Healthcare leaders send joint letter supporting 2024 Advance Notice
Proposed changes to MA risk adjustment would result in an average payment cut of 3.7%, AHIP says in its own comment letter.
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Thirty-nine healthcare executives, public health and policy leaders, some with former ties to the Centers for Medicare and Medicaid Services, the CMS Innovation Center and the Medicare Payment Advisory Commission, have submitted a joint letter to the Department of Health and Human Services strongly supporting proposed changes to Medicare Advantage payments.
The signers of the letter support CMS's proposed changes in the Calendar Year 2024 Advance Notice with Proposed Payment Updates for the Medicare Advantage and Part D Prescription Drug Program.
Insurers have objected to CMS's proposed 1.03% increase that AHIP and Better Medicare Alliance contend is actually a more than 2% decrease.
The letter states, "These improvements are long overdue and badly needed to assure appropriate financial payments and stewardship for MA funds, fair payments to enable excellent care for sicker patients, sustainability of the overall Medicare program and security for all beneficiaries."
Letter signer Dr. Don Berwick, a former CMS Administrator said, "CMS has taken a strong and appropriate approach to improving the accuracy of payment in the MA Program."
WHY THIS MATTERS
Continued overpayment to MA Plans represents a fiscally unsustainable long-term policy, according to the letter.
CMS overpayments are the result of hierarchical condition category (HCC) coding used by plans to upcode or to increase the number of diagnoses, the letter said. The resulting overpayments are projected to total more than $600 billion over the next eight years.
In the Advance Notice, CMS proposes to decrease the coding revenue opportunities by eliminating some of the HCC's that have been abused and standardizing the prices associated with categories of codes to avoid upcoding for some conditions, the letter said.
"The net result is projected to be a 1% increase in payments in 2024. In practice, the changes will be concentrated among MA plans and providers that are using the eliminated codes or adding more codes per patient. The proposed changes will leave the MA Plans, in aggregate, in a strong financial position while penalizing those who game the risk adjustment system," the letter said.
Letter signer Dr. Richard Gilfillan, a former deputy administrator at CMS, said, "These increases and ongoing subsidies leave ample funding in the system for plans and providers to continue to provide benefits and appropriate care for MA beneficiaries. The CMS approach actually redistributes spending away from high coding plans with excessive profits towards community-based plans that serve lower income populations."
On Monday, AHIP submitted comments to CMS on the Advance Notice reiterating its concern that the proposal would increase costs and reduce benefits in 2024.
The comment letter included the results of a study commissioned by AHIP from the Wakely Consulting Group. In its study, Wakely reviewed data from a broad range of MA plans and found that the proposed changes to the MA risk adjustment model would result in an average payment cut to MA of 3.7%. The Wakely study found even larger cuts to MA plans that serve dual eligibles; on average, the Advance Notice would cut payments for dual eligibles by 6.4%, AHIP said.
The Wakely study also noted wide differences in results across MA plans and geographic areas.
THE LARGER TREND
MA has grown to just under half of the entire Medicare program. Rather than reducing costs, as originally hoped, Medicare Advantage has increased costs for taxpayers and Medicare beneficiaries, the letter said.
MedPAC has estimated that in 2023 there will be $27 billion in excessive and unwarranted payments to MA Plans, according to the letter. Others have projected these overpayments will cost taxpayers $600 billion over the next eight years.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
