The battle over Medicare Advantage payment rates and policies has escalated in recent weeks as the date for the release of the of final Calendar Year 2024 payment rates and policies nears.
The Centers for Medicare & Medicaid Services (CMS) is expected to finalize the payment rates for 2024 by April 3rd and has pushed back against industry arguments that the Advance Rate Notice will lead to a cut in payments to Medicare Advantage health plans. Xavier Becerra, secretary of the Department of Health and Human Services, even posted on Twitter that “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 proposed increase in Medicare Advantage payments as a pay cut.”
RELATED: HHS rebuts claims that Advance Notice will lead to MA plan payment cuts
And last week, U.S. Senator Elizabeth Warren (D-Mass.) defended CMS’ proposals during a Senate Finance Committee hearing, claiming that big insurance companies and their lobbyists are using “scare tactics” and peddling misinformation to protect their billions in profits and scare beneficiaries into opposing the rule.
But industry trade groups say they have grave concerns about the proposed changes for the 2024 plan year, arguing that they could jeopardize high-value, high-quality care, and advances made in health equity. In addition to new payment rates, the Advance Notice proposes a new risk score model for the aged/disabled population, which would use ICD-10 instead of ICD-9 codes and removes more than 2,000 diagnosis codes that no longer map to Hierarchical Condition Category (HCC) codes eligible for payment. These changes will impact coding variations on risk scores that impact conditions such as depressive disorder and cardiovascular disease.
AHIP expressed concerns that the proposed risk adjustment model changes could have a negative impact on dual eligibles. More than half of those beneficiaries are enrolled in Medicare Advantage, including more than five million who are enrolled in dual-eligible special needs plans. Cuts to Medicare Advantage, the organization wrote, will impact payment for treatment and care for members diagnosed with major depressive disorder, diabetes with chronic conditions, or vascular disease, which disproportionately affect dual eligibles.
Health plans and industry groups have urged CMS to postpone implementation of the Medicare risk adjustment changes so they can better assess the potential impact of the provisions. The 30-day comment period after the Advance Notice was released didn’t provide enough time to fully analyze the proposals, they said.
However, independent analyses conducted by consulting groups have caused concern. A report by Avalare indicated that as a result of the proposed changes, Medicaid Advantage beneficiaries could face an average reduction of $540 per beneficiary. The payment cuts could threaten important benefits, such as transportation to medical appointments, healthy meals, vision exams, and preventative dental work, said Mary Beth Donahue, president and CEO of Better Medicare Alliance, a research and advocacy organization that supports Medicare Advantage and funded the Avalere report.
RELATED: Study: Advance Notice could reduce MA benefits by $540 per beneficiary in 2024
A recent white paper by Wakely noted that if the model is fully implemented as CMS proposed, the financial impact to Medicare Advantage plans and risk-bearing providers will vary widely. In addition, the firm said, plans and providers will have limited time to react as 2023 diagnoses, which drive 2024 risk scores, will already be partially complete.
Republican members of the Senate Finance Committees have also expressed concerns and have urged CMS against rushing implementation of major Medicare Advantage changes.
“Some of the proposal’s modifications to risk adjustment, for example, could trigger severe and unintended consequences for seniors. Given the complexity of the policy changes in question, the swift enactment of these reforms could spur confusion and uncertainty among health care providers and plans,” they wrote in the March 14 letter to Becerra and CMS Adminstrator Chiquita Brooks-LaSure.
Conversation became heated during a recent Kaiser Family Foundation web event about the controversy over Medicare Advantage when panelists disagreed about the impact of the proposed changes. Tom Kornfield, senior consultant, Avalere, and Richard Kronick, professor of family and preventive medicine and adjunct professor of political science, UC San Diego, cited different studies that each had a hand in writing to support their positions.
Kronick supports the CMS proposals as a “good beginning” to address overpayments to Medicare Advantage plans for more than 15 years. He said the average risk score for Medicare Advantage members was 20 percent higher than the average risk score for those enrolled in original Medicare even though the plans may attract healthier members. This may be because Medicare Advantage plans are reporting more diagnoses and providers in fee-for-service are underreporting diagnoses.
“Medicare Advantage members are no sicker and are probably somewhat healthier than fee-for-service beneficiaries,” he said, noting that sicker patients are more likely to exit Medicare Advantage. “The people who do disenroll are more likely to be people with high levels of health care needs seeking apparently the greater freedom from the lack of network restrictions in fee-for-service Medicare.”
Kornfield questioned CMS’ intent of removing 20 percent of the codes that indicate vascular disease, blood disorders, and substance abuse disorders. “That’s not trivial,” he said. “If the goal is for plans to code accurately and be paid based on the health status of their enrollees, then I’m concerned that these changes, which are meant to get at the coding intensity question, could have the potential to do more harm than good.”