CMS Delays a Full Crackdown on Medicare Advantage Plans

It has taken years for the Feds, CMS, MedPac, Congress to catch up with the thieving practice of these healthcare plans. They have mislead the people they sell these plans too with come-ons such as health club ss, etc. Then when it comes time for care, it is delayed or denied. This comes after the plans already have received funding. It is about time Congress did something other than bicker.

NYT could have been tougher . . .

After intense lobbying by insurers, U.S. health officials say changes to reduce overbilling in Medicare Advantage will be phased in over three years.

The Biden administration on Friday finalized new rules meant to cut down on widespread overbilling by private Medicare Advantage insurance plans, but softened the approach after intense lobbying by the industry.

Regulators are still moving forward with rules lowering payments to insurers by billions of dollars a year. But they will phase in the changes over three years, rather than all at once, and lessening the immediate effects.

In the short term, private health plans will still be able to receive payments that Medicare officials do not consider appropriate. The system will eventually eliminate extra funds the insurers receive for covering patients under 2,000 diagnoses, including 75 that appear to be the subject of widespread manipulation.

But the extended timetable could also mitigate concerns raised by health plans, doctors and others that the broad policy change might result in unintended consequences, such as increases in premiums or reductions in benefits for Medicare Advantage beneficiaries.

In the two months since the proposal became public, insurers and their allies had mounted an expensive, loud lobbying campaign, employing television commercials, pressuring lawmakers on Capitol Hill and enlisting thousands to file comments in opposition.

The nation’s top Medicare official acknowledged on Friday that the industry’s outcry influenced the shape of the new rules. Chiquita Brooks-LaSure, the administrator of the Centers for Medicare and Medicaid Services.

“We were really comfortable in our policies, but we always want to hear what stakeholders have to say. She said desire for a slower policy shift was “something that we really heard come through from our comments, and we wanted to be responsive.”

AB: Medicare Advantage Plans wasted no time in implementing procedures to over code and delay payments. For almost a decade, the companies sponsoring these plans pushed back at CMS to repay the over charges incurred on Medicare, the denial of care and delays. We owe Medicare Advantage companies little.

The new payment formula is a reaction to mounting evidence over more than a decade that private insurers have been exploiting a formula to extract overpayments from the federal government. Plans are eligible for extra payments for patients whose illnesses could be costlier to cover, which has encouraged many to go to great lengths to diagnose their customers with as many health conditions as possible. Insurers are collecting tens of billions of dollars in extra payments a year, according to various estimates.

Nearly every large insurer in the program has settled or is facing a federal fraud lawsuit for such conduct. Evidence of the overpayments has been documented by academic studiesgovernment watchdog reports and plan audits.

Despite the excesses and concerns that Medicare Advantage too often denies needed care, about half of all Medicare beneficiaries are now enrolled in the private plans, which receive government outlays of more than $400 billion a year. It remains popular with consumers, who often enjoy lower premiums and benefits — like vision and dental services — that the basic government Medicare plan doesn’t offer.

Soon, Most of Medicare Will Be Privatized

Medicare Advantage is on track to enroll most Medicare beneficiaries this year.

The program has also become profitable for the largest insurance companies. Recent research from the Kaiser Family Foundation found that insurers make about double the gross margins with Medicare plans that they make with their other lines of business. Humana recently announced that it would stop offering commercial insurance to focus on Medicare, which serves older and disabled Americans, and Medicaid, which mostly serves low-income populations.

The new rule will eventually eliminate the extra payments for many diagnoses that Medicare Advantage plans were commonly reporting but that Medicare data did not show were associated with more medical care. Those diagnosis codes included a few that private plans had specifically targeted, like diabetes “with complications” and a form of severe malnutrition that is typically seen in countries experiencing famine.

These Diagnoses Are Much More Common in Medicare Advantage Than Traditional Medicare

With the three-year phase-in, insurers will receive payments that are based on one-third of the new formula in the first year, and two-thirds on the old one. Altogether, Medicare estimates Medicare Advantage plans will be paid 3.32 percent more next year than this year. Under the original limits proposed by the administration, the increase would have been around 1 percent. Previous changes in the payment model have also taken three years.

The policy’s opponents have argued that the change could erode benefits for the plans’ customers. It might have a disproportionate effect on poor and minority populations. The slower rollout did not mollify them.

AB: Lets me see . . . over coding, denying coverage, delaying treatment as we have shown in previous posts. The funds they were provided from their bids one year before the treatment went where? And MA kept the funds.

Mary Beth Donahue, the president of the Better Medicare Alliance, an industry group that spent eight figures on television ads fighting the policy. 

