RISE summarizes recent regulatory-related news.
The Commonwealth Fund: Many older Medicare beneficiaries struggle to pay their medical bills
A new data brief from The Commonwealth Fund examines the financial burden of care that people age 65 and older with Medicare face and how that burden differs for people with traditional Medicare and Medicare Advantage (MA). The information is based on the responses of 1,604 seniors enrolled in Medicare who took part in The Commonwealth Fund’s 2022 Biennial Health Insurance Survey.
Among the key findings:
- About one in five adults aged 65 and older with Medicare (19 percent) were underinsured, which means their out-of-pocket expenses are high relative to their income. People with low incomes, below 200 percent of the federal poverty level (FPL), had the highest rates of underinsurance, with no significant differences between people in MA and traditional Medicare, after accounting for differences in income.
- More than one in five (23 percent) adults ages 65 and older with Medicare struggled to afford their premiums. For those with incomes under twice FPL, two of five (39 percent) reported they struggled to afford premiums.
- Cost-related problems accessing dental care were reported by more than a quarter (27 percent) of older Medicare enrollees. Thirty percent of those in MA and 24 percent enrolled in traditional Medicare reported they delayed or skipped dental care because of the cost. Similar shares of older adults with either type of Medicare coverage reported skipping prescriptions, recommended treatments, or needed specialty care because of the cost.
- About one in six (18 percent) older adults with Medicare reported problems with medical bills and debt, including more than one in five (23 percent) of those with incomes below 200 percent of FPL.
Bright Health agrees to repay CMS for $380M risk adjustment shortfall
Bright Health Group announced this week its insurance subsidiaries in Colorado, Florida, Illinois, and Texas have entered into an agreement with the Centers for Medicare & Medicaid Services (CMS) to repay $380 million they owe through the Affordable Care Act’s (ACA) risk adjustment program.
The ACA ‘s risk adjustment program transfers money from plans with healthier, lower-risk members to plans with sicker, riskier members. This transfer removes the incentive for health insurers to “cherry pick” low risk enrollees and instead focus on selling health insurance and managing the health of people regardless of their age or chronic conditions. CMS calculates the issuer’s risk, collects charges, and distributes payments to plans.
Under the agreement with CMS, the principal amount is due in 18 months with an 11.5 percent annual interest rate. So far this year Bright Health, which is exiting the health insurance business, has paid $1.5 billion to the risk adjustment program, which represents 80 percent of its final ACA insurance business risk adjustment obligations. It intends to pay the remaining amount due with proceeds from its pending sale of its California Medicare Advantage business.
Study: MA lowers utilization, expenditures compared to traditional Medicare
New research from Harvard Medical School and Inovalon finds that MA significantly reduces hospitalizations and expenditures compared to fee-for-service (FFS) Medicare, while providing comparable access to high quality primary care.
The research uses a large, unique, and nationally representative Medicare population to shed light on how health care utilization and expenditures differ between MA and FFS Medicare beneficiaries. The study finds that:
- MA enrollees have more than 50 percent fewer inpatient hospital stays and 22 percent fewer emergency department visits than those enrolled in FFS.
- MA provides comparable primary and routine care with only seven percent fewer primary care provider visits and similar prescription drug use compared to FFS beneficiaries.
- Overall health care costs for MA are 12 percent lower than for similar FFS beneficiaries using Medicare price-normalized expenditures and adjusting for differences in beneficiary demographic, clinical, and socioeconomic characteristics.
- Medicare beneficiaries who enroll in FFS at age 65 have a 35 percent higher health care utilization in the two years following enrollment relative to the two years before they were enrolled in commercial insurance coverage. In contrast, utilization among those who enrolled in MA is relatively stable.
The study is published in the white paper, “Utilization and Efficiency Under Medicare Advantage vs. Traditional Fee-for-Service,” and is the second in an ongoing series of studies led by Inovalon and Harvard researchers. The study adjusts for differences in who enrolls in each program by bringing in member characteristics from enrollee information collected prior to Medicare enrollment and a carefully designed statistical methodology to assure apples-to-apples comparisons.
“Our research credibly and definitively measures the efficacy of MA relative to FFS and indicates that the MA program is making health care more efficient without sacrificing quality of care for patients,” said Boris Vabson, Ph.D., health economist at Harvard Medical School and a lead researcher on the project. “This study would not be possible with conventionally available data sources. Inovalon’s data provided us with unique visibility into the inner workings of Medicare, for a large and nationally representative population, and allowed us to follow individuals as they transitioned from commercial to Medicare coverage."
Recommended reading: PAD and the impact of the new CMS HCC risk adjustment model
The new version (v28) of the CMS HCC risk adjustment model includes changes in the MA capitation rate and risk adjustment methodologies, which will impact risk adjustment factor (RAF) scores and how health plans and medical practices manage patient risk and allocate resources. In a newly published interview, Biomedix’s Christian Trygstad reviews changes to the model around Peripheral Artery Disease (PAD) with Shannon I. Decker, Ph.D., MBA, MEd, principal at VBC One, and what organizations should do to prepare.
In the article, Decker explains that PAD will continue to risk adjust in v28. Indeed, PAD with rest pain will now be documented with HCC code 264 and has a RAF of 0.455, which represents a nearly 20 percent increase in RAF. However, PAD without complications will stop risk adjusting in v28.
