CMA Alert | September 23, 2021

New Research Raises Questions About Medicare Advantage Payments

A recent study found that double bonuses for Medicare Advantage (MA) plans are not an efficient mechanism to improve the program, and are not equitable in allocation of those dollars, disproportionally benefiting White beneficiaries relative to Black beneficiaries, without improving quality or enrollment. The report “Medicare Advantage Plan Double Bonuses Drive Racial Disparity In Payments, Yield No Quality Or Enrollment Improvements,” was published in September 2021 Health Affairs.

The Health Affairs study describes double bonuses in the MA program: “An unusual feature of the MA bonus program is the delineation of ‘double-bonus’ counties. In these counties, higher-quality plans receive certain MA bonuses at double the dollar level paid to comparably performing plans in counties that are ineligible for double bonuses. Through the ACA, Congress created three criteria that a county must meet to be eligible for double bonuses: historically high MA enrollment (at least 25 percent in 2009); low Medicare fee-for-service spending (below the national average in a given year); and a 2004 ‘urban floor’ designation, given to Metropolitan Statistical Areas (MSAs) with at least 250,000 residents that qualify for the minimum MA benchmark rate and granted to areas with low fee-for-service spending. Although the proportion of counties qualifying for double-bonus status is small, at around 7 percent of counties nationally, the impact of their double bonus status is large because 27 percent of MA beneficiaries live in them, based on our analysis of Medicare data.”

The study found that Black beneficiaries were substantially less likely to reside in counties offered double bonuses than White beneficiaries, contributing to racial disparities in the allocation of double bonus dollars, disfavoring Black beneficiaries.  The study notes that because CMS expects some of the quality bonus payments to be passed on to beneficiaries through assistance with Medicare premiums or additional benefits, differences in the allocation of MA bonus payments to counties that are eligible and not eligible for double bonuses could result in racial and geographic disparities. These could include difference in availability of enhanced benefits, or “translate to higher premiums for the same benefits when offered to primarily Black versus primarily White populations, which could harm the financial well-being of Black beneficiaries.”

Another report released this week also raises questions about MA payments. HHS OIG’s report, “Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments,” reviews risk-adjusted payments to Medicare Advantage companies. The report was undertaken “because of concerns that MA companies may leverage both chart reviews and HRAs to maximize risk adjusted payments, without beneficiaries receiving care for those diagnoses.”

The OIG report’s recommendations:

“CMS should (1) provide oversight of the 20 MA companies that had a disproportionate share of the risk-adjusted payments from chart reviews and HRAs; (2) take additional actions to determine the appropriateness of payments and care for the 1 MA company that substantially drove risk adjusted payments from chart reviews and HRAs; and (3) perform periodic monitoring to identify MA companies that had a disproportionate share of risk adjusted payments from chart reviews and HRAs. To assist CMS with its efforts, we will provide information on which companies had a substantially disproportionate share of risk adjusted payments from diagnoses that were reported only on chart reviews and/or HRAs. CMS neither concurred nor nonconcurred with our three recommendations and stated that it will take our recommendations under consideration as part of its ongoing process to determine policy options for future years.”

New Survey | More Older Adults in the US, Especially People of Color, Suffered Economic Hardship Due to COVID-19

Since the pandemic began, it has been well documented that the risk for severe illness, hospitalization, and death related to COVID-19 is highest for older adults.[1] For people in their 50s, for example, the chances of dying from the disease is 30 times higher than it is for those 18-29 years old. That risk jumps to 90 times higher for those 65-74 years old.[2] Now a new international survey published by The Commonwealth Fund shows that COVID-19 hit U.S. older adults hard in the pocketbook, as well, especially the Latino/Hispanic and Black populations.

The 2021 International Health Policy Survey of Older Adults assessed and compared responses from over 18,000 older adults in 11 high-income countries (e.g., Canada, Germany, the United Kingdom, the United States) to discern how COVID-19 impacted older adults in terms of economic security, access to health care, and supportive services for chronic conditions. The survey concluded that older adults in the United States suffered economically the most from the COVID-19 pandemic, compared to the other countries surveyed. At a rate four to six times higher than that of Germany, Switzerland, Sweden, and others, older adults in the U.S. reported that they used up all or most of their savings or that they lost a job or source of income because of the pandemic. [3] 

Furthermore, U.S. Latino/Hispanic and Black older adults were far more likely than white older adults to report economic hardships. While 14 percent of white American survey respondents reported experiencing economic hardships related to the pandemic, that figure shot up to 32 percent for older adults who were Black and further increased for Latino/Hispanic older adult respondents.

