Fee-for-service Medicare

Despite the program receiving continued pushback from progressive lawmakers, data from the since-renamed Global and Professional Direct Contracting (GPDC) Model suggests that it is making significant strides, with participants driving gross savings exceeding $870 million in 2022, more than seven times the $117 million in gross savings reported for performance year 2021. At least five known Medicare Advantage sponsors have subsidiaries participating in the model, which allows Accountable Care Organizations (ACOs) to share risk and receive capitated payments for serving fee-for-service (FFS) beneficiaries.

CMS, in a fact sheet highlighting the performance year 2022 data, observed that the total financial savings increased year over year because of “growth in model participation, a longer performance period in PY2022 (12 months vs. 9 months in PY2021), and performance improvements by model participants as they gained experience.” Last year, 99 Direct Contracting Entities participated in the model, up from 53 DCEs in 2021, with 21 million beneficiary months, compared with 3 million beneficiary months in 2021.

Despite the program receiving continued pushback from progressive lawmakers, data from the since-renamed Global and Professional Direct Contracting (GPDC) Model suggests that it is making significant strides, with participants driving gross savings exceeding $870 million in 2022, more than seven times the $117 million in gross savings reported for performance year 2021. At least five known Medicare Advantage sponsors have subsidiaries participating in the model, which allows Accountable Care Organizations (ACOs) to share risk and receive capitated payments for serving fee-for-service (FFS) beneficiaries.

CMS, in a fact sheet highlighting the performance year 2022 data, observed that the total financial savings increased year over year because of “growth in model participation, a longer performance period in PY2022 (12 months vs. 9 months in PY2021), and performance improvements by model participants as they gained experience.” Last year, 99 Direct Contracting Entities participated in the model, up from 53 DCEs in 2021, with 21 million beneficiary months, compared with 3 million beneficiary months in 2021.

One week after the Senate Finance Committee held a hearing on misleading marketing and broker compensation practices in Medicare Advantage, Reps. Frank Pallone, Jr. (D-N.J.) and Richard Neal (D-Mass.) wrote CMS Administrator Chiquita Brooks-LaSure urging the agency to increase oversight and transparency of broker participation and compensation. Specifically, they asked Brooks-LaSure to address this in the upcoming Contract Year 2025 Part C and D Policy and Technical Changes proposed rule, which was submitted to the White House Office of Management and Budget on Aug. 24 and cleared OMB on Oct. 27, with publication still pending as of AIS Health press time. “We appreciate the previous actions taken by [CMS] to prioritize the health and well-being of our nation’s seniors by ensuring that beneficiaries have access to accurate and unbiased information about Medicare coverage. These policies protect the integrity of the Medicare program and ensure that seniors are able to access affordable health coverage,” wrote Pallone, who is ranking member of the House Energy and Commerce Committee, and Neal, ranking member of Ways and Means. But they encouraged CMS to build on those policies and reform total broker payments by setting standardized limits on compensation. Ensuring such payments are set at “reasonable amounts” would eliminate “incentives that encourage enrollment in plans with the highest broker payment that may not be best suited for seniors’ health needs,” they wrote.

As the CMS Center for Medicare and Medicaid Innovation works toward its goal of having all fee-for-service (FFS) Medicare beneficiaries and most Medicaid beneficiaries in accountable care relationships by 2030, CMMI this year has unveiled three models aimed at advancing value-based care. One of them is the Guiding an Improved Dementia Experience (GUIDE) Model, which combines care coordination, caregiver support and respite services to improve the quality of life for people with dementia and their caregivers while delaying avoidable long-term nursing facility placement. Although the model does not serve Medicare Advantage beneficiaries, its mission appears to parallel specialized MA plans that offer supplemental benefits aimed at helping people age in place, deploy interdisciplinary care teams and empower caregivers to play an active role in their loved ones’ care.

An estimated 6.7 million people in the U.S. are currently living with Alzheimer’s or another form of dementia, and that number is expected to grow to nearly 14 million by 2060. Medicare will cover most of those Americans at some point, but the program as it exists today does not have a standardized care delivery approach for dementia, observed Tonya Saffer, director of the division for health care payment models at CMMI, during a Sept. 13 webinar on the model hosted by Manatt, Phelps & Phillips, LLP.

A significant number of seniors face financial burdens that impact their health, regardless of what type of Medicare coverage they have, according to the Commonwealth Fund’s 2022 Biennial Health Insurance Survey, published Sept. 19. Survey results from about 1,600 Medicare beneficiaries ages 65 and older showed that more than one-third lived at below 200% of the federal poverty level (FPL), an income threshold of $27,180 for 2022. And nearly 1 in 5 seniors reported being underinsured (defined as having high out-of-pocket costs or deductibles relative to one’s income), with low-income seniors reporting the highest underinsured rates.

