The Center for Medicare Advocacy has long-highlighted concerns relating to Medicare Advantage (MA) overpayments, as well as access to care issues, including MA plans’ widespread and inappropriate use of prior authorization and on-going denials. These issues have received more attention in recent months as the Centers for Medicare & Medicaid Services (CMS) issued both proposed MA payment rates for 2024 and proposed rules that would address MA prior authorization, marketing misconduct and other issues. CMS has recently issued final versions of these anticipated policies.
MA Payment for 2024
As discussed in a recent series of CMA Alerts, CMS had proposed to update and revise various MA payment formula, seeking more accurate payments to plans, which, despite misleading insurance industry claims, would have resulted in a payment increase of 1.03%. Following a well-funded and high pressure campaign by the insurance industry, , CMS issued their CY 2024 Medicare Advantage and Part D Rate Announcement on March 31, 2023, available here, and a corresponding Fact Sheet available here. The final Rate Announcement, while retaining many of the policy changes concerning more accurate payment, phases such changes in over 3 years (rather than at once as proposed) and includes a 3.32% payment increase – more than initially proposed.
As noted in a New York Times article titled “Medicare Delays a Full Crackdown on Private Health Plans” by Reed Abelson and Margot Sanger-Katz (March 31, 2023), while “[r]egulators are still moving forward with rules that will lower payments to insurers by billions of dollars a year […] they will phase in the changes over three years, rather than all at once, and that will lessen the immediate effects.” The journalists note that following announcement of the proposed rates, “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.” While 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”, Abelson and Sanger-Katz highlight that “[i]n the short term, private health plans will still be able to receive payments that Medicare officials do not consider appropriate.”
In a press release issued by Arnold Ventures titled “Statement from Arnold Ventures’ Mark E. Miller on Biden Administration’s Decision to Slow Implementation of Medicare Advantage Reforms” (March 31, 2023), Miller notes “[we] are disappointed to hear that reasonable changes targeting abuse and waste in Medicare Advantage will be phased in over three years rather than fully implemented immediately. The coding abuses by insurers in Medicare Advantage have led the independent Medicare commission (MedPAC), which was created to advise Congress, to call for a ‘major overhaul’ of Medicare Advantage policies. While the finalized changes are an improvement, the phased-in approach will continue to reward those insurers with the most abusive practices over the next two years.”
While we applaud CMS for seeking more accurate payments to Medicare Advantage, the Center for Medicare Advocacy shares Arnold Ventures’ disappointment that CMS did not adhere to their initial, modest proposal. The delayed and limited scope of CMS’ efforts to rein in MA overpayments underscores the need for drastically more bold action by both Congress and the Administration.
Final Part C & D Rule
In addition to payment rules, in most years, CMS issued proposed policy changes for the Medicare Advantage (Part C) and Part D prescription drug program for the following calendar year. As noted in a December 2022 CMA Alert, that month CMS issued a wide-ranging proposed Part C & D rule for 2024 that included significant improvements to consumer protections including provisions to rein in MA plans’ use of prior authorization and additional limits on marketing misconduct. As discussed in this CMA Alert (Feb. 16, 2023), the Center submitted extensive comments to this proposed rule.
On April 5, 2023, CMS released the final rule, as discussed in this CMS Fact Sheet titled “2024 Medicare Advantage and Part D Final Rule (CMS-4201-F).” The final rule will be published in the Federal Register on Wednesday, April 12, 2023, but is currently available for public view here.
The Center for Medicare Advocacy is reviewing this rule and will provide more detailed analysis soon.
April 6, 2023 – D. Lipschutz