The United States, additionally, had the largest percentage of older adults who were not planning to get vaccinated. Reasons cited included lack of trust in the government and concerns about side effects. The CDC reports that, as of September 21^st, almost 83% of adults 65 and older are currently fully vaccinated.[4] For comparison purposes, 97% of older adults were vaccinated in the UK as of May 2021.

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[1] CDC. Covid-19 Recommendations for Older Adults. Centers for Disease Control and Prevention. (Aug. 4, 2021). Available at: https://www.cdc.gov/aging/covid19-guidance.html 
[2] CDC. Covid-19 Recommendations for Older Adults. Centers for Disease Control and Prevention. (Aug. 4, 2021). Available at: https://www.cdc.gov/aging/covid19-guidance.html 
[3] The Commonwealth Fund. The Impact of COVID-19 on Older Adults: Findings from the 2021 International Policy Survey of Older Adults. (Sept. 15, 2021).  Available at: https://www.commonwealthfund.org/publications/surveys/2021/sep/impact-covid-19-older-adults 
[4] CDC. (2021, September 21). CDC COVID Data Tracker.  (Updated Sept. 21, 2021). Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations_vacc-total-admin-rate-total

CMS Now Reports Resident and Staff COVID-19 Vaccination Rates on Care Compare

In welcome news, the Centers for Medicare & Medicaid Services (CMS) has begun reporting COVID-19 vaccination rates for nursing home residents and staff on the federal website Care Compare. Resident and staff vaccination rates now prominently appear on each facility’s homepage on Care Compare, along with comparative information about state and federal vaccination rates for residents and staff. Before the September 21 announcement, CMS reported vaccination rates only on its COVID-19 Nursing Home Data webpage, which is difficult for residents and families to use. Advocates for residents had asked CMS to make vaccination information more readily available to consumers and thank the Administration for this helpful and important change.

See CMS, “CMS Launches New Medicare.gov Tool to Compare Nursing Home Vaccination Rates” (News Release, Sep. 21, 2021), https://www.cms.gov/newsroom/press-releases/cms-launches-new-medicaregov-tool-compare-nursing-home-vaccination-rates.

Government Releases $25.2 Billion in Provider Covid-19 Relief

On September 9, 2021, the Department of Health and Human Services (HHS) announced that it is releasing $25.5 billion in COVID-19 funding to health care providers – $8.5 billion from the American Rescue Plan for providers serving rural patients, and $17 billion from the Provider Relief Fund (PRF) “for a broad range of providers who can document revenue loss and expenses associated with the pandemic.”[1] Consistent with the Coronavirus Response and Relief Supplemental Appropriation Act of 2020, the $17 billion PRF Phase 4 payments will be based on providers’ lost revenues and expenditures between July 1, 2020 and March 31, 2021. 

HHS describes the Biden-Harris Administration’s commitment to equity and supporting providers in most need.  Accordingly, HHS intends that PRF Phase 4 funding will go to smaller providers “at a higher rate compared to larger providers.”  It also intends to “price these bonus payments at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors.”  HHS’s Press release explains, “To help ensure that these provider relief funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments.”  Detailed information explains the methodology for calculating PRF Phase 3 payments.[2]

Acting Administrator Diana Espinosa of the Health Resources & Services Administration (HRSA), which administers the COVID funds, provided additional details at a September 15 briefing.  The PRF Phase 4 distribution will be similar to the Phase 3 distribution.  Administrator Espinosa said that 75% of the $17 billion will be distributed to providers to reflect lost revenues and expenses, with higher supplemental payments going to smaller providers, and that 25% of the $17 billion will be distributed to providers serving patients receiving Medicare, Medicaid, or Child Health Insurance Payments.  She described a reconsideration process for providers.

