Better Medicare Alliance (BMA), a research and advocacy organization that supports Medicare Advantage, says MedPAC’s recommendations don’t consider data that shows lower per-beneficiary government spending in Medicare Advantage, even as Medicare Advantage maintains lower consumer costs and better health.

MedPAC’s March 2022 report to Congress on Medicare payment policy questions the quality of care provided by Medicare Advantage (MA) and once again suggests replacing the current MA Star rating quality bonus program with a new value incentive program.

“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 46 percent of eligible Medicare beneficiaries enrolled in MA plans, good information on the quality of care that MA enrollees receive and how that quality compares with quality in FFS Medicare is necessary,” MedPAC wrote in its executive summary.

It’s essential that beneficiaries and policymakers can compare MA and fee-for-service quality and compare quality among MA plans, commissioners wrote. As a result, MedPAC reiterated its recommendation from its June 2020 report for a new value incentive program that scores a small set of population-based measures, evaluates quality at the local market level, uses a peer-grouping mechanism to account for differences in enrollees’ social risk factors, establishes a system for distributing rewards with no “cliff” effects, and distributes plan-financed rewards and penalties at a local market level.

But MedPAC doesn’t take into consideration the evidence of MA’s better value to the government and beneficiaries, said Mary Beth Donahue, president and CEO of the BMA, in a response to the March report. She referenced a 2021 Milliman report that showed lower per-beneficiary spending and total program costs in MA than FFS Medicare. The MedPAC report also doesn’t recognize published data on consumer cost savings in MA compared to FFS Medicare, which limits the ability to provide a holistic comparison of value between these programs. Medicare Current Beneficiary Survey data shows average consumer savings of $1,640 a year in MA. Furthermore, she disputes the MedPAC’s report characterization of the Star ratings program.

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BMA also refuted the following MedPAC report claims:

MedPAC claim 1: “Private [Medicare Advantage] plans in the aggregate have never produced savings for Medicare”

BMA response: The government spends $949.39 per-member-per-month for beneficiaries in FFS Medicare compared to only $942.53 for beneficiaries of a similar health status in MA, according to an October 2021 actuarial analysis from Milliman. “MA is still less expensive in total program costs than FFS”  according to the Milliman report, adding, “findings suggest that overall MA offers significant value to the federal government.”

MedPAC claim 2: “In 2022, [MA] plan payments remain higher than FFS spending levels.”

BMA response: In addition to the Milliman report findings, BMA said MedPAC’s arguments related to government spending on MA fail to account for the value that MA provides to consumers. For example, MA beneficiaries report an average of $1,640 less per year in total health expenditures than enrollees in FFS Medicare.

MedPAC claim 3: “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.”

BMA response: MA plans are held to strict quality standards through the Centers for Medicare & Medicaid Services’ (CMS) Star Ratings program, which, CMS explains, provides “meaningful information about the quality of each plan.” For 2022, a record-setting 90 percent of beneficiaries in Medicare Advantage Prescription Drug (MA-PD) plans are enrolled in 4- or 5-star plans. A CMS fact sheet shows that average Star Ratings for quality measures like “getting needed care,” “customer service,” “rating of health plan,” “getting appointments and care quickly” and “care coordination” reached their highest levels in the last four years. This comports with separate research on MA quality from Avalere Health which found higher rates of preventive care and screenings and lower rates of avoidable hospitalizations, compared to FFS Medicare.

MedPAC claim 4: “…we have no data about their [MA supplemental benefits’] use nor information about their value.”

BMA response: Research from Milliman released earlier this year provides a clear picture of MA supplemental benefit offerings for 2022 and how many benefits are being targeted to chronically ill seniors. The data shows, for example, that more than 1.6 million beneficiaries with congestive heart failure are targeted for receiving extra benefits in 2022, as are more than 1.5 million diabetics.

MedPAC claim 5:Coding intensity inflates payments to MA plans and undermines the goal of plans competing to improve quality and reduce health care costs.”

BMA response: By beneficiaries’ own self-reporting, as captured in CMS Medicare Current Beneficiary Survey (MCBS) data, MA beneficiaries tend to be more medically complex and socially at-risk than their FFS Medicare counterparts. MA beneficiaries are more likely to self-report having three or more chronic conditions, they are more likely to be food insecure, they are more likely to self-report diagnoses of diabetes, COPD, congestive heart failure, or dementia, and more than a quarter of them say they need help with one or more instrumental activities of daily living (IADLs).