“While we appreciate that C.M.S. moved to a phased-in approach, the underlying policy is fundamentally unchanged. We remain concerned about the unintended consequences for seniors of this risk-adjustment policy.1

The Better Alliance is little more than a front group for Medicare Advantage companies as detailed in footnote 1.

On the other side, the Alliance of Community Health Plans2, a group representing nonprofit insurers, said in a statement that it approved of the new approach:

“We support the risk-adjustment model changes to focus on delivering results for consumers and address underlying incentives to aggressively document.”

Insurers have often challenged the agency’s Medicare actions in court, but it is unclear whether any insurers will contest this policy.

Some advocates and experts said they found the new formula too timid. The Medicare Payment Advisory Commission (MedPAC), which recommends policies to Congress, wrote in a comment letter that the proposed changes, while “directionally correct, are insufficient to address the magnitude of excess Medicare spending” (see 2020 MedPac report).

Mark Miller, a former executive director at MedPAC, urged Medicare to go even further than its initial proposal. He is now an executive vice president at Arnold Ventures3, a policy and advocacy organization closely affiliated with a group that funded television ads defending the change. He described the final approach as a disappointment. “They are essentially bowing to the plans,” he said in an email.

In February, a few weeks after issuing their proposal, top health officials in the Biden administration vigorously defended the change. In a series of tweets, Secretary Xavier Becerra of Health and Human Services characterized criticisms of the policy as “disinformation being pushed out by high-paid industry hacks and their allies.” An interview with The New York Times, Dr. Meena Seshamani, Medicare’s top official, said she was committed to “holding the industry accountable for gaming the system.”

AB: As MedPac reports in Chapter 12 Page 439, Medicare Advantage plans over billed by $12 billion in 2020 alone. And critic of Xavier Becerra’s policy are the hacks?

Ms. Brooks-LaSure’s comments Friday were more measured, emphasizing the perspectives of “stakeholders” in the Medicare program. She said she did not feel that Medicare was folding to industry pressure.

The payment change is one of a series of tough rules for the program recently proposed or completed by the administration. Another proposal would place tighter controls on industry marketing and make it harder for plans to deny care to patients. And a rule finalized in January requires the plans to repay the government for a greater share of overpayments uncovered through audits.

AB: Almost a decade to get to this point? And these are the tough rules?

Though the Medicare Advantage program has long enjoyed strong bipartisan support on Capitol Hill, few leading lawmakers have stepped forward in this round to defend the plans, despite all the lobbying. Republicans on committees that oversee the programs wrote letters to Medicare officials asking technical questions about the change but avoided strong criticism of the policy. On Tuesday, 17 House Democrats sent Medicare officials a letter asking them to delay implementation, but not cancel it.

Bill Cassidy of Louisiana, a physician who is the top Republican on the Senate Health, Education, Labor and Pensions Committee, and Senator Jeff Merkley, a Democrat from Oregon, introduced legislation on Tuesday that taking additional steps to prevent “unreasonable payments, coding or diagnoses.”

Some Footnotes:

1. The Better Medicare Alliance (BMA) is an American 501(c) advocacy and research group supporting Medicare Advantage, a private health insurance option available to Medicare beneficiaries. The organization is funded by the insurance companies  UnitedHealthcareAetna, and Humana, and has been criticized as a front group for the health insurance industry.

BMA was founded in December 2014 by thirteen coalition partners, including Aetna, Humana, UnitedHealth Group, the American Medical Group Association, the Healthcare Leadership CouncilHealthways, the National Association of Manufacturers, the National Retail Federation, and the U.S. Chamber of Commerce. BMA has over 100 organizations listed as allies, including Meals on Wheels America.

2. The Alliance of Community Health Plans (ACHP) represents a unique nonprofit partnership model in health care, bringing together plans and providers on behalf of the patients and communities they serve. ACHP advocates for practical solutions that make health care better, with high-value coverage and care for all.

3. Health care in the United States is more expensive than in any other country in the world, yet the nation’s overall health doesn’t reflect that level of investment. Our system results in uncoordinated and often unaffordable care for patients; inequities exist among communities; and special interests and market manipulations have inflated costs.

Other Commentaries with Additional Resources

Plans to Cut Billions in Medicare Fraud Ignites Lobbying Frenzy, Angry Bear.

Medicare Advantage uses Algorithms to block care for Seniors, Angry Bear.

Direct Contracting and The Medicare ‘Money Machine,’ Angry Bear.

Medicare Advantage has Overcharged FFS Medicare by Billions for Years, Angry Bear.

Medicare Advantage Healthcare and FFS Medicare, Angry Bear.

MA Plans are Scamming Billions from Medicare, Angry Bear.

MA Pricing Increases 8.5%, Traditional Medicare remains the Same so far, Angry Bear.