Among Vague Language and Proposals, Real Harm to Medicare Beneficiaries
On October 3, 2019, President Trump issued his “Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors” (EO).[1] Much of the language of the EO is vague, and much is unknown about what polices might emerge from it. Some of the proposals are clear in their intent, and would cause clear harm to Medicare beneficiaries. While other proposals are ambiguous in their language, we can generally infer intent based upon previous actions by this Administration. This document expresses some of the Center for Medicare Advocacy’s concerns about the impact on Medicare beneficiaries, and the Medicare program in general, if some of the proposals outlined in the President’s Executive Order are implemented. Below we offer our response to some, but not all, of the proposals.
1. Exacerbating the Growing Imbalance between Traditional Medicare and Medicare Advantage
Provisions of the EO exacerbate an existing imbalance between traditional Medicare and the Medicare Advantage (MA) program, and demonstrate the Administration’s ongoing efforts to maximize enrollment and the scope of coverage in MA plans.
Policies Already Favor Medicare Advantage
Over the last several years, a number of legislative, regulatory and policy changes have combined to create an imbalance between traditional Medicare and MA.[2] For example: coverage expansions such as the ability to provide new supplemental benefits have been advanced in MA, but not in traditional Medicare; enrollment periods have changed to favor MA; and the scope of coverage by Medicare supplemental insurance policies (Medigaps) has been restricted for some individuals. Despite provisions of the Affordable Care Act that reined in excessive overpayments to MA plans, there is still evidence that MA is costing the Medicare program more than traditional Medicare spends per individual, with mixed health outcomes.[3]
In recent years, the imbalance has been exacerbated by a concerted effort on the part of this Administration to steer beneficiaries toward enrollment in private MA plans through various means, including the program’s outreach and enrollment materials and marketing policies, rather than providing objective, neutral information about coverage options.[4]
Executive Order Focuses on Further Favoring Medicare Advantage
Section 3 of the EO states that within a year, the Secretary is directed to, among other things, “ensure that, to the extent permitted by law, FFS [aka traditional, or Original] Medicare is not advantaged or promoted over MA with respect to its administration.”
Given the growing imbalance between traditional Medicare and MA, it strains credulity to posit that Medicare Advantage is somehow being disadvantaged “with respect to its administration.”
Although this EO provision lacks specifics, a press call the day that the EO was issued is illuminating.[5] In outlining some of the provisions of the EO during the press call, Secretary of Health and Human Services Azar clarified the goal to “ensure that, as much as we can, our Fee-for-Service Medicare program is not advantaged or promoted over Medicare Advantage with respect to its administration.” Secretary Azar continued: “So the executive order commissions us to examine all practices, regulations, guidance to just make sure that we’re not steering people into Fee-for-Service, as opposed to giving them a genuine choice of Medicare Advantage or Fee-for-Service.” He noted: “So we’ll be looking at all of those issues: how does the enrollment process work when new people come in; how the annual enrollment process works; are we providing adequate information through the various plan-finder tools to ensure people can make informed choices, make sure there’s no financial disincentive to being in MA versus Fee-for-Service. So really, across the board that’s — the executive order is the initiation of the process now of examining all of that […]”
Change in Default Enrollment?
These comments suggest that this Administration might seek changes in how people initially choose their Medicare coverage. The Medicare statute currently allows the Secretary of HHS to establish procedures under which an individual who is enrolled in a health plan (offered by an organization that also offers MA plans) at the time of the initial election period and who fails to elect to receive coverage other than through the organization to be deemed to have elected the MA plan offered by the organization (a process previously called “seamless conversion” enrollment).[6]
Until recently, in other words, subject to CMS approval, an insurance company could enroll an individual who was covered by the company’s product into the same company’s MA product upon becoming eligible for Medicare unless the individual “opted out.” Given the minimal notice requirements related to and sporadic exercise of such enrollments, advocates found that it was possible for individuals to be enrolled in an MA plan without express consent.[7] In October 2016, CMS temporarily suspended new seamless conversion enrollments pending revision of guidelines for this process.
