CMA Alert – February 7, 2019

1. Improve and Expand Medicare: Create Parity Between Medicare Advantage and Traditional Medicare
2. 2019 Federal Poverty Levels Released: New Income Limits for Medicare Savings Programs
3. State of the Union: Want More Affordable Prescription Drugs? Start with Medicare. 
4. Home Health Outreach Materials Available

Improve and Expand Medicare: Create Parity Between Medicare Advantage and Traditional Medicare

Recently, the Center for Medicare Advocacy laid out our Medicare Platform for the New Congress. One of the core considerations to improve Medicare for all beneficiaries, now and in the future, is the need to preserve and expand consumer protections and quality coverage for all Medicare Beneficiaries – including parity between traditional Medicare and private Medicare Advantage plans. We previously wrote about limited access to Medigap policies, oral health care, lack of an out-of-pocket cap on beneficiary expenses in traditional Medicare, and the need for comprehensive long-term services and supports (LTSS, also known as long term care).  These parity concerns are increasingly important since recent changes in law and policy have expanded the scope of both medical and non-medical services that Medicare Advantage (MA) plans can cover.

Another ongoing imbalance between traditional Medicare and Medicare Advantage relates to payment. While the Affordable Care Act reined in significant overpayments to MA plans and brought average payment more in line with what traditional Medicare spends on a given beneficiary, payment inequity lingers, some of which, as described below, is arguably inappropriate. Such extra funds, if redirected toward the Medicare program as a whole, could be used to strengthen and expand the traditional Medicare program, including with respect to the gaps in coverage and access to services outlined above.

As noted in a previous Alert summarizing a New England Journal of Medicine article entitled “Medicare Advantage Checkup” (November 2018), after many years of Medicare payments to MA plans being “considerably higher,” payment to MA plans today are “roughly equal to the per capita costs in traditional Medicare (101% of those costs, on average)” but “some questions remain as to whether the current system is putting sufficient downward pressure on program spending and encouraging plan efficiency” (including incentives that promote, e.g., plan choice and extra benefits at the expense of Medicare savings). The article notes: “[c]urrent methods that are used to compare [MA] payments with traditional Medicare costs may overstate the true costs to plans or provider Medicare benefits” for example, the current risk-adjustment system may allow MA plans to “boost[..] their payments by as much as 2% (on average) in 2018, on the basis of how they code their enrollees’ health conditions.”

Some analysts have tried to quantify how much MA plans are being overpaid based upon how they code their enrollees’ health status. A 2017 study published in Health Affairs found that coding intensity practices could result in overpayments to MA plans totaling $200 billion over the next decade.  Similarly, in April 2016, the General Accounting Office (GAO) issued a report stating that CMS estimates that about 9.5% of its annual payments to Medicare Advantage (MA) organizations were improper – totaling $14.1 billion in 2013 alone – “primarily stemming from unsupported diagnoses submitted by MA organizations.”

A February 4, 2019 article in The New Yorker entitled “The Personal Toll of Whistle-Blowing” notes that, due to coding practices, Medicare Advantage “is at the center of a growing number of fraud cases, some of which involve the biggest names in the health care industry. The regulations around the issue are complicated, however, and legal questions about what constitutes prosecutable fraud are still the subject of debate.” According to the article, Harvard Professor Malcolm Sparrow notes that “unchecked fraud could lead to the wholesale destruction of government health-care programs. Systemic theft creates cost inflation […] which increases political pressure to make cuts, often affecting both the healthy and unhealthy parts of a program.”

Despite coding practices that can inflate payment to MA plans, many policymakers continue to promote the MA program without regard to growing inequity between MA and traditional Medicare. For example, every year, CMS issues a draft Call Letter which includes proposed policy changes and payment rates for Part C Medicare Advantage and Part D plans for the following calendar year. Every year, the insurance industry gathers support in Congress to ensure that MA plans receive steady payment. As noted by Politico, in the draft 2020 Call Letter “CMS proposed to hike rates a modest 1.59 percent for 2020, but some analysts think a two-month lobbying effort from insurers could nudge that figure higher.” (“Private Medicare plans face few threats from 2020 proposal” By Paul Demko, 2/06/19.)

