As documented in a recent series of CMA Alerts, the Centers for Medicare & Medicaid Services (CMS) has proposed long overdue steps to address Medicare Advantage (MA) overpayments and oversight, including restrictive prior authorization and marketing misconduct. By April 3, CMS is expected to finalize their proposed MA payment rate for 2024 which, despite industry claims, is actually a pay raise. Around the same time, CMS is also expected to finalize a Part C&D rule that, among other provisions, addresses MA prior authorization and marketing misconduct. Despite these needed but cautious changes, the insurance industry continues to fight against efforts to increase oversight and rein in their overpayments. However, seemingly unquestioned support for MA by the public, providers and policymakers is waning.
New York Times Highlights Current Industry Fight Against Payment Reform and Oversight
A New York Times article titled “Medicare Tries to Combat Fraud. Now Insurers Are Fighting Back.” by Reed Abelson and Margot Sanger-Katz (March 22, 2023) describes the insurance industry “lobbying frenzy” set off by CMS’ MA payment proposal. The article highlights a “multimillion dollar ad buy [which] is part of an aggressive campaign by the health insurance industry and its allies to stop the Biden [payment] proposal.”
Noting how lucrative MA has become for insurers, the article notes that “[i]nsurers used television commercials and other strategies to urge Medicare Advantage customers to contact their lawmakers. The effort generated about 142,000 calls or letters to protest the changes, according to the Better Medicare Alliance, one of the lobbying groups involved and the one behind the bowling commercial.”
However, in a significant shift in tone on Capitol Hill, Abelson and Sanger-Katz note that “[t]o the surprise of many in the industry, leaders in Congress have not stepped forward to vigorously defend the private plans.”
The article states that increased scrutiny of MA plans seems to have shifted dynamics on the Hill: “the widely publicized lawsuits, audits and reviews have influenced the views of past supporters in Congress. Last year, nearly 80 percent of the members of the House of Representatives signed a letter to Medicare urging its officials to ‘provide a stable rate and policy environment for Medicare Advantage.’” The article goes on to note that:
But this year, support among lawmakers appears to have weakened, despite the avalanche of constituent calls. So many legislators would have fallen off the House letter that the insurance industry has declined to circulate one, several congressional aides said. That shift came in part from increasing awareness of overbilling, but also because of concerns about deceptive marketing and denials of care, they said.
In marked contrast to years past, Reed and Abelson highlight a letter led by Representative Jayapal – signed by 70 House members – calling for MA reforms, including reining in MA overpayments (discussed in this CMA Alert, Feb. 16, 2023).
In related news, John Wilkerson of STAT reports in his March 23, 2023 article Key senators blast Medicare Advantage insurers for ‘exorbitant salaries,’ ‘massive payouts’ to execs that Sens. Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) “slammed seven different Medicare Advantage insurers for lobbying against proposed rate cuts to the program while their executives still collected “exorbitant salaries” and gave “massive payouts” to their shareholders.”
The Senators go on to flip the traditional Medicare Advantage script of so called “cuts” to ask these seven companies whether
“Given these outsized profits and the long history of corporate profiteering in the MA program, we are requesting information from your company about whether [you] would take actions that hurt seniors, as industry groups are claiming, instead of reducing exorbitant salaries or the massive payouts to your shareholders and executives.”
MedPAC: “A Major Overhaul of MA Policies is Urgently Needed”
The Medicare Payment Advisory Commission (MedPAC), the independent Congressional agency that advises on issues affecting the Medicare program, has for years raised issues that need to be addressed in the Medicare Advantage program. MedPAC’s most recent, March 2023 Report to the Congress: Medicare Payment Policy is no different.
In their Executive Summary to the March 2023 Report, MedPAC notes:
The Commission remains concerned that the benefits from MA’s lower cost relative to FFS spending are shared exclusively by the companies sponsoring MA plans (in the form of increased enrollment and revenues) and MA enrollees (in extra benefits). The taxpayers and FFS Medicare beneficiaries who help fund the MA program through Part B premiums do not realize any savings from MA plan efficiencies. Further, Part B premiums are higher for all beneficiaries than they otherwise would be, and Medicare spends 6 percent more for MA enrollees than it would spend if those beneficiaries were enrolled in FFS Medicare, a difference that translates into a projected $27 billion in 2023. This amount would be even larger if the favorable selection of beneficiaries in MA plans were taken into account because beneficiaries who choose to enroll in an MA plan tend to be more profitable than beneficiaries who remain in FFS Medicare.
MedPAC states that “a major overhaul of MA policies is urgently needed” including with respect to how “the disparity between MA and [traditional Medicare] payment disadvantages beneficiaries who—due to medical reasons or personal preferences—do not want to enroll in MA plans that use tools like narrow networks or utilization management policies.” MedPAC has made a number of unimplemented recommendations to Congress and CMS.