A final rule issued in 2018 narrows the scope of seamless conversion enrollments to individuals dually eligible for Medicare and Medicaid (dual eligibles) into MA Special Needs Plans for dual eligibles (D-SNPs) only, with several conditions, including state and CMS approval, and from affiliated Medicaid managed care plans.[8] The Secretary’s statements suggest that HHS might reverse course and again allow insurance carriers to maintain enrollees who become eligible for Medicare.
Promotion of Medical Savings Accounts
Section 3 of the EO directs the Secretary of HHS to “encourage innovative MA benefit structures and plan designs, including through changes in regulations and guidance that reduce barriers to obtaining Medicare Medical Savings Accounts”.
Medicare Medical Savings Accounts, or MSA plans, are similar to a Health Savings Account plan outside of Medicare in that they combine a high deductible health plan with a savings account into which the plan deposits money that can be used to pay for health care costs before the deductible is met.[9] In 2018, approximately 6,000 people were enrolled in MSAs[10], out of 20.4 million people enrolled in MA plans overall (and over 60 million people with Medicare in 2019).
HSAs and MSAs are generally designed for the healthy and wealthy.[11] They are premised, in part, on the notion that giving people “control” over how they spend their health care dollars leads to people making optimal choices about the care they receive and from whom, although this is a false premise. Most people do not make optimal choices for a variety of reasons, including lack of transparency around health care prices and quality of care.
The primary purpose in expanding such plans would be to help the healthy and wealthy, which should not be a health policy goal given all of the people in our country who are uninsured, underinsured and otherwise face significant barriers to accessing affordable, quality health care.
Erosion of Network Adequacy?
MA plans must meet network adequacy requirements, which dictate the availability and number of contracted providers based on type of provider and time and distance guidelines which vary, in part, based on population density. Section 4 of the EO seeks to “provide beneficiaries with improved access to providers and plans by adjusting network adequacy requirements for MA plans.” This is to be accomplished, in part, through “the enhanced access to health outcomes made possible through telehealth services or other innovative technologies.”
This appears to be a vehicle to weaken network adequacy rules by relying on telehealth providers to circumvent physical time and distance requirements. Will CMS allow MA plans to meet these guidelines based on “virtual” networks? How much will CMS allow the inherent limitations of medicine practiced via telehealth to substitute for hands-on care?
2. Provisions Pushing People Away from Medicare
Section 1 of the EO states “Rather than upend Medicare as we know it, my Administration will protect and improve it.” As noted by Kaiser Health News, however, the EO “includes provisions that could significantly alter key pillars of the program by making it easier for beneficiaries and doctors to opt out.”[12] If implemented the EO would upend Medicare in many ways.
Opting Out of Medicare
Section 11 of the EO directs the Secretary, within 180 days, in coordination with the Commissioner of Social Security, to “revise current rules or policies to preserve the Social Security retirement insurance benefits of seniors who choose not to receive benefits under Medicare Part A.”
It has long been a conservative goal to allow individuals to opt out of the Medicare program, yet still receive their Social Security retirement payment. For example, in a 2012 D.C. Circuit case Hall v. Sebelius, 667 F.3d 1293 (D.C. Cir. 2012),[13] which was bankrolled by The Fund For Personal Liberty, “says its purpose is to take on burdensome government regulations,”[14] plaintiffs wanted to “disclaim their legal entitlement to Medicare Part A benefits […] [a]nd would prefer to receive coverage from their private insurers rather than from the Government.” The court held against this argument, stating that “[t]here is no statutory avenue for those who are 65 or older and receiving Social Security benefits to disclaim their legal entitlement to Medicare Part A benefits.”
