AHIP strikes back against HHS claims over Medicare Advantage payments
Three changes in the Advance Notice would, on average, cut MA rates in 2024 by 2.27%, AHIP says.
Insurers and the administration are battling over whether Medicare Advantage plans are getting a payment increase or decrease in 2024.
On February 1, the Centers for Medicare and Medicaid Services released the 2024 Advance Notice for the Medicare Advantage and Part D Prescription Drug Programs in which CMS said MA plans are expected to receive a 1.03% increase in revenue.
However, three changes in the rate notice would, on average, cut MA rates in 2024 by 2.27%, AHIP president and CEO Matt Eyles said by statement on Friday.
These three changes include: a 3.12% reduction due to the MA risk model that accounts for the health status and demographic characteristics of enrollees; 1.24% lower quality bonus payments under the Medicare Star Ratings program; and increase benchmarks used to set maximum payment rates on average by 2.09%, which is less than half the growth rate in 2023 (4.88%) and well below the projected growth in per enrollee Medicare costs (5%).
Eyles was responding to a Department of Health and Human Services statement also released Friday called "Fact v. Fiction: Biden-Harris Administration is Strengthening Medicare; Private Industry Must Share Obligation to Deliver Quality Health Care for America's Seniors."
"We respectfully disagree with the Secretary's recent statements about the impact of the Administration's proposed 2024 Advance Rate Notice for Medicare Advantage (MA)," Eyles said. "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."
The cuts will have the result of increasing premiums, Better Medicare Alliance has said.
HHS countered in its statement: "Despite industry-funded reporting indicating otherwise, the Biden-Harris Administration is not proposing cuts to Medicare Advantage. In fact, the Administration is proposing to increase Medicare Advantage payments this year by 1%, on top of an 8.5% increase in Medicare Advantage payments last year."
In a press call on February 9, CMS Administrator Chiquita Brooks-LaSure said, "We see a net positive, a little over 1%. Over the last two years MA plans have seen positive updates more so than other parts of the Medicare program."
WHY THIS MATTERS
AHIP also disagrees with a CMS finalized rule on Risk Adjustment Data Validation, calling it "fatally flawed." Eyles has said the rule will raise prices for seniors and taxpayers, reduce benefits for those who choose MA and result in fewer plan options for the future.
In the rule, CMS is cracking down on MA plans that have gotten improper payments by inflating medical diagnoses. This year, through audits, HHS said it would start recovering any improper payments made to insurance companies in Medicare Advantage. These are the first audits since 2007, HHS said.
"Recovering these improper payments and returning this money to the Medicare Trust Funds will protect the fiscal sustainability of Medicare and allow the program to better serve seniors and people with disabilities, today and in the future," HHS said.
HHS added, "Recovering overpayments in Medicare Advantage and holding industry accountable will NOT result in higher premiums for seniors."
THE LARGER TREND
CMS and the HHS Office of Inspector General said the audits have shown that private insurance companies have charged billions of dollars in overpayments to Medicare Advantage plans and increased costs to the Medicare program – as well as taxpayers.
Eight of the 10 largest Medicare Advantage insurers – representing more than two-thirds of the market – have submitted information to inflate payments, HHS said, citing the federal audits.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
