Senate calls on CMS to keep Medicare Advantage rates stable

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More than 60 members of the U.S. Senate have sent a letter to the Centers for Medicare and Medicaid Services urging the agency to protect Medicare Advantage by keeping rates stable, as CMS is expected to finalize its MA rate announcement for 2023 by April 4.

Senators extolled the virtues of Medicare Advantage, citing its varied benefits – meal services, telehealth, in-home care, nutrition services, hearing, dental and the like – and claimed that the program has been instrumental in helping enrollees stay healthy and safe during the COVID-19 pandemic.

That, the senators said, is the primary reason they're urging the Biden Administration to maintain stability in the MA program, as they called for advancing flexible in-plan benefit offerings and promoting care coordination. 

"We are committed to ensuring that our constituents who rely on Medicare Advantage enjoy the same access to affordable benefits in order to get the care they need, particularly as they navigate the persistent challenges of the pandemic," the letter read.

WHAT'S THE IMPACT 

The senators said they appreciated the administration's "ongoing commitment to preserve and strengthen the program, as demonstrated in the proposed CMS 2023 Medicare Advantage and Part D Advance Notice."

CMS released that notice earlier this month, with the stated intent of creating more choices and providing affordable options for consumers.

The agency's end goal for Medicare Advantage is to match CMS' vision for its programs as a whole, which Administrator Chiquita Brooks-LaSure said is "to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program."

CMS is proposing an effective growth rate of 4.75% and an overall expected average change in revenue of 7.98%, following a 4.08% revenue increase planned for 2022.

The proposed rule elicited reaction from various organizations, including Better Medicare Alliance.

"As we continue to review the Advance Notice in further detail, we appreciate that CMS has offered a thoughtful proposal that will help ensure stability for the millions of diverse seniors and individuals with disabilities who count on Medicare Advantage," Mary Beth Donahue, president and CEO of the Better Medicare Alliance, said, adding that the proposal furthers the shared goal of improving health equity.

"Medicare Advantage has proven its worth for seniors and taxpayers – providing lower costs, meaningful benefits that address social determinants of health, better outcomes and greater efficiencies for the Medicare dollar," she said. "A stable rate for 2023 ensures this work can continue. On behalf of our 170 Ally organizations and over 600,000 beneficiary advocates, we applaud CMS for putting seniors first by issuing an Advance Notice that protects coverage choices, advances health equity and preserves affordability for beneficiaries."

AHIP also responded, with President and CEO Matt Eyles pointing out that for 2022 the average Medicare Advantage monthly premium dropped to $19, down more than 10% since 2021.

"Medicare Advantage enjoys strong bipartisan support because it provides America's seniors and people with disabilities with access to affordable, high-quality healthcare services," said Eyles.

CONCERNS

While groups urge to keep Medicare Advantage stable, the Medicare Payment Advisory Commission has said the program's expansion to an ever-growing percentage of Medicare beneficiaries may be cause for concern.

Enrollment has grown to about 10% annually, said MedPAC in written testimony published earlier this month. Last year an estimated 46% of eligible Medicare beneficiaries were enrolled in plans. If the trend continues, the majority of seniors will be enrolled in MA plans, rather than original Medicare.

MA is costing the government more than the traditional program. Private plans that accept full risk, which have been available in Medicare since the mid-80s, have never yielded aggregate savings for the program, MedPAC said. The group estimates that 2022 Medicare payments to MA plans equal about 104% of what Medicare would have spent on those same beneficiaries in a traditional fee-for-service model.

Because of that, in MedPAC's view, the shift toward MA may actually worsen Medicare's sustainability, and makes the need for structural improvements to the program more urgent.

MedPAC advanced a number of suggestions meant to improve that situation. One is to develop a risk-adjustment model that uses two years of diagnostic data instead of one, which would make fee-for-service diagnostic data more complete and reduce the marginal benefit for MA plans of coding additional diagnosis; the more intense coding in MA relative to FFS leads to higher payments to plans and raises program spending, according to MedPAC.

In 2020, coding differences boosted payments to plans by about $12 billion, numbers showed, which undermines incentives for plans to improve quality or reduce costs, MedPAC said.

MedPAC also took issue with the MA quality bonus program, which provides higher payments to plans that have a rating of four stars or more on a five-star scale. In the organization's view, the QBP uses too many quality measures focused on process rather than outcomes and patient experience. Further, these star ratings are determined at the MA contract level, which often cover larger geographic areas and may not be a reliable indicator of care quality in a more local area – a problem that's exacerbated by plan sponsors consolidating contracts to artificially improve their star ratings, an issue that's been partially addressed at the legislative level.

The group recommended the QBP be replaced with a value incentive program that would, among other things, evaluate quality at the local market level and finance the MA quality system in a budget-neutral manner to be more consistent with Medicare's fee-for-service quality payment programs, which are either budget neutral or produce program savings because they involve penalties.

THE LARGER TREND

The U.S. Senate is now the second chamber of Congress to urge CMS to maintain MA rate stability. In late January, the House of Representatives drafted its own letter to CMS, urging the agency to "provide a stable rate and policy environment that ensure Medicare Advantage can continue to provide the affordable, high-quality, patient-centered coverage our constituents rely on every day." 

They went on to express a desire to work with CMS "to ensure that, through Medicare Advantage, tens of millions of older adults continue to have access to comprehensive, affordable, health coverage choices."

The Congressional letter followed polling in Morning Consult that shows 92% of Medicare Advantage beneficiaries consider a candidate's support for the program as important to earn their vote.

In urging CMS to maintain the stability of the Medicare Advantage program, the representatives pointed to statistics from Kaiser Family Foundation showing that enrollment in MA has almost doubled over the past decade, with more than 43% of Medicare beneficiaries choosing to enroll. 

The signers also highlighted CMS' own data showing 90% of MA enrollees are in a plan with a quality rating of four or more stars. They maintained MA "consistently delivers better care and value that provides beneficiaries with more coordinated access to high-quality providers and lower avoidable hospital and emergency department visits."

Several major insurers, including UnitedHealthcare, Cigna and Centene have expanded their MA footprints considerably in recent months, seeing potential market opportunity in the program's still-increasing popularity.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com