By coverage type, the most likely group to be underinsured were traditional Medicare (TM) beneficiaries without any supplemental coverage. TM beneficiaries with supplemental coverage (such as a Medigap plan, union-based coverage or dual eligibility with Medicaid) were the least likely to be underinsured, with Medicare Advantage members falling in between. In their analysis of the survey results, the report’s authors pointed out that seniors may not want to pay premiums for Medigap plans, can be denied from purchasing supplemental coverage, or be “subject to underwriting…because in most states, there is only a limited period during which plans are required to issue policies.”

As the 2024 Annual Election Period approaches, Medicare Advantage insurers that began marketing on Oct. 1 have been touting service area expansions and/or the robust provider networks attached to their plans. But in the months and, in some cases, days leading up to the Oct. 15 start of open enrollment, some high-profile contract negotiations have played out in a very public way, with providers expressing their frustration with administrative delays, care denials and less-than-adequate rates. And the loss of key providers could have serious consequences from a network adequacy standpoint, even leading to an enrollment freeze if MA organizations are not careful, warns one compliance expert.

On top of concerns about overly burdensome prior authorization policies used by MA organizations, “providers are getting squeezed” from both sides, remarks Jane Scott, executive vice president of special projects for Rebellis Group. “Providers are getting squeezed on the fee-for-service, CMS side for their reduction in fee reimbursement. And then the health plans also want to reduce reimbursement for savings on their own part, while trying to stay competitive. And in doing that, they may have to reduce their service area size, their network offering, different things…and so that causes some market change.”

As the Medicare Payment Advisory Commission (MedPAC) continues to consider ways Congress could achieve greater parity between traditional, fee-for-service (FFS) Medicare and Medicare Advantage, its September public meeting touched on several program aspects that are ripe for change. Three such areas — MA benefit standardization, access and quality, and encounter data — are slated to be addressed in separate chapters of its June 2024 report, MedPAC confirmed. Meanwhile, an analytical discussion on alternative methods of assessing MA coding intensity could lead the commission to conclude that MA plans are overpaid by even more than its current estimates, which are already disputed by the industry’s largest trade group.

Beneficiary switching from fee-for-service (FFS) Medicare to Medicare Advantage more than tripled between 2006 and 2022, contributing to the MA enrollment boom that’s taken shape over the past two decades, according to a study published this month in Health Affairs. MA enrollment has been “accelerating” since 2019, researchers said, and switchers from FFS to MA were the biggest driving force behind this trend.

The study authors broke down beneficiaries from CMS’s enrollment database into five categories: stayers, switchers to MA, switchers to FFS, beneficiaries who newly gained eligibility, and beneficiaries who lost eligibility (largely those who died during the year). While new enrollments among those who had recently turned 65 also contributed to MA enrollment growth, it was at a smaller scale than growth caused by switching activity among existing beneficiaries, researchers observed.

Since the January release of CMS’s controversial final rule on Risk Adjustment Data Validation (RADV) audits, all has remained quiet on the litigation front. But in a complaint filed in a federal court on Sept. 1, Humana Inc. opens old wounds regarding the years-long leadup to the final rule and invokes the Administrative Procedure Act (APA) in asking the court to vacate the rule. In doing so, it seeks to stop CMS from applying its new audit policy of seeking extrapolated recovery amounts.

Issued on Jan. 30, the final rule (88 Fed. Reg. 6643, Feb. 1, 2023) pertains to contract-level audits that CMS began conducting more than a decade ago to verify the accuracy of payments made to MA organizations and recover improper payments. In that rule, CMS codified its plans to begin extrapolating RADV audit findings with payment year 2018 — but not findings for payment years 2011 through 2017, as once proposed. And the agency confirmed it would not adopt a “fee-for-service adjuster” to account for any impact from unaudited diagnosis codes in FFS data that are used to calibrate the MA risk adjustment model.

Medicare Advantage members using post-acute care services are reporting less favorable outcomes than their fee-for-service counterparts, according to a new study published in JAMA Health Forum. Not only are outcomes worse, MA beneficiaries are also using fewer post-acute care services than those enrolled in traditional Medicare (TM), which study authors said could be linked to payers’ tight prior authorization (PA) requirements.

The study authors explained that prior research on this topic, which has generally shown favorable post-acute outcomes in MA, relied largely on administrative data, which can’t capture individual beneficiaries’ perception of quality or health status. That’s why they looked to self-reported data from the National Health and Aging Trends Study, focusing on seniors age 70 and older who lived in community settings (rather than nursing homes). “Examining self-reported patient outcomes is key to ensuring that the MA program adequately meets beneficiaries’ needs, particularly since there is evidence that MA enrollees are treated at lower-quality SNFs [skilled nursing facilities],” authors wrote.