Medicare Advantage continues to make headlines. RISE examines the most recent news, including MedPAC’s annual status update of the MA program and what a repeal of the health insurance tax may mean for enrollment and earnings.

MA rebates to reach historic highs

During its December meeting, the Medicare Payment Advisory Commission (MedPAC) received a status report on the MA program. Here are some of the highlights:

  • Enrollment continues to grow rapidly. Thirty-four percent of Medicare beneficiaries are now enrolled in MA plans, up from 24 percent in 2011. In 2019, MA enrollment grew 10 percent to 22.5 million enrollees.
  • Medicare beneficiaries have many plans to choose from. For 2020, 99 percent of Medicare beneficiaries have at least one plan available, and the average Medicare beneficiary can choose from 27 plans in 2020 compared to a choice of 23 in 2019.
  • An analysis of the MA bid data finds that MA rebates will increase to $122 per enrollee in 2020. Rebates have been on the rise since 2016 when MA plans received an average monthly rebate per enrollee of $81. This year rebates averaged $107.

For more information, click here for the PowerPoint presentation and here for the transcript of the entire meeting.

MA insurers could win big with repeal of health insurance tax

Congress is set to repeal the Health Insurance Tax, which could be good news for Medicare Advantage insurers. Modern Healthcare reports that the repeal could help boost enrollment because they can keep premiums flat and use the funds to invest in supplemental benefits. Michael Newshel, an analyst at Evercore ISI, told the publication that if the tax is repealed, seniors will see better benefits, but a portion will also likely mean better margins for for-profit insurers.

AMA urges CMS to strengthen MA physician networks

Despite the good news on MA enrollment and earnings, the American Medical Association says the Centers for Medicare & Medicaid Services (CMS) could do more to stabilize physician networks and ensure network adequacy. The association recommended CMS ensure MA network directory accuracy, make sure network adequacy standards provide adequate access and support coordinated care, ensure the list of contracted physicians are more easily accessible, develop an effective communication plan, measure network stability, and form a network adequacy task force to ensure the agency continues to receive feedback from physicians and patients.

Report: Fraud and abuse legal framework must better align with MA and value-based care

A new report by the George Washington University Milken Institute School of Public Health highlights the challenges involved with applying the current fraud and abuse framework to the MA program and the importance of protecting against Medicare fraud and abuse while encouraging innovative health care payments and delivery systems. As Medicare and the private sector shift to paying for values and outcomes, the federal False Claims Act needs to adapt or it may stifle innovative payment models that by design eliminate the direct incentive for volume, according to  Jane Hyatt Thorpe, JD, a professor of health policy and management at Milken Institute SPH, and one of the authors of the analysis. The FCA is one of the most powerful weapons that the federal government can use to fight fraud and abuse in the fee-for-service context,” Thorpe said. “But as Medicare and the private sector shift to paying for value and outcomes, unless the FCA is adapted alongside this system transformation, the law will stifle innovative payment models that by design eliminate the direct incentive for volume.” 

Hospice association urges delay of MA hospice carve-in demonstration

Hospice News reports that the National Hospice and Palliative Care Association (NHPCO) has asked CMS to delay the start of the MA hospice carve-in demonstration beyond its current expected state date of January 2021. The association claims that hospices, health plans, and other stakeholders don’t have enough time to prepare for the demonstration project because CMS hasn’t provided details on how it will work. “Given the timing— and given that we’re at the tail end of 2019—we are growing increasingly concerned that, any attempt to carve hospice into Medicare Advantage would be rushed, wouldn’t be fully baked,” Edo Banach, president and CEO of NHPCO, told the publication. It will also put health plans in a predicament as they must bid for the 2021 plan year soon after the start of 2020 and submit a bid on something they don’t fully understand, Banach said.

Report examines racial, ethnic disparities in Medicare

Better Medicare Alliance, a community of more than 400,000 beneficiaries and more than 140 ally organizations that support MA, has issued a new report entitled, “Convening Report: Addressing Health Disparities in Medicare.” The analysis considers the opportunities and challenges in addressing racial, ethnic, and gender disparities in health care, with a focus on MA. The analysis found that there are quantifiable disparities in care based on patient experience measures, with Asian or Pacific Islanders reporting poorer experiences. Allyson Y. Schwartz, president and CEO of the Better Medicare Alliance, said in a statement that because MA serves a higher proportion of minority and low-income beneficiaries than traditional Medicare, there is an opportunity for plans, providers, and community partners to lead the effort to achieve health equity. Among the recommendations: MA can address health inequities via value-based care and care management, flexible benefit design–including the recently expanded definition of “supplemental benefits” –and the Star rating system. Click here to read the full report.