A 2017 article published by The Federalist argues for the very policy outlined in the EO, and offers “a roadmap for the Trump Administration to remedy the absurd scenario of individuals being forcibly enrolled in a taxpayer-funded program.”[15] The article notes that the plaintiffs in the Hall suit “wanted to keep their previous private coverage, and did not wish to lose the benefits of that coverage by being forcibly enrolled in Medicare Part A.” The article failed to mention, however, that the plaintiffs – former federal employees – wanted to instead use their federally funded health insurance through the Federal Employee Health Benefits (FEHB) Program.[16]
Allowing people to opt out of Medicare would undermine the universality of the Medicare program. Allowing individuals who can self-fund their health care to decline Medicare erodes shared experiences, commitment to, and investments in our nation’s flagship insurance program, and therefore can erode widespread, popular support for the program and make it more susceptible to negative changes. Further, if healthier and wealthier people opt out, as noted by Vox, it “would fundamentally alter the Medicare risk pool.”[17]
Promoting Private Contracting
Current Medicare rules limit the amount that physicians can bill Medicare patients. Doctors do have an option to “opt out” of Medicare and privately contract with all of their patients – an arrangement in which the doctor and patient agree on the fees and Medicare pays nothing. Such arrangements are subject to certain consumer protections, including: written notice that a doctor has opted out of Medicare; a prohibition from entering such contracts when a beneficiary requires urgent or emergent health care; doctors who opt out must do so for all of their Medicare patients and for all services; and doctors must opt out for a minimum of two years in order to minimize disruptions for beneficiaries.[18]
Section 11(b) of the EO directs the Secretary to “identify and remove unnecessary barriers to private contracts that allow Medicare beneficiaries to obtain the care of their choice and facilitate the development of market-driven prices.”
Efforts to allow more private contracting between providers and their patients in the Medicare context are not new. There have been various legislative proposals over the years to do so, as well as policy proposals to expand direct contracting between providers and beneficiaries.[19]
As the Center noted in comments in response to a CMS Direct Provider Contracting Model[20],
We do not support any expansion of existing private contracting that will take the place of such Medicare coverage and protections, or could interfere with or diminish such coverage, or otherwise expose the beneficiary to risk or liability beyond that which they face in the current program.
Creating a framework in which providers negotiate with beneficiaries and enter into an agreement for services would open the door to unfair bargaining advantages, and unequal power dynamics between providers and patients. A system should not be designed for the savviest, best-resourced consumer with the ability to research and process necessary information and negotiate favorable contract terms with provider practices. Many, if not most, beneficiaries will not be in such a position to negotiate contract terms with their provider, or most likely, a skilled provider representative.
While details of the proposal to expand private contracting are unclear, beware of provisions that allow the weakening of consumer protections, balance billing by providers, and other departures from current law or other efforts to assist only those who have the means to pay out of pocket for their desired care.
3. Regulatory Roll-back Harmful to Consumers
While much of the EO’s language is vague, there are references to scaling back requirements that apply to plans and providers. For example, Section 5 proposes to “eliminate burdensome regulatory billing requirements, conditions of participation, supervision requirements, benefit definitions, and all other licensure requirements of the Medicare program that are more stringent than applicable Federal or State laws require and that limit professionals from practicing at the top of their profession.”
This Administration has a track record of rolling back important provider requirements – that often serve as consumer protections – in the name of “reducing regulatory burden,” “cutting red tape” or putting “patients over paperwork.” Recent examples include:
- Revising nursing home requirements of participation;[21]
- Scaling back marketing rules that bind Medicare Advantage and Part D plan sales;[22] and
- Revising home health payment rules impacting access to care.[23]
Instead of weakening consumer protections, the Administration should instead focus on strengthening them and eliminating provider-initiated barriers to care. For example, there could be meaningful efforts to scale back the imposition of prior authorization in Medicare Advantage plans, utilization management for prescription drugs in Part D plans, and the use of proprietary software used as decision-making tools by various providers to determine coverage that include criteria far more restrictive than Medicare guidelines.
