The Better Medicare Alliance is concerned that Medicare Advantage (MA) beneficiaries will face increased premiums and/or reduced plan benefits in 2021 during the upcoming open enrollment period unless the Centers for Medicare & Medicaid Services (CMS) takes action now to minimize uncertainty and instability in the 2021 bid process.
In an April 27 letter to Alex Azar, secretary of the Department of Health and Human Services, and Seema Verma, administrator of the CMS, the Better Medicare Alliance offered recommendations and specific actions the agency can take to help stabilize the market as health plans finalize their bid decisions that will have a direct impact on plan stability, consumer costs, and benefits in 2021.
The organization, a leading MA advocacy and research coalition, urged CMS to issue guidance to inform the bid process by including any or all of the following actions:
- Exclude the coverage of vaccines and novel curative treatments for COVID-19 from the 2021 bids
- Make modifications to data submitted in the risk adjustment payment process
- Provide an update to the normalization factor
“Without clear guidance, the current uncertainty in the health care environment may result in increases in premiums and/or reductions in supplemental benefits offered in 2021, both of which directly impact beneficiary choices and costs,” wrote Allyson Y. Schwartz, president & CEO, of Better Medicare Alliance in the letter.
Schwartz noted that health plans have taken actions to respond to the pandemic by accelerating provider reimbursements, increasing capacity and access to care through expanded telehealth coverage, reducing cost sharing, increasing the supply of medications to meet the needs of high-risk individuals, identifying and reaching out to those at risk, and ensuring care for those with acute illnesses. These plans will continue to support efforts to combat COVID-19 but need CMS to ensure stability and continuity of MA.
Several factors have created unprecedented systemic instability at the same time health plans prepare bids for 2021: They don’t know the costs and availability of a vaccine and curative treatments, and beneficiaries are forgoing preventive care, primary care, and elective procedures due to stay at home orders.
To help stabilize the market, the advocacy group asked CMS to eliminate costs associated with a vaccine and treatment so health plans can be excluded from the capitated monthly payment and paying for treatments/medications separately. In addition to stabilizing the benefits, premiums, and out-of-pocket costs for beneficiaries in 2021, these actions will help plans’ ability to offer innovative supplemental benefits, such as telehealth services and meal delivery programs, that have been necessary to address the public health emergency .
There is also a need for modification of risk adjustment, according to Schwartz. Most states have issued stay-at-home orders that have dramatically reduced the use of preventive and elective health care services in 2020. Because risk adjustment requires documentation of beneficiary diagnoses each year, risk scores for 2021 (which are based on diagnoses from 2020) will not fully reflect the actual health status of members. These data inaccuracies will result in incomplete payment for the actual costs of care for beneficiaries. Thus, the advocacy group asks that CMS use 2019 data to supplement 2020 when calculating risk adjustment payment to accurately reflect the health status of new and existing beneficiaries.
Finally, the group has asked that CMS lower the 2021 normalization factor to provide more accurate payments. The factor that CMS released in the final rate announcement did not account for the projected decrease in 2021 risk score accuracy that will result from decreased utilization in 2020, according to Schwartz. “Lowering the normalization factor is a straight-forward and equitable way to better ensure accurate and adequate payment to all health plans while stabilizing beneficiary premiums and benefits,” she wrote.