In response to the draft Call Letter, the insurance industry is touting letters to CMS signed by 66 Senators and 302 members of the House of Representatives urging support of the MA program.  The Senate letter concludes:

“For plan year 2020, we encourage the Administration to implement policies that promote innovation, provide predictable funding to support long-term, value-based arrangements, and ensure that any substantive changes include sufficient time for thorough evaluation and stakeholder engagement.”

Instead of continuing to favor Medicare Advantage regardless of cost, we urge policymakers to advance complete equity between MA and traditional Medicare, including both the scope of services provided and programmatic spending. Wasteful spending on MA should be reinvested into the Medicare program to the benefit of all enrollees, not just those who choose to enroll in private plans.

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2019 Federal Poverty Levels Released: New Income Limits for Medicare Savings Programs

Medicare Savings Programs (MSP) offer assistance with meeting the costs of Medicare premiums and deductibles. The MSPs include the Qualified Medicare Beneficiary program (QMB), Specified Low-Income Medicare Beneficiary program (SLMB), and Qualified Individual program (QI).  All of these help Medicare beneficiaries of modest means pay all or some of Medicare’s cost sharing amounts (ie. premiums, deductibles and copayments). To qualify an individual must be eligible for Medicare and must meet certain income guidelines which change annually.  Please note that the eligibility criteria listed below are federal standards; states may have more, but not less, generous standards.

QMB (Qualified Medicare Beneficiary Program)

Coverage

• Payment of Medicare Part A monthly premiums (when applicable).
• Payment of Medicare Part B monthly premiums and annual deductible.
• Payment of co-insurance and deductible amounts for services covered under both Medicare Parts A and B.

Requirements and Monthly Income Limits for 2019 (up to 100% FPL+ $20)*

• Must be eligible for Medicare Part A (even if not currently enrolled).
• Income at or below $1,061 for an individual and $1,430 for a couple in 2019.*
• Resources below $7,730 for an individual and $11,600 for a couple in 2019.*
• Must undergo redetermination for the benefit every year.

SLMB (Specified Low-Income Medicare Beneficiary Program)

Coverage

• Payment of the Medicare Part B monthly premium only.

Requirements and Monthly Income Limits for 2019 (less than 120% FPL+ $20)*

• Must be eligible for Medicare Part A (even if not currently enrolled).
• Income between $1,269 for an individual and $1,711 for a couple in 2019.*
• Resources below $7,730 for an individual and $11,600 for a couple in 2019.*
• Must undergo redetermination for the benefit every year.

QI (Qualified Individual Program – also known as ALMB)

Coverage

• Payment – through the SLMB program – of Medicare Part B premium for the calendar year. (NOTE: the funds for this program come from a “block-grant,” so are finite. Once they are gone, even eligible individuals will not be able to access the program, so apply early.)

Requirements and Monthly Income Limits for 2019 (less than 135% FPL+ $20)*

• Income between $1,426 for an individual and $1,923 for a couple in 2019.*
• Resources below $$7,730 for an individual and $$11,600 for a couple in 2019.*
• Must re-apply every year for these benefits;
• Not available to those who qualify for any other kind of Medicaid

* $20 = monthly SSI general income exclusion. Individual states may be more generous with the income and resource amounts above.

Obtaining QMB, SLMB, and QI Benefits

Requests for applications for QMB, SLMB, or QI benefits are made to the state Medicaid agency. Eligibility for QMB is effective on the first day of the month following the month in which the Medicaid agency has all the information and verification necessary to determine eligibility. SLMB and QI entitlement may be retroactive. For more information, please telephone your local Medicaid office. You can find your local Medicaid office at https://www.medicaid.gov/about-us/contact-us/index.html.