Section 8 of the EO references using “Medicare claims data to give health providers additional information regarding practice patterns for services that may pose undue risks to patients, and to inform health providers about practice patterns that are outliers or that are outside recommended standards of care.” While seemingly innocuous on its face, it matters how “outliers” are defined. Unfortunately, in the Center’s experience, often providers who are administering appropriate, medically necessary care are viewed as “outliers” by auditors, particularly in the context of administering maintenance therapy as affirmed by the Jimmo settlement.[24] Heightened yet inappropriate scrutiny of “outliers” in this manner could further chill providers’ incentives to treat people with chronic and long-term conditions who might not improve, but require care to maintain or slow deterioration of their condition.
Similarly, Section 7 of the EO contains language about “site neutrality” which is an expansive concept or term that is open to interpretation. The term has generally been used to describe paying the same rate for the same services, such as physician services in an outpatient hospital setting vs. a stand-alone doctor’s office. This application makes sense, because payment rules have been gamed by hospitals that own physician practices to bill higher rates for exactly the same services.
The concept of site neutral payment is of concern, however, when it would pay the same rates for services at different types of facilities in post-acute care settings. In particular, there are significant differences in health outcomes between inpatient rehabilitation hospitals and skilled nursing facilities (SNFs). SNFs would love to get the same payment rate as inpatient rehab hospitals, but they do not provide care that is as intensive as that provided in a rehab hospital, nor show health outcomes as positive as those of people treated in rehab hospitals.[25]
4. Massive Structural Change?
Finally, there is sweeping, potentially impactful language in the EO about which we can infer little at this time. It is unclear to us, for example, what is contemplated by some of the payment provisions, including Section 3(b), which directs the development of “approaches to modify Medicare FFS payments to more closely reflect the prices paid for services in MA and the commercial insurance market, to encourage more robust price competition, and otherwise to inject market pricing into Medicare FFS reimbursement.”
As noted in a Vox article, the EO “‘is a bit of a ‘Rorschach test,’’ said Kaiser Family Foundation Medicare expert Tricia Neuman, ‘one with many possibly interpretations.’”[26] One interpretation, according to the same article, is that “[t]hese provisions could be particularly consequential. For one, traditional Medicare and Medicare Advantage have roughly comparable payment rates whereas commercial insurance pays at a much higher rate. The most extreme interpretation of this proposal would mean that the cost of Medicare would balloon.”
Does the EO serve as marching orders to turn Medicare into a “premium support” or “voucher” system?[27] Would the Administration need legislation in order to implement what it wants to do? Given the Administration’s support for Medicare Advantage and private insurance coverage, it is very likely that the Administration will try to turn more and more of the Medicare program over to the private market – a prospect about which Medicare beneficiaries should be very concerned.
Conclusion
There is much in the President’s Executive Order that is unclear and must be further defined in order to assess its impact. Most of the provisions that are discernable, however, are not consumer friendly. Instead, they are a gift to both the Medicare Advantage insurance industry and beneficiaries who are wealthy enough to pay for their own health care.
October 10, 2019 – D. Lipschutz
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[1] Available through the White House website at: https://www.whitehouse.gov/presidential-actions/executive-order-protecting-improving-medicare-nations-seniors/ and in the Federal Register at 84 Fed Reg 53573 (Oct. 8, 2019) at: https://www.federalregister.gov/documents/2019/10/08/2019-22073/protecting-and-improving-medicare-for-our-nations-seniors.
[2] Center for Medicare Advocacy, Weekly Alert “Tipping the Scales Toward Medicare Advantage” (March 21, 2018), available at: https://www.medicareadvocacy.org/tipping-the-scales-toward-medicare-advantage/.
[3] Center for Medicare Advocacy, Weekly Alert “Support Traditional Medicare by Leveling the Playing Field with Medicare Advantage” (August 15, 2019), available at: https://www.medicareadvocacy.org/support-traditional-medicare-by-leveling-the-playing-field-with-medicare-advantage/.
[4] Center for Medicare Advocacy, Weekly Alert “Improve and Expand Medicare: CMS Should Provide Objective Information About Medicare Options” (February 7, 2019), available at: https://www.medicareadvocacy.org/improve-and-expand-medicare-cms-should-provide-objective-information-about-medicare-options/.
