Radar on Medicare Advantage

✦ CMS has given itself another year to finalize a proposal to begin using an extrapolation methodology in recovering overpayments from Medicare Advantage organizations. The Trump administration in a November 2018 proposed rule (83 Fed. Reg. 54982, Nov. 1, 2018) said it planned to extrapolate the results of Risk Adjustment Data Validation Audits, starting with 2011 contract-level audits, and not apply a “fee-for-service adjuster” to account for inaccurate diagnosis codes in FFS Medicare data used to calibrate the MA risk adjustment model. In a Federal Register notice published on Oct. 21, CMS cited “exceptional circumstances” for exceeding the statutory three-year timeline and explained that it received extensive public comments on the proposal and the FFS Adjuster study that it released just prior to publishing the November 2018 proposed rule. CMS said it plans to publish the final rule by Nov. 1, 2022.

✦ As Congressional lawmakers attempt to whittle down President Joe Biden’s $3.5 trillion budget reconciliation package that includes expanding Medicare benefits, Sens. Kyrsten Sinema (D-Ariz.) and Tim Scott (R-S.C.) are leading a bipartisan effort to protect the Medicare Advantage program from potential cuts. “Payment stability is critical to protecting and strengthening this popular choice for seniors, particularly since these seniors have paid into the Medicare program and expect to continue to receive the excellent, reasonably priced care offered by MA,” a group of 13 senators wrote to CMS Administrator Chiquita Brooks-LaSure. “We stand ready to protect MA from payment cuts, which could lead to higher costs and premiums, reduce vital benefits, and undermine advances made to improve health outcomes and health equity for MA enrollees.” Sinema has previously expressed opposition to prescription drug pricing proposals, such as giving Medicare the authority to negotiate drug prices, in the House and Senate versions of the legislation. Trade groups Better Medicare Alliance and AHIP cheered the move to protect MA. AHIP in August released a paper prepared by Wakely that estimated plans would have an average of 48% to 73% fewer rebate dollars to fund supplemental benefits if Congress adds dental, vision and hearing benefits without adjusting the MA benchmark.

Improving access to health care for underserved populations and eliminating health inequities were running themes throughout the AHIP 2021 National Conference on Medicare, Medicaid & Dual Eligibles, which was held virtually from Sept. 21-24. Speakers participating in various health equity-focused sessions discussed the importance of and challenges associated with collecting the right data to target members’ needs, which are often not directly related to health care.

At AmeriHealth Caritas, which operates Medicaid plans in multiple states, health equity has become a strategic priority, a “key business imperative and a market differentiator,” said Director of Health Equity Danielle Brooks. And all types of data — from claims data to demographic data to information on the social determinants of health (SDOH) — collectively “tells a story about what is happening in our populations,” she said during a panel on data and health equity. Such data also can be used to improve and measure the effectiveness of managed care programs and get at the root causes of health inequities, she added.

As the 2022 Annual Election Period (AEP) approaches, CMS expects the Medicare Advantage program to continue its upward trajectory, with enrollment climbing 10% to an estimated 29.5 million people next year while average monthly premiums will drop by more than $2 to $19, according to agency projections. In addition to the continued expansion of supplemental benefits, including those tailored toward the chronically ill, more MA organizations are expanding their Dual Eligible Special Needs Plan (D-SNP) presence and testing benefit innovations through the Part D Senior Savings Model (SSM) and MA Value-Based Insurance Design (VBID) model in 2022, CMS said on Sept. 29.

During the AEP — which runs from Oct. 15 to Dec. 7 — seniors in nearly every state will have more MA plan options. According to a CMS state-by-state fact sheet based on the 2022 MA and Part D Landscape files, 29 states will see double-digit increases in the number of available MA plans, with a dozen seeing their plan options rise by more than 20%. Participation in the insulin-focused SSM will rise nearly 40% from 76 sponsors offering 1,635 plans in 2021 to 106 sponsors featuring the benefit in 2,159 plans in 2022, including stand-alone Prescription Drug Plans (PDPs) and MA Prescription Drug (MA-PD) plans.

✦ The fate of expanded Medicare benefits, drug pricing provisions and other health care measures included in Senate Democrats’ $3.5 trillion budget reconciliation package hung in the balance this week, as President Joe Biden met with progressive members of the House Democratic Committee to discuss ways to whittle down the spending bill to reach a dollar figure acceptable to moderates in the Senate. Joe Manchin (D-W.Va.) reportedly said he won’t back anything that amounted to more than $1.5 trillion in spending, and Kyrsten Sinema (D-Ariz.) is reportedly opposed to the prescription drug pricing proposals in both the House and Senate bills. White House Press Secretary Jen Psaki on Oct. 4 told members of the press that the president would continue to “work with a range of members from across the Democratic caucus.”

✦ Just 1.3% of Medicare beneficiaries in 2018 had their social needs tracked by Z codes in health care claims, according to a new study from NORC at the University of Chicago. Z codes are a type of ICD-10-CM code used to document social determinants of health (SDOH), but providers are not reimbursed for such claims, which may limit uptake, suggested researchers. NORC found that 1.5% of MA beneficiaries had their social needs tracked through Z codes, compared with 1.2% of beneficiaries in Original Medicare; dual eligibles were three times as likely to have an SDOH Z code.

The HHS Office of Inspector General in prior reports has raised concerns about Medicare Advantage organizations’ heavy reliance on chart reviews and health risk assessments (HRAs) to achieve higher risk adjusted payments. Now, a new OIG report identifies multiple MAOs that have used those sources to a greater extent than their peers, leading the federal watchdog agency to suggest that CMS monitor companies with a disproportionate share of the risk-adjusted payments.

Report Tracked Unlinked Chart Reviews

MAOs may use both chart reviews — which are retrospective reviews of beneficiaries’ medical records — and HRAs — which may be conducted initially, annually and by a third-party vendor in the beneficiary’s home — to support diagnoses that they submit to the encounter data system for risk score determination. In a 2019 report, OIG raised concerns about MAOs’ use of unlinked chart reviews, referring to when diagnoses are added from chart reviews but did not link to a specific service record for the year, which applied to $2.7 billion out of $6.7 billion in risk adjusted payments for 2017. And OIG in September 2020 estimated that diagnoses reported only on HRAs in the encounter data resulted in $2.6 billion in risk adjusted payments for 2017, including $2.1 billion based on HRAs conducted in the home.