Noting that “[i]t is likely that a majority of eligible Medicare beneficiaries will be enrolled in MA in 2023”, the Commission notes that in 2023, payments to MA plans average an estimated 106 percent of projected traditional Medicare spending. With respect to quality in MA, MedPAC continues to note that “[t]he current state of quality reporting in MA is such that the Commission can no longer provide an accurate description of MA quality of care.” The Commission concludes “[f]indings are sufficiently mixed on patient experience and outcomes that the Commission cannot conclude that MA plans systematically provide better (or worse) quality compared with traditional [traditional] Medicare.”
Barriers to Care: MA Prior Authorization and On-Going Care Denials
Medicare Advantage plans’ use of prior authorization has been a long-standing barrier to care for plan enrollees. In the Center’s experience, in recent years, MA plans have imposed ever greater barriers to care for their enrollees, in part due to the growing use of algorithmic or artificial intelligence- (AI) driven coverage determination software and tools in order to determine coverage for care in certain settings. As we highlighted in a recent CMA Alert (March 16, 2023), STAT News issued a report titled “Denied by AI: How Medicare Advantage plans use algorithms to cut off care for seniors in need,” by Casey Ross and Bob Herman (March 13, 2023). The report explores how “artificial intelligence is now driving [health insurance company] denials to new heights in Medicare Advantage.”
Citing the STAT report, Be a Hero, co-led by advocate Ady Barkan, is circulating an action alert titled “Tell President Biden: Stop #DeathByAI.” The alert, which calls on President Biden and CMS to stop this practice immediately and hold MA plans accountable, notes:
In Medicare Advantage, for-profit insurance companies use hefty taxpayer subsidies to offer enrollees cheaper Medicare premiums, but then often fail to provide patients with adequate care when they need it and limit patients to small provider networks. Recent investigations have found that the largest insurers in Medicare Advantage have committed widespread fraud and denied patients critical care they were supposed to provide by law.
It is not just Medicare beneficiaries and their advocates who are hindered by MA prior authorization, including AI and other algorithm-driven tools and rules of thumb. As we noted in a CMA Alert (May 5, 2022) after the release of last year’s Office of Inspector General (OIG) report titled “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care”, providers have seemingly become more vocal in airing their frustrations with MA plans’ denial practices.
Recently, as noted in an Inside Health Policy article titled “LeadingAge Slams MA Plans For Impeding Post-Acute Care, Urges CMS Action” by Bridget Early (March 17, 2023), a report released by LeadingAge, the association of non-profit providers of aging services, “slammed Medicare Advantage plans for what it called ‘the critical and growing failures of Medicare Advantage (MA) to provide equitable access to needed post-acute services” and recommended steps CMS and Congress could take to rectify issues with reimbursement and contracting.’” LeadingAge’s CEO is quoted in their press release as stating:
Whether it’s delayed claims processing and opaque explanations for prior authorizations or slow care approvals, MA plan practices and policies impact the entire health care system […] Failure to address these and a host of other issues now will jeopardize the health and well-being of millions of older adults as the MA juggernaut expands. The time is right to take action.
Arnold Ventures Survey: Americans Overwhelmingly Believe Congress and the Biden Administration Should Crack Down on Medicare Advantage Insurers for Abusive Billing Practices
In an effort to ward off even minor reforms aimed at reining in overpayments, the insurance industry has tried to highlight how popular MA plans are with enrollees. A recent survey by Arnold Ventures, however, shows that addressing MA overpayments has widespread support.
On March 20, 2023, Arnold Ventures issued a press release titled “New Survey Shows Americans Overwhelmingly Believe Congress and the Biden Administration Should Crack Down on Medicare Advantage Insurers for Abusive Billing Practices”. A national survey of registered voters conducted in mid-March found that “voters overwhelmingly support [… CMS’] proposed reforms that would better protect taxpayers and seniors from abusive overbilling by Medicare Advantage (MA) insurance companies.”
According to a summary released by Arnold:
- Almost nine in 10 voters (87%) favor reforms to reduce Medicare Advantage overpayments. This includes (90%) of Democrats, (85%) of independents, and (86%) of Republicans.
- 70% of voters say the government should do more to prevent fraudulent billing practices by health insurance companies in Medicare Advantage.
- 64% say the government should do more to make sure health insurance companies in Medicare Advantage are not overpaid for the coverage they provide [emphasis in original].
Although both Congress and CMS can and should go much further with respect to reining in Medicare Advantage overpayments and heightening oversight, including regulating out of control prior authorization and on-going care denials, the Biden Administration is taking meaningful steps to protect MA enrollees and the Medicare program’s finances. The public – and Medicare advocates – support them in this effort.
March 23, 2021 – D. Lipschutz