Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

Medicare Advantage Average Payment Cut Hurts Beneficiaries

By Jacqueline DiChiara

- The Centers for Medicare & Medicaid Services (CMS) proposes to slash Medicare Advantage (MA) and Medicare Part D (MAPD) plan payments next year by an average payment cut of .95 percent, as stated in February’s 2016 Calendar Year (CY) Advance Notice.

CMS outlined extensive planned changes in the MA capitation rate methodology and risk adjustment methodology in the notice, requesting public comments be completed for consideration by March 6.

A continuation of cuts will negatively impact plans, providers, and beneficiaries, says Linda Fishman, American Hospital Association (AHA) Senior Vice President of Public Policy Analysis and Development, in a March 6 letter to CMS.

Fishman expresses unease that a cap on total risk-adjustment payments at pre-2000 levels starting in 2017 would “limit the benefit of risk-adjustment which is needed for the sustainability of plans that enroll higher acuity populations.”

Repeated MA and MAPD cuts, says Fishman, will ensue heightened premiums, increased cost sharing, confined provider networks, and cutbacks to non-Medicare benefits.

“The continuing cuts,” continues Fishman, “make the MA program less practicable and may curtail the expansion of provider-based MA plans or even reduce participation, resulting in fewer provider plan options for beneficiaries.”

AHA does not recommend CMS proceed with its proposed 2017 coding pattern adjustment to cap.

“By doing so, CMS would establish a fixed pool of risk-adjustment dollars whereby improvements in risk scores might become a zero-sum game in which a plan can only improve its risk-adjusted payments if another plan’s is reduced,” Fishman states.

AHA backs CMS proposals to define best practices and expectations for in-home health risk assessments and supports a proposal to define best practices and expectations to allow MA enrollees to fully benefit from in-home health risk assessments.

AHA also concurs with additional proposals to reduce the weight of six star ratings measures while it evaluates socioeconomic status outcomes. AHA pushes CMS to update its star rating approach.

“Many Medicare Advantage Organizations {MAOs) and provider organizations are engaging in new and creative arrangements that share financial risk and emphasize expanded care management and coordination. Value-based arrangements, such as these, aim to reduce costs while improving health outcomes and enrollee satisfaction,” states Fishman.

AHA also advocates CMS closely monitor MA plan networks for network adequacy standard adherence.

Fishman encourages a CMS proposal to dissociate emergent and urgent care from applying to an enrollee’s deductible so an enrollee will not be financially liable for an amount beyond a copay or coinsurance amount. She also urges CMS to allow an out of pocket copay or coinsurance to count toward fulfillment of a deductible plan.

The Advance Notice from CMS describes a trifold approach to monitor compliance regulation, including direct monitoring, development of a new audit protocol, and compliance and/or enforcement actions.

To enable greater interoperability, CMS additionally is considering instituting a requirement for MAOs to electronically provide updated network information in a standardized format that will eventually be included in a nationwide provider database.

“CMS may view inaccurate provider directories as an indication that the MAO may be failing established CMS standards,” says CMS.

“Additional research into what is driving the differential performance on a subset of measures is necessary before any permanent changes in the Star Ratings measurements can be considered,” CMS states. “However, our preliminary analyses have revealed both practical and statistically significant evidence of differential outcomes for Dual/LIS beneficiaries for the [six Part C Measures].”

As CMS proposes to make exceptions and appeals more manageable and available for beneficiaries, AHA maintains reducing enrollee confusion will improve the overall appeals process.



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