The Center for Medicare Advocacy fully supports the Administration’s commitment to equity and supporting providers in need.  However, we have questions and concerns about the distribution of the PRF for nursing facilities.

First, how will HRSA define small, medium, and large facilities?  Will each facility be evaluated on its own, individually, or will HRSA consider corporate ownership of multiple facilities to determine facility size?

Second, how will HRSA’s methodology for identifying lost revenues ensure that calculations of PRF payments are based on accurate information?[3] As The New York Times reported in January 2018, nearly three-quarters of all nursing facilities in the country buy goods and services, such as therapy services, management services, medications, and rent, often at inflated prices, from companies that they own and control and that as a result of these related party transactions, facilities are able to hide profits as the cost of doing business.[4]  Jordan Rau described two New York owners whose family trusts took $40 million of the $145 million that their facilities received as reimbursement over an eight-year period – a 28% profit margin.  Rau reported Kaiser Health News’s analysis that facilities engaging in these practices have fewer nurses and aides to provide care to residents, “higher rates of patient injuries and unsafe practices,” and twice as many complaints as other facilities. 

Several months later, The Naples Daily News similarly reported that Consulate Health Care, the largest nursing home operator in Florida and sixth largest operator in the country (then, with 210 facilities and 22,059 beds in 21 states), founded in 2006 and owned by the Atlanta-based private equity firm Formation Capital, designed its facilities “to appear cash-strapped.”[5]  The article described the chain’s individual facilities as “essentially empty shells, they pay rent, management and rehabilitation service fees to Consulate or Formation Capital-affiliated companies.”  One Consulate facility paid $467,022 in management fees and $294,564 in rent to two companies owned by Consulate and Formation Capital.

While self-dealing contracts are not illegal under current law,[6] HHS must take steps to ensure that losses identified by nursing facilities are real and not paper losses claimed by owners and corporations hiding their profit-taking.

Third, will facilities be ineligible for PRF if they have serious deficiencies related to infection control and prevention or other resident care areas?  In September 2020, CMS announced that $2 billion of PRF would be distributed as “performance-based incentives” to nursing facilities meeting two criteria: (1) a COVID-19 infection rate below the rate of infections in the county in which the facility is located and (2) a COVID-19 death rate below a nationally-established performance threshold for mortality among nursing home residents infected with COVID-19.[7]  In some instances, these “performance-based” payments exceeded the civil money penalties that CMS had imposed against the same facilities for infection control deficiencies.  The Colorado Sun reported that 132 Colorado nursing facilities were both fined for poor infection control practices and received performance-based incentive payments.  One hundred seventeen of the 132 facilities, which also experienced a COVID outbreak, received more than $10.3 million more than they were fined in federal COVID-19 relief money.[8]

There should be no question that federal funds should be directed to the care of residents, not to facility and corporate profits.

Providers may begin submitting applications for the funding on September 29, 2021.

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[1]  HHS, “HHS Announces the Availability of $25.5 Billion in COVID-19 Provider Funding” (Press Release, Sep. 10, 2021),  https://www.hhs.gov/about/news/2021/09/10/hhs-announces-the-availability-of-25-point-5-billion-in-covid-19-provider-funding.html 
[2] Provider Relief Fund Phase 3: Payment Calculation Methodology, https://www.hrsa.gov/sites/default/files/hrsa/provider-relief/phase-3-methodology-overview.pdf 
[3] The Center expressed concern before with the distribution of “performance-based” Provider Relief Funds to facilities that were fined for infection control deficiencies.  “Nursing Homes Fined for Infection Control Should Not Receive COVID-19 ‘Performance Based’ Relief Funds” (May 27, 2021),  https://medicareadvocacy.org/no-extra-funds-for-poor-performers/ 
[4] Jordan Rau, “Care Suffers as More Nursing Homes Feed Money Into Corporate Webs,” The New York Times (Jan. 2, 2018), https://www.nytimes.com/2018/01/02/business/nursing-homes-care  
[5] Ryan Mills and Melanie Payne, “Neglected: Florida’s largest nursing home owner represents trend toward corporate control,” Naples Daily News (May 31, 2018), https://www.naplesnews.com/story/news/special-reports/2018/05/31/floridas-largest-nursing-home-owner-part-growing-national-trend/581511002/    
[6] California State Auditor, Skilled Nursing Facilities: Absent Effective Oversight, Substandard Quality of Care Has Continued, Report 2017-19 (May 2018), https://www.auditor.ca.gov/pdfs/reports/2017-109.pdf 
[7] CMS, “Nursing Home Quality Incentive Program Methodology” (Dec. 7, 2020), https://www.hhs.gov/sites/default/files/nursing-home-qip-methodology.pdf 
[8] Zack Newman and Kevin Vaughn, “117 Colorado nursing homes with COVID outbreaks received both fines and financial assistance from the federal government,” The Colorado Sun (May 9, 2021), https://coloradosun.com/2021/05/09/colorado-nursing-home-fines-coronavirus/  See “Nursing Homes Fined for Infection Control Should Not Receive COVID-19 ‘Performance Based’ Relief Funds” (CMA Alert, May 27, 2021), https://medicareadvocacy.org/no-extra-funds-for-poor-performers/

