Feds Signal Intent for MA Overhaul

The Biden Administration has announced that it is poised to begin collecting feedback regarding proposed sweeping changes to the growing Medicare Advantage (MA) marketplace, marking momentum for what some might describe as the advent of long-overdue reform.

The Request for Information (RFI) issued on Jan. 25 came after officials last month announced an intent to promote competition in healthcare, including “increasing transparency” in the MA insurance market and strengthening MA programmatic data.

In a U.S. Department of Health and Human Services (HHS)-Centers for Medicare & Medicaid Services (CMS) joint press release, officials noted that MA has now grown to over 50 percent of Medicare enrollment – up from just 19 percent in 2007 – and the government is expected to pay MA health insurance companies over $7 trillion over the next decade. The information solicited by the RFI will “support efforts for MA plans to best meet the needs of people with Medicare, for people with Medicare to have timely access to care, to ensure that MA plans appropriately use taxpayer funds, and for the market to have healthy competition,” the release read.

“Americans with Medicare who have managed care plans called Medicare Advantage should not feel like their healthcare is a black box,” HHS Secretary Xavier Becerra said in a statement. “The lack of transparency in Medicare Advantage managed care plans deprives patients of important information that helps them make informed decisions. It deprives researchers and doctors of critical data to evaluate problems and trends in patient care. Transparency is key to the Biden-Harris Administration’s effort to increase competitiveness and ensure that Medicare dollars are spent on first-rate healthcare.”

“The Biden-Harris Administration is committed to improving the Medicare Advantage program,” CMS Administrator Chiquita Brooks-LaSure added. “This Request for Information builds on our existing Medicare Advantage data transparency efforts to further align with Traditional Medicare and provide the data we need to ensure the growing Medicare Advantage program best meets the needs of enrollees.”

Specifically, CMS noted, it is seeking data-related input related to all aspects of the MA program, including access to care, prior authorization, provider directories, and networks; supplemental benefits; marketing; care quality and outcomes; value-based care arrangements and equity; and healthy competition in the market, including the effects of vertical integration and how that affects payment. The RFI also includes a request for comments on improving MA data collection and the method of its release; the designated comment period was set at an expanded 120 days to “encourage feedback from a wider array of stakeholders and to allow time for convenings and other efforts to synthesize detailed feedback to CMS.”

“In healthcare, you can’t improve what you don’t know, and the way to know is with data. We need to have transparent Medicare Advantage data to see what’s working and what’s not working to inform our efforts to protect enrollees and drive high-quality care and competition,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “Through this RFI, we look forward to engaging all parties interested in the Medicare Advantage program.”

So far, officials noted, they have begun collecting data related to more limited aspects of MA, such as Medical Loss Ratios (MLRs), supplemental benefits costs and utilization, public posting requirements related to prior authorization, and race and ethnicity data. CMS has also increased requirements for the completeness of encounter data.

Specifically, as it pertains to MLR data, in May 2022, CMS finalized rulemaking to add 18 additional supplemental benefit reporting categories and to reinstate the MLR reporting requirements that were previously in effect from 2014 to 2017, which required reporting of the underlying data used to calculate and verify the MLR and any remittance amount, such as incurred claims, total revenue, expenditures on quality improving activities, non-claims costs, taxes, and regulatory fees.

For supplemental benefits, officials said they have taken multiple actions that will ensure that by 2025, CMS has the data needed to answer key policy questions related to supplemental benefits, including what is being offered, what plans are spending, which enrollees use which services, the cost to enrollees, and plan-level utilization.

“CMS has (also) conducted technical assistance calls to assist plans in reporting encounter data for supplemental benefits, including Special Supplemental Benefits for the Chronically Ill,” the joint press release read. “CMS is also collecting more data related to the MA Value-Based Insurance Design Model, which tests how MA plans can more comprehensively address the medical and health-related social needs of patients, advance health equity, and improve care coordination for patients with serious illnesses.”

Officials added that they recently finalized prior authorization and interoperability requirements to require MA organizations to publicly report data on prior authorization denials and approvals, and proposed requirements for MA plans to publicly post annual health equity analysis of prior authorization policies and procedures.

Prior authorization is precisely the area in which healthcare watchdogs have most prominently pointed over recent years as being particularly ripe for reform.

An April 2022 HHS Office of Inspector General (OIG) report was blunt: their “case file reviews determined that MA Organizations (MAOs) sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules. MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules.”

The report cited examples of services involved in denials that met Medicare coverage rules such as advanced imaging services (e.g., MRIs) and stays in post-acute facilities (e.g., inpatient rehabilitation facilities). Among the denied prior authorization requests, OIG officials noted that 13 percent – more than one in every eight – met Medicare coverage rules, but were denied nonetheless.

Such concerns ultimately made their way to Capitol Hill.

Politico’s Robert King reported in November 2023 that as MA enrollment continued to surge, with beneficiaries being lured in by lower premiums and more benefits than are offered under traditional Medicare, a “bipartisan group of lawmakers is increasingly concerned that insurance companies are preying on seniors – and, in some cases, denying care that would otherwise be approved by traditional Medicare.”

“It was stunning how many times senators on both sides of the aisle kept linking constituent problems with denying authorizations for care,” King quoted Sen. Ron Wyden (D-Ore.) as saying in an interview, referring to complaints from colleagues during a Senate Finance Committee hearing.

King further noted that there was proposed legislation requiring insurers to more quickly approve requests for routine care, which passed unanimously in the House in 2022, but it stalled in the Senate over cost concerns. The so-called Improving Seniors’ Timely Access to Care Act would have mandated
“insurers quickly approve requests for routine care and respond within 24 hours to any urgent request,” King noted; the legislation was reintroduced last year in the House as part of a larger health care package, but not finalized.

The Kaiser Family Foundation (KFF) in an August 2023 report noted a seemingly contradictory pattern in enrollment: the average Medicare beneficiary in 2023 had access to 43 MA plans – the largest number of options ever recorded – but two massive firms, UnitedHealthcare and Humana, accounted for the coverage of 47 percent of all MA enrollees nationwide. In nearly a third of U.S. counties, more than 1,000 in all, those two firms accounted for at least three-quarters of MA enrollment.

Overall MA enrollment also varies widely from location to location, KFF noted. In pockets of southern California, central Alabama, and western New York and Pennsylvania, nearly every county shows MA market penetration at more than 60 percent. Yet in entire states in the Rockies and upper Midwest, such as the Dakotas, Wyoming, and Nebraska, nearly the entire state is at less than 20 percent.

The aforementioned MA Data RFI can be accessed on the Federal Register’s webpage at https://www.federalregister.gov/public-inspection/current
Comments are due on May 29, 2024.