House hearing ups ante on Medicare Advantage reform

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Political will appears to be growing to reshape the increasingly popular Medicare Advantage program.

At a House Energy and Commerce committee hearing on Tuesday, lawmakers on either side of the aisle called for more oversight of MA following watchdog reports that found impediments to receiving covered care, including improper denials of prior authorization requests, and plans gaming the system in exchange for more funding from Medicare.

“Medicare Advantage is a vital tool for helping seniors and we would like it to succeed. We’re going to proceed to conduct the oversight vital,” said Oversight and Investigations Subcommittee Chair Diana DeGette, D-Colo.

Witnesses on the hearing — officials from the Government Accountability Office, HHS Office of Inspector General and congressional advisory board MedPAC — also pointed to higher rates of beneficiary disenrollment of their last yr of life and opaque plan data, which may complicate oversight efforts.

Surveys have shown MA stays extremely popular with beneficiaries, attracted by lower co-pays and supplemental advantages like vision coverage and telehealth. In this system, Medicare pays private plans a capitated monthly rate to supply look after their beneficiaries based on the severity of their beneficiaries’ needs.

The hearing comes amid inflamed industry debate over the long run of MA.

For-profit hospital lobby Federation of American Hospitals submitted a letter for the record sharing concerns over some MA plans denying patient care and having inadequate care networks.

Meanwhile, MA trade group Higher Medicare Alliance sent a letter to the CMS on Monday urging the agency to safeguard this system as Congress mulls changes to Medicare.

But as Medicare’s hospital profit — a part of which funds MA — limps towards insolvency, lawmakers appear poised to focus on the growing MA program in a bid to crack down on improper payments and care denials.

“That is something that I believe could be very much bipartisan,” said Rep. Gary Palmer, R-Ala.

Coverage delays and denials

It’s not the primary time lawmakers have zeroed in on MA oversight as a technique to save lots of Medicare money: In a Senate hearing on Medicare insolvency in February, Sen. Elizabeth Warren, D-Mass., said “the Medicare system is hemorrhaging money on scams and frauds” resulting from insurers making the most of this system’s rules to extend profits.

Even amid rising congressional criticism of MA, lawmakers on Tuesday reiterated their support for this system overall, which covered roughly 27 million Americans in 2021.

That’s greater than a 3rd of all Medicare beneficiaries, though MA is anticipated to swell to cover half of all Medicare members by 2030.

But lawmakers said they’re increasingly concerned about disparities in the standard of coverage offered by Medicare Advantage plans in comparison with traditional Medicare plans, together with unscrupulous practices in this system leading to higher reimbursement for MA organizations.

A GAO report found MA beneficiaries of their last yr of life disenroll from MA in favor of traditional Medicare at a rate two times higher than other MA members, suggesting the plans may not support high-cost and specialized care, testified Leslie Gordon, GAO’s acting director for healthcare.

Gordon called it a “red flag” for this system that requires more scrutiny from CMS.

As well as, an HHS OIG report published April found MA organizations wrongly denied members care, with plans turning down 18% of payment requests that ought to have been approved.

Erin Bliss, OIG assistant inspector general within the Office of Evaluation and Inspection, testified plans sometimes use internal critical criteria that aren’t required by Medicare. In a single example, an MA plan denied a medically vital CT scan to diagnose a serious disease, citing that the patient hadn’t yet received an x-ray, Bliss said.

When appealed, plan denials were reversed 75% of time, a rate DeGette called “alarmingly high.”

“We’re concerned that patients are receiving the timely care they need in those situations,” Bliss said.

OIG also found plans denied 13% of prior authorization requests that may have been approved under traditional Medicare.

Rep. Michael Burgess, R-Texas, suggested policymakers consider requiring insurers to forego prior authorization for doctors with a consistent track record of submitting accurate data. That strategy, called “gold carding,” is already utilized in some states, including Texas and West Virginia, to pare back on prior authorization delays.

MA payment reform

Together with coverage restrictions, lawmakers at Tuesday’s hearing asked witnesses concerning the scope and severity of improper MA payments in a bid to zero in on specific solutions Congress and the CMS can enact.

Though MA has potential to save lots of the Medicare program money, “the present incentives for MA plans aren’t adequately aligned with the Medicare program,” said James Mathews, MedPAC executive director.

“Substantial reforms are urgently needed,” especially in light of Medicare’s “profound” financial problems, Mathews said.

In 2022, the common MA plan bid was 85% of fee-for-service spending, Mathews said. Nonetheless, Medicare pays plans 104% of fee-for-service costs.

That imbalance is partially resulting from plans making patients appear sicker than they’re to get extra payments from the federal government, witnesses said. The practice, called “coding intensity,” resulted in an estimated $12 billion in excess Medicare spending in 2020, in line with MedPAC data.

Methods include chart reviews, where plans discover and add patient diagnoses that aren’t included within the service record, and health risk assessments, where plans contract with vendors to go to beneficiaries homes and conduct assessments, finding latest diagnoses that always aren’t backed up by other records, in line with Bliss.

GAO estimates that roughly a tenth of Medicare payments to MA plans in 2021 were improper, Gordon said.

To attempt to tamp down on coding intensity, the CMS should conduct targeted oversight of MA plans that routinely use these tools, and reassess whether chart reviews and in-home assessments are allowed to be sole sources of diagnoses for payment purposes, witnesses said. As well as, MA should improve care coordination for enrollees who receive health risk assessments. 

The CMS must also consider replacing the standard bonus program and alter its approach to calculating MA benchmarks, Mathews said.

As well as, the agency should require and validate data for completeness and accuracy before risk-adjusting payments through methods like medical record reviews, Gordon said.

Gordon also suggested the agency conduct more timely audits, because the CMS is currently missing out on recouping a whole lot of thousands and thousands of dollars in improper payments.

Policymakers appeared open witnesses’ suggestions to make sure MA is running as easily as possible, with Rep. Frank Pallone, D-N.J., calling for a further hearing on the matter.

“That is bipartisan … You possibly can be assured that we’re going to be following up,” DeGette said.

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