Elder Justice Vol. 3 Issue 9 Now Available

In the Elder Justice Newsletter, we highlight citations, including deficiencies related to abuse, neglect, and substandard care, that have been identified as not causing any resident harm. The goal of this brief newsletter is to shed light on the issue of so-called “no harm” deficiencies, which typically result in no fine or penalty to the nursing home.

This newsletter focuses on the following “no harm” violations:

• Fire prevention: Facility fails to develop a person-centered care plan for a resident with a known smoking history.
• Bit off part of his tongue: Facility fails to keep resident safe after significant medication errors.
• Neglected wounds: Facility fails to keep five residents free from pressure ulcers.
• Smeared feces: Facility fails to provide a safe, clean, comfortable, homelike environment.
• Confined alone in the shower: Facility uses involuntary seclusion on resident.
• Failure to report: Facility fails to prevent and promptly report resident-to-resident abuse.

Do YOU think these deficiencies caused “no harm”? Click to download the newsletter.

Reminder | Tell Congress Now is the Time to Improve Medicare

Now is the time to make your voices heard – as the Center and colleague organizations work to highlight other priorities for improving Medicare, and push for the proposals currently under consideration to be more robust. This moment presents a truly rare opportunity to legislate a meaningful expansion of Medicare benefits. It is a crucial time for people to contact and urge their federal lawmakers to make important improvements to the program for all current and future generations of Medicare beneficiaries. If Congress misses this chance, it could be a very long time before we will see another opportunity.

Send a message to your members of Congress asking them to improve the traditional Medicare program by controlling private Medicare Advantage and prescription drug costs; adding an out-of-pocket cap; adding dental, hearing and vision services; improve affordability, including strengthening low-income protections, and expanding rights to purchase Medigap policies:

Send Your Message Now at:
https://secure.everyaction.com/0Yho6AcLSkSqYlPesPMO4g2.

Send a message asking members of Congress to support adding a comprehensive dental benefit to Medicare:

Send Your Message Now at:
https://secure.everyaction.com/pa3W02ObtUqwRFH6-stqoQ2.

If you prefer to call or write a letter to your elected representatives, you can obtain the contact information for your U.S. Senators on the “Find Your Senators” pull-down menu on the following site: https://www.senate.gov/. You can obtain the contact information for your U.S. Representative by typing in your zip code at the following webpage: https://www.house.gov/representatives/find-your-representative.

Now is the time to act!

Free Webinar, October 20 (2-3 pm) | Medicare Enrollment Issues for 2022

This webinar will discuss the 2022 Annual Coordinated Election Period (ACEP), including outreach and education materials issued by the Medicare program, Medicare Plan Finder updates, common enrollment pitfalls, options when you miss your Initial Enrollment Period, and other considerations for Medicare beneficiaries and those who assist them. Policy changes, potential helpful legislation, and other updates for 2022 will also be discussed, including Medicare Advantage network adequacy and other changes made by final regulations.

• ​​​​Register now at https://attendee.gotowebinar.com/register/5896392103778054926