[5] Excerpted from the Center for Medicare Advocacy’s press release “The President’s Medicare Executive Order Expands Towards Private Medicare Advantage Over Traditional Medicare” (October 3, 2019), available at: https://www.medicareadvocacy.org/the-presidents-medicare-executive-order-expands-towards-private-medicare-advantage-over-traditional-medicare/.
[6] 15642 U.S.C. § 1395w-21(c)(3)(A)(ii); see also 42 C.F.R. § 422.66(d) and MMC Manual, Ch. 2, § 40.1.4, available at https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/Downloads/CY_2019_MA_Enrollment_and_Disenrollment_Guidance.pdf. This process was previously known as seamless conversion enrollment.
[7] See, e.g., the Center Medicare Advocacy’s Weekly Alert “Case Study: Enrolled in a Medicare Advantage Plan Without Her Knowledge Through ‘Seamless Conversion Enrollment’” (June 1, 2016) available at http://www.medicareadvocacy.org/case-study-enrolled-in-a-medicare-advantage-plan-without-her-knowledge-through-seamless-conversion-enrollment/.
[8] See final rule CMS-4182-F at 82 Fed Reg 16440 (April 16, 2018), amending 42 CFR §422.66.
[9] See, e.g., Medicare website at: https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/medicare-medical-savings-account-msa-plans.
[10] Kaiser Family Foundation, “Medicare Advantage 2019 Spotlight: First Look” (October 2018), available at: https://www.kff.org/report-section/medicare-advantage-2019-spotlight-first-look-data-note/.
[11] See, e.g., “HSAs: ‘Tax-Break Trifecta’ Or Insurance Gimmick Benefiting The Wealthy?” by Julie Appleby, Kaiser Health News (Feb 3, 2017), available at: https://khn.org/news/hsas-tax-break-trifecta-or-insurance-gimmick-benefiting-the-wealthy/.
[12] “Trump’s New Order For Medicare Packs Potential Rise In Patients’ Costs” by Julie Appleby, Kaiser Health News (10/7/19): https://khn.org/news/trump-executive-order-medicare-surprise-billing/.
[13] The decision is available here: https://www.leagle.com/decision/infco20120207171.
[14] “Appeals court: Seniors can’t reject Medicare right”, Associated Press, (Feb. 7, 2012), published in Columbus Dispatch, available at: https://www.dispatch.com/content/stories/national_world/2012/02/07/seniors-cant-reject-medicare-right.html.
[15] “The Trump Administration Could Help Solve Our Medicare Problems With This One Easy Fix”, The Federalist (February 2017), available at: https://thefederalist.com/2017/02/08/trump-administration-help-solve-medicare-problems-one-easy-fix/.
[16] See, e.g., Government’s brief responding to plaintiff’s (unsuccessful) request for Supreme Court review, available at: https://www.justice.gov/sites/default/files/osg/briefs/2012/01/01/2012-0262.resp.pdf.
[17]“Trump signed an executive order about how much he hates Medicare-for-all” Tara Golshan, Vox (10/7/19): https://www.vox.com/2019/10/7/20902615/trump-executive-order-medicare-for-all.
[18] See, e.g., Kaiser Family Foundation, “Private Contracts Between Doctors and Medicare Patients: Key Questions and Implications of Proposed Policy Changes” (January 2017), available at: https://www.kff.org/medicare/issue-brief/private-contracts-between-doctors-and-medicare-patients-key-questions-and-implications-of-proposed-policy-changes/.
[19] See, e.g., Kaiser Family Foundation, “Private Contracts Between Doctors and Medicare Patients: Key Questions and Implications of Proposed Policy Changes” (January 2017), available at: https://www.kff.org/medicare/issue-brief/private-contracts-between-doctors-and-medicare-patients-key-questions-and-implications-of-proposed-policy-changes/; “Trump’s New Order For Medicare Packs Potential Rise In Patients’ Costs” by Julie Appleby, Kaiser Health News (10/7/19): https://khn.org/news/trump-executive-order-medicare-surprise-billing/; for examples of policy proposals, see, e.g., Centers for Medicare & Medicaid Services (CMS) Request for Information on Direct Provider Contracting (DPC) Models.
