Fee-for-service Medicare

Survey Shows Many Seniors Struggle to Afford the Cost of Care, Regardless of Coverage

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.”

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Pre-AEP Provider Pushback Offers ‘Reality Check’ for Medicare Advantage Plans

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.”

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MedPAC Processes Headache-Inducing Alternatives for Estimating MA Coding Intensity

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.

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Switchers Are Driving Medicare Advantage Growth, Suggests New Study

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.

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Lamenting Lack of FFS Adjuster, Humana Suit Reopens RADV Wounds

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.

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MAOs Should Get Member Feedback, Rethink PA as Post-Acute Outcomes Decline

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.

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With Humana Pact, Interwell Health Aims to Defragment Kidney Care for More Patients

Since the 21st Century Cures Act loosened enrollment rules in 2021, enabling more patients with a previous diagnosis of end-stage renal disease (ESRD) to enroll in Medicare Advantage, MA insurers have been striking innovative partnerships with kidney care management companies to better manage care and control costs for kidney disease patients. Most recently, Humana Inc. — one of the leading MA insurers serving ESRD enrollees — unveiled a new value-based care pact with Interwell Health that will cater to most Humana MA HMO and PPO members in 13 states living with chronic kidney disease (CKD), as well as members across the country living with ESRD.

According to Brandon Spicer, director of kidney care at Humana, the insurer offers a variety of programs for members living with CKD and ESRD, and its program care managers “work closely with providers to give patients individual support and guidance while educating them about their disease, supporting their physician’s care plan and assisting with coordination of care.”

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News Briefs: Switch Rate From FFS Medicare to MA Peaked at 7.8% in 2021, Research Finds

As Medicare Advantage attracts a greater share of Medicare-eligible enrollees, switching from fee-for-service Medicare to MA has been on the rise since 2010 and peaked at 7.8% in 2021, according to new research published in Health Affairs. Researchers used data from the CMS Medicare Enrollment Database and the Risk Adjustment Processing System, and their primary objective was to understand where the bulk of new MA membership is coming from (i.e., FFS Medicare vs. new-to-Medicare) and those individuals' health profiles. After 2010, switching from MA to FFS Medicare consistently declined while switching in the other direction increased, with the greatest difference in rates occurring in 2021, when just 1.2% of individuals left MA for FFS Medicare, according to the analysis. (The switching rate was defined as the percentage of switchers out of the total number of switchers and stayers in either FFS Medicare or MA.) Between December 2021 and December 2022, the overall switching rate from FFS to MA averaged 7.4%, and men had a higher switching rate than women, researchers observed. During that time, the switch rate from FFS to MA was highest for Black beneficiaries (15.6%), closely followed by Hispanic beneficiaries (15.0%), and the lowest rate was among white enrollees (6.4%). Researchers noted their analysis was descriptive in nature and that they were not able to discern the underlying factors driving the observed switching patterns, such as aggressive marketing or attractive plan benefits. Moreover, the analysis did not differentiate between voluntary and involuntary switching. As the MA program continues to grow, however, “understanding reasons for switching will become important,” they observed.

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News Briefs: CMS in 2022 Issued $200,000 in Fines for One-Third Financial Audit Findings

Only three Medicare Advantage insurers received a civil monetary penalty (CMP) as a result of a program audit last year, according to the 2022 Part C and Part D Program Audit and Enforcement Report published on July 18. CMPs based on 2022 program audit referrals totaled $63,220, and another $200,000 in fines stemmed from one-third financial audit findings. By contrast, the previous audit cycle resulted in approximately $1 million in CMPs issued based on 2021 referrals, and nearly half of that amount related to one-third financial audits. The latest audit cycle included 291 contracts under 25 separate parent organizations covering approximately 33.6 million, or 62%, of beneficiaries enrolled in the Parts C and D programs. CMS in the report said the amount of the CMP “does not automatically reflect the overall performance of a sponsor” and that the summary of findings is “not intended to reflect overall industry performance and should not be interpreted to mean that there are pervasive issues throughout the industry related to the noncompliance we identified.”

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Facing Familiar Legal Challenges, NYC Must Put Aetna Retiree Plan on Hold

The City of New York and its retirees this month are experiencing déjà vu, and CVS Health Corp.’s Aetna is caught in the middle. The health insurer was slated to begin serving retired municipal workers and their eligible dependents on Sept. 1 via a Medicare Advantage PPO plan. But thanks to the latest court order in a years-long series of setbacks, the city’s plan to privatize retiree health coverage again is on hold.

Led by Mayor Eric Adams (D), the city was initially supposed to transition some 250,000 retirees and dependents to a private Medicare plan administered by Elevance Health, Inc., in January 2022. The move was delayed by a petition from retirees, and state Supreme Court Judge Lyle Frank ruled that the proposal violated city law by charging retirees $191 per month to maintain their fee-for-service Medicare coverage. Amid the legal challenges, NYC Comptroller Brad Lander declined to register the contract. After Elevance backed out of the deal, the city struck an agreement with Aetna to make its PPO plan the only premium-free coverage option.

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