The atmosphere around the future of Medicare Advantage has been fraught since the announcement of the final rule on Risk Adjustment Data Validation (RADV).
The rule’s new methodology will be applied to plans dating back to 2018, and the Centers for Medicare and Medicaid Services (CMS) anticipates it will recoup nearly $50 billion for fraudulent or mistaken risk assessments in a ten year period. The agency also announced in the 2024 MA and Part D Advance Notice that it would reduce Quality Bonus Payments (QBP) for star ratings and it anticipates that MA revenue will only increase by 1.03%
And payers are very upset by the rule and notice. As Becker’s notes, payer executives have let investors know that they are still in the evaluation process for this rule, which leaves some very important questions unanswered. These include the way that CMS will pick plans to audit, the methodology used for audits under the new rule, and whether or not the CMS audits will be coordinated with the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS).
While payers try to calm investors, payer advocates are fully engaging their resources to combat the new rule. For example, the Better Medicare Alliance (BMA), the largest MA lobby, contracted Avalere Health to perform a study that concluded the information contained in the 2024 Advance Notice would reduce Medicare Advantage spending by $540 per Medicare Advantage enrollee.
BMA CEO Mary Beth Donahue then called this anticipated reimbursement reduction “spending cuts,” and indicated that spending cuts on the part of CMS could result in overall reductions of benefits for MA beneficiaries.
HHS Secretary Xavier Becerra did not receive the term “cuts” particularly well, likely because Congressional debates on the debt ceiling have raised the possibility of cuts to the entire Medicare program — something which President Joe Biden and House Speaker Kevin McCarthy both wish to avoid. Becerra called the suggestion of cuts “disinformation being pushed out by hacks and their allies,” Fierce Healthcare reports.
Any claim that this administration is cutting Medicare is categorically false. Leave it to deep-pocketed insurance companies and industry front groups to characterize this year’s increase in Medicare Advantage payments as a cut.
Insurance lobby America’s Health Insurance Plans (AHIP), shot back at the Secretary that the reduction in payments to the risk model, the lowering of bonus payments and the low projected benchmarks was tantamount to spending cuts. Once again, the lobby threatened enrollees’ benefits packages:
It will have real-world consequences in 2024 for the more than 30 million seniors and people with disabilities who choose MA—they will face increased costs and reduced benefits.
AHIP also submitted comments to CMS Administrator Chiquita Brooks-LaSure, expressing support for some proposals but requesting a revision to the proposed MA rule. According to Healthpayer Intelligence, it also said that the implementation of Inflation Reduction Act (IRA) changes to Medicare Part D could further negatively impact star ratings:
While we appreciate CMS proposing to decrease the weight of survey measures relative to the weight of clinical outcome measures as AHIP has previously recommended, the overall impact of the Star Ratings proposals would be higher premiums and/or reduced benefits for enrollees, impacts that would disproportionately affect seniors and people with disabilities in underserved communities without increasing quality.
But AHIP wouldn’t be left without a rebuttal. Benefits Pro reports that Senate Finance Committee Chair Ron Wyden (D-Ore.) sent his own letter to Administrator Brooks-LaSure to ask her to approve that very same rule.
[I]t has become clear that not all enrollees are seeing that value or being put first. I strongly support the proposed rule as it seeks to restore important protections against deceptive and fraudulent marketing tactics; expands access to non-physician behavioral health providers; and promotes health equity for historically underserved communities.
Kaiser Family Foundation attempted to settle the dispute late last week:
Current efforts to improve the accuracy of payments made by the federal government, and improve program integrity, are unlikely to have a major impact on the program, the insurance industry or beneficiaries, given relatively generous payments to plans and the robustness of the Medicare Advantage market.
Regardless of the rule’s future, Medicare Advantage may have even greater concerns on the horizon as plan enrollment increased only 5.5% in 2023, down from 9% in 2022, Modern Healthcare reports.
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