[20] CMA Comments on Request for Information on Direct Provider Contracting Models (May 2018), available at: https://www.medicareadvocacy.org/cma-comments-on-request-for-information-on-direct-provider-contracting-models/.
[21] See, e.g., CMA Weekly Alert, “California Attorney General Calls on CMS to Withdraw Proposed Revisions to Nursing Home Requirements of Participation” (Sept. 26, 2019): https://www.medicareadvocacy.org/california-attorney-general-calls-on-cms-to-withdraw-proposed-revisions-to-nursing-home-requirements-of-participation/; Center Comments on Proposed Rule to Revise Nursing Home Requirements of Participation (Sept. 15, 2019): https://www.medicareadvocacy.org/center-comments-on-proposed-rule-to-revise-nursing-home-requirements-of-participation/; CMA Weekly Alert “Rule Allowing Pre-Dispute Arbitration Agreements in Nursing Homes Takes Effect” (Sept 19, 2019): https://www.medicareadvocacy.org/rule-allowing-pre-dispute-arbitration-agreements-in-nursing-homes-takes-effect/; and Statement by Center for Medicare Advocacy and Long Term Care Community Coalition: Nursing Home Deregulation Continues, Despite Substantial Risk to Residents (September 2019): https://www.medicareadvocacy.org/nursing-home-deregulation-continues-despite-substantial-risk-to-residents/.
[22] See, e.g., Joint Letter from Center for Medicare Advocacy, Justice in Aging, Medicare Rights Center and National Council on Aging (Aug 27, 2019): https://www.medicareadvocacy.org/beneficiary-advocates-raise-alarms-concerning-roll-out-of-new-medicare-plan-finder-and-revision-of-medicare-marketing-rules/; and CMA Weekly Alert “Advocates Issue Joint Letter Raising Alarms about New Medicare Plan Finder and Revisions to MA and Part D Marketing Guidelines” (Aug 29, 2019) https://www.medicareadvocacy.org/advocates-issue-joint-letter-raising-alarms-about-new-medicare-plan-finder-and-revisions-to-ma-and-part-d-marketing-guidelines/.
[23] See, e.g, CMA Weekly Alert, “CMS Proposed Medicare Home Health Rules Raise Concerns for Access to Care – Comments due September 9, 2019” (Aug 29, 2019): https://www.medicareadvocacy.org/cms-proposed-medicare-home-health-rules-raise-concerns-for-access-to-care-comments-due-september-9-2019/.
[24] See, e.g., CMA Weekly Alert, “CMS Could Truly Put “Patients over Paperwork” By Fully Implementing the Jimmo Settlement” (Aug. 22, 2019), available at: https://www.medicareadvocacy.org/cms-could-truly-put-patients-over-paperwork-by-fully-implementing-the-jimmo-settlement/.
[25] See, e.g., CMA Weekly Alert, “No Site Neutral Payments for Inpatient Rehabilitation Facilities and Skilled Nursing Facilities” (Dec. 11, 2014), available at: http://www.medicareadvocacy.org/no-site-neutral-payments-for-inpatient-rehabilitation-facilities-and-skilled-nursing-facilities/ (citing studies showing better outcomes for patients in IRHs, cost-shifting to Medicaid).
[26] “Trump signed an executive order about how much he hates Medicare-for-all” Tara Golshan, Vox (10/7/19): https://www.vox.com/2019/10/7/20902615/trump-executive-order-medicare-for-all.
[27] For a discussion of premium support proposals, see, e.g., Kaiser Family Foundation, “Turning Medicare Into a Premium Support System: Frequently Asked Questions” (Jul. 2016), available at: https://www.kff.org/medicare/issue-brief/turning-medicare-into-a-premium-support-system-frequently-asked-questions/.