans don’t provide enrollees with additional services. In 2020, these overpayments cost between $12 billion and $20 billion.

    The government pays Medicare Advantage plans even more money in the form of “quality bonuses,” stemming from self-reported data. MedPAC says this data is of such low quality that it is of no good value.

    The government is hard-pressed to collect back overpayments to Medicare Advantage. It must go to court to do so at substantial expense. Notwithstanding, 346 members of Congress, including progressives such as Ilhan Omar and Barbara Lee, seem to be ok with these overpayments, recently sending CMS a letter praising Medicare Advantage.

    Medicare Advantage is incredibly profitable because of the high fixed capitated payments per member they receive regardless of whether they cover any care for the member. Private equity and venture-backed physician practices have entered that market, as well as the new direct contracting market in traditional Medicare, which also pays companies to cover people’s care on a capitated basis.

    Goozner says that capitated payments “are the best way to incentivize providers to coordinate care, promote prevention, reduce hospitalizations, improve outcomes and prolong lives.” He cites no evidence that capitated payments do indeed lead to coordinated care, improved outcomes or longer lives. In fact, he concedes that the insurers’ “profits depend not on delivering better care but, for the majority of their enrollees, on narrowing networks and using traditional tools like prior authorization to discourage utilization regardless of its impact on outcomes.”

    In fact, while capitated payments do lead insurers to deny coverage for hospitalization and a whole range of costly services, data from the Office of the Inspector General show that often they do so inappropriately, to maximize profits.

    Goozner argues that fee-for-service payments can lead to overtreatment, which cannot be denied. But, fee-for-service payments can also help ensure that people get all the care that they need. In capitated health plans, undertreatment can be a big issue, particularly for people with complex conditions.

    And, Goozner acknowledges that Medicare Advantage has not reduced the cost of care, just transferred money from physicians and hospitals to insurers. Goozner concludes that Medicare Advantage cannot continue in its current form, gouging taxpayers, with little oversight or accountability. Goozner does not say how Medicare Advantage should be overhauled. Meanwhile, Congress has no plan to overhaul it.

    Congress needs to ensure that Medicare Advantage plans are not overpaid, cover all appropriate care and don’t spend their resources designing and implementing ways to avoid paying for costly care. One way to do so might be for it to dictate not only the benefits Medicare Advantage plans cover, but their coverage policies (so they don’t deny care inappropriately) and pay them based on the cost of services they cover. The Connecticut Medicaid managed fee-for-service model is worth exploring.

    Here’s more from Just Care:

  • MedPAC blasts Medicare Advantage

    MedPAC blasts Medicare Advantage

    Every year, most members of Congress send a letter to the Centers for Medicare and Medicaid Services filled with misinformation, drafted by the trade association for the health insurance companies that offer Medicare Advantage plans. This year was no different, even though the evidence remains undeniable that these corporate health plans are driving up Medicare spending, eating into the Medicare Trust Fund and putting tens of thousands of older adults and people with disabilities at serious health risk. Why do these policymakers append their names to this letter?

    The Congressional letter is filled with unfounded accolades about Medicare Advantage. If you are in a Medicare Advantage plan, consider asking your Senators and representatives in Congress whether they signed the letter and, if so, why. If they want to serve your interests, they should be demanding accountability from Medicare Advantage plans not blindly extolling them when the evidence shows that their wrongful delays and denials of care and coverage and inadequate networks are putting members’ health and well-being at risk. Draw from the latest report from MedPAC, the agency that oversees Medicare Advantage.

    According to MedPAC, Medicare Advantage has never produced savings for Medicare, and “the quality bonus program boosts plan payments for nearly all enrollees but does not meaningfully reflect plan quality, from the perspective of enrollees or the Medicare program.” Moreover, “plan-submitted data about beneficiaries’ health care encounters are incomplete, preventing policymakers from understanding plan efficiencies or implementing program oversight.” In other words, these insurers charged with “managing care” can’t even manage data properly or, as likely, they have reason to hide their data from scrutiny. 

    If you’re in traditional Medicare, you should ask your representatives in Congress why they are forcing you to subsidize care for people in Medicare Advantage through higher Part B premiums, and why they are permitting Medicare Advantage to continue in its current form. So long as plans are paid a flat fee upfront, regardless of the amount or cost of care they deliver, they are incentivized to withhold care or steer people to low-cost care providers. It’s a sure way to maximize profits.

    As a result, Medicare Advantage plans require people to get prior authorization before covering their care, often do not have centers of excellence in their networks, and offer lower quality home health, skilled nursing and hospital care than traditional Medicare.

    MedPAC sums up its findings by recommending a “major overhaul” of Medicare Advantage. As designed, the program lacks integrity.

    Note: To be sure, some Medicare Advantage plans are far better than others and cover high-value care. We should never be generalizing about them, and it’s strange that we do. We would never generalize about automobiles or homes or virtually any other good or service in this way, when there is significant variation among them. The Medicare Advantage plans that are hurting their enrollees should be called out. Until we know which ones those are, the government is not meeting the needs of people enrolled in Medicare Advantage.

    Here’s more from Just Care:

  • Don’t judge a Medicare Advantage plan by its stars

    Don’t judge a Medicare Advantage plan by its stars

    When you examine your Medicare plan options during this year’s open enrollment season, do not judge a Medicare Advantage plan by its stars. The government’s star-rating system is deeply flawed. Rather, you should assume that some plans with four and five-star ratings have high denial and mortality rates and low-quality provider networks.

    For sure, you should avoid Medicare Advantage plans with one and two-star ratings. They are few and far between. And, if the Centers for Medicare and Medicaid Services is giving them such a low rating, there’s a reason.