She suggests that medical practices test at-risk members for PAD even if they aren’t experiencing any complications. The condition can be effectively managed in the primary care setting if identified early and treatment options are more patient friendly and less expensive in the early stages. And, Decker says, roughly two-thirds of all MA members experience PAD. Practices with a focus on MA members and MA plans should implement PAD assessment programs immediately. Click here to read the entire interview and Decker’s recommendations.
CMS: Medicare Part B beneficiaries to see savings on 34 prescription drugs
CMS has announced that Medicare Part B beneficiaries may save on out-of-pocket costs for 34 prescription drugs beginning October 1. As part of the Inflation Reduction Act, beneficiaries may save between $1 and $618 per average dose between October 1 and December 31, 2023, depending on their individual coverage. By reducing coinsurance and discouraging drug companies from increasing prices faster than inflation, CMS said the policy may lower costs for some people with Medicare and reduce Medicare program spending for costly drugs. The Part B drugs impacted by this coinsurance adjustment may change quarterly.
KFF: 1 in 5 nursing facilities would meet proposed requirements for nursing staff hours
Eighty-one percent of nursing facilities would need to hire additional staff to comply with new nursing staff requirements that the CMS proposed earlier this month, according to a new analysis from KFF. Researchers used currently available data for both registered nurse and nurse aide hours from the Nursing Home Compare dataset, which includes 14,591 nursing facilities (97 percent of all facilities, serving 1.17 million or 98 percent of all residents) that reported their staffing levels in August 2023.
Under the proposed rule, 19 percent of nursing facilities would currently meet the minimum staff hours for registered nurses and nurse aides.
A smaller share of for-profit facilities would meet the proposed staffing requirements. Compared to 60 percent of non-profit and government facilities, 90 percent of for-profit facilities would need to hire additional nursing staff. Four in five for-profit facilities would need to hire nurse aides compared to about half of non-profit and government facilities.
Current compliance with the proposed new standards also differs dramatically by state. In Alaska, 100 percent of nursing facilities would meet the staffing requirements, compared to just one percent of facilities in Louisiana. In 29 states, less than a quarter of nursing facilities could meet these requirements. In six states, over half of facilities could do so.
Broad workforce shortages, hardship exemptions, and issues with enforcement and funding could influence the final rule and also limit its impact, KFF said in the announcement. CMS’ proposed rule was released on September 1 and comments are due by November 6.
AMA: 6 findings on commercial payer coverage of digital medicine
The American Medical Association (AMA) issued new research this week examining the status of digital health advancement in the commercial health insurance industry by comparing current coverage across private health insurers and exploring how coverage decisions are made for digitally enabled care services.
“While the United States has entered an era when digitally enabled care is integrated with in-person care, the potential of this hybridized care model is not yet fully realized,” said AMA President Jesse M. Ehrenfeld, M.D., M.P.H., in the study announcement. “The lack of commercial coverage can be a roadblock or bottleneck to affordable access to digital medicine services for more than half the U.S. population who count on private health insurance. Barriers to clear and consistent coverage policies must be addressed for the pace of digital health progress in medicine to match the technology’s promising potential.”
The research, completed by the AMA and Manatt Health, summarizes publicly available coverage policies created by 16 commercial health insurers for 21 unique digital medicine services, as identified and defined by reporting codes found in Current Procedural Terminology (CPT®), the nation’s leading medical terminology for reporting health care procedures and services. The 21 digital medical services fall into four distinct categories: remote physiologic monitoring, remote therapeutic monitoring, electronic consultations, and electronic visits. Researchers found:
- Lack of coverage alignment across commercial payers, Medicare, and Medicaid: Commercial payers trail Medicare in the coverage of digital medicine services explored by the research. Medicare and Medicare Advantage (MA) plans cover all 21 digital medicine services. Yet private health plans in MA program do not offer the same coverage in the commercial market. Coverage by Medicaid is more limited, though it has been expanding over time.
- Inconsistent coverage policies within the commercial market: Among the digital medicine services explored by the research, most commercial payers cover remote physiologic monitoring, while several are still considering coverage of the newer remote therapeutic monitoring. Coverage of electronic consults and electronic visits is less consistent.
- Inconsistent levels of transparency for coverage policies within the commercial market: Transparency of coverage policies for digital medicine services is highly variable across commercial payers. While some plans have publicly available clinical coverage policies related to digital medicine services, many have no publicly available information or the information that is available is difficult to access or dated. A lack of transparency prevents patients and physicians from making informed decisions.
- Time lag for determining coverage policies within the commercial market: Commercial payers contend there is no specific timeline for reviewing and making coverage decisions about the digital medicine services explored by the research. It can be several years before a digital medicine service is covered by a commercial payer, creating uncertainty and complicating planning and investment in digital health programs.
- Limited widespread utilization of most new digital medicine services: Commercial payers contend that a limited number of health care professionals leverage the digital medicine services explored by the research. Payers are eager for more information on the impact and quality of digital medicine services to inform coverage decisions.
- Partnerships between commercial payers and health tech companies: Commercial payers are partnering with health tech companies to provide direct access to digital services for specific disease areas. While these programs offer access to innovative digital health solutions, they are often disconnected from a patient’s medical home or existing primary care physician, which can further fragment care.