    But, the higher star-ratings are based on measures that can be extremely misleading. For one, the star ratings are determined on an insurer’s group of Medicare Advantage plans, at the Medicare Advantage “contract level.” If there’s a Medicare Advantage plan that’s performing poorly that is assessed with others that are performing better, that poor-performing Medicare Advantage plan will reap the star-rating of its fellow plans. And, people who join that poor-performing plan will have no clue.

    MedPac has proposed changing the star-rating program, which it says is “flawed.” It is “inconsistent with the [MedPac] Commission’s principles for quality measurement.” In addition to giving plans ratings based at the “contract level” and not the individual plan level, the Centers for Medicare and Medicaid Services (CMS) does not focus on population-based outcome and patient experience measures. In addition, plans are rated as compared with one another, not relative to objective performance targets. And, plans are not rated by subpopulations served, so there’s no way to know if a plan with a high rating is actually meeting the needs of its members with special needs and costly conditions.

    Another issue with the star-rating system is that it is not budget neutral. The more plans with four- and five-star ratings, the higher their payments. This means that Medicare Advantage plans are not operating on a level playing field with traditional Medicare.

    How should you choose a Medicare plan? If you want easy access to care from your choice of doctors anywhere in the US and few if any out-of-pocket costs, traditional Medicare is your best option. But, you will need supplemental coverage—Medigap, retiree coverage or Medicaid—to protect yourself financially. To choose a Medicare Advantage plan, talk to your doctor. Pick a plan that has the doctors you want to see and hospital you want to use in its network. And, keep in mind that if you need costly health care services, your out-of-pocket costs could easily be $5,000 for in-network care alone.

    Fierce Healthcare reports that, in 2022, almost seven in ten Medicare Advantage plans have a four-star or five-star rating. That’s up from not even five in ten in 2021.

    Here’s more from Just Care:

  • MedPac: High drug prices mean higher Medicare spending

    MedPac: High drug prices mean higher Medicare spending

    Not only are drug prices rising at the pharmacy for people with Medicare, but drug prices are rising for hospital inpatients as well. MedPac, the agency that oversees Medicare, says rising drug prices are responsible for a huge increase in Medicare Part B drug spending. It wants Congress to rein in these prices.

    During its October 7 meeting, MedPac members discussed Medicare Part B drug spending. For years, MedPac has said that Congress needs to rein in drug prices. But, the pharmaceutical industry has consistently managed to keep Congress from responding appropriately and regulating prices.

    MedPac members focused on prices for infusible and injectable drugs. Medicare pays for these drugs at the average sales price plus six percent. Members believe that Aduhelm, the new FDA-approved drug for people with Alzheimer’s disease, could literally wipe Medicare out. Yet, there is little clinical evidence that Aduhelm actually helps people with Alzheimer’s or helps them enough to warrant its launch price of $56,000.

    Prices are rising on injectable and infusible drugs that have therapeutic alternatives. So, some MedPac members are asking why Medicare should pay the high prices that these drugs command.

    And, some MedPac members believe that Congress must change its payment formula for Part B drugs. Medicare’s payment rate–average sales price plus six percent–creates an incentive for pharmaceutical companies to keep raising their rates.

    Part B drugs have seen nearly 10 percent annual Medicare spending growth over the last 12 years, which MedPac members attribute to higher drug prices. Drugs in the US have higher launch prices than in other countries and higher price increases each year. And, prices keep rising on drugs which have little or no evidence of being effective.

    Democrats in Congress are working on legislation in the reconciliation bill that should rein in these prices. Time will tell if they succeed.

    Here’s more from Just Care: 

  • Expanding Medicare Advantage is a bad idea

    Expanding Medicare Advantage is a bad idea

    In an op-ed for Health Affairs, Ken Terry and David Muehlestein explain why expanding the Medicare private insurance option to everyone or “Medicare Advantage for All” is a bad idea.  Among other things, we can’t distinguish among Medicare Advantage plans or prevent plans from jeopardizing the health and well-being of their members through narrow networks with poor quality providers, cumbersome administrative hurdles, inappropriate delays and denials of care and high out-of-pocket costs. According to one recent NBER paper by Jason Abaluck at Yale et al., picking the wrong Medicare Advantage plan could kill you.

    Here’s what we know:

    • Medicare Advantage per member costs are higher than per member costs in traditional Medicare and have been since Medicare Advantage’s inception.
    • More than one in three people in Medicare Advantage plans are in plans with narrow provider networks.
    • In Alaska and Wyoming, fewer than five percent of people with Medicare are in MA plans. No MA plans are available in Alaska, and Wyoming has only one plan.
    • Medicare Advantage plans are not as good at reining in per-member costs as traditional Medicare. In 2019, MA costs increased 6.3 percent while traditional Medicare costs increased 2.4 percent. On average, per member payments to Medicare Advantage are 2 percent higher than traditional Medicare.
    • Medicare Advantage plans profit handsomely from Medicare, with annual gross margins of $1,608 per member between 2016 and 2018. They are driving up Medicare Part B premiums and draining the Medicare Trust Fund.

    Here’s what we don’t know:

    • Why does Medicare Advantage have faster cost growth per member than traditional Medicare?
    • Which, if any, Medicare Advantage plans offer better quality care than traditional Medicare? The data is not available. Studies that report overall data on Medicare Advantage plans are misleading at best. What’s important to know is individual plan performance. Reports of average performance are analogous to saying that houses in a community are better than average. The question is which ones specifically.
    • Data show that people with high costs tend to leave Medicare Advantage at high rates.
    • Health insurers say they spend 20 to 40 percent less on care than traditional Medicare. We know that they are paying providers about the same rate as traditional Medicare. Which Medicare Advantage plans are withholding needed care and which are preventing costly overtreatment? How much money is going to profits and would that money be better spent on additional benefits?

    Here’s more from Just Care: