Health leaders send joint letter supporting 2024 advance notice

Thirty-nine health leaders, public health leaders, and policymakers, some of whom were previously affiliated with the Centers for Medicare and Medicaid Services, the CMS Innovation Center, and the Medicare Payments Advisory Panel, sent a joint letter to the Department of Health and Human Services. support for proposed changes to Medicare Advantage payments.

Signatories support CMS’s proposed changes to the Calendar Year 2024 Advance Notice with proposed payment updates for Medicare Advantage and the Part D prescription drug program.

Insurers have objected to CMS’s proposed 1.03% increase, which AHIP and the Better Medicare Alliance say is actually a decrease of more than 2%.

The letter said, “These improvements are long overdue and urgently needed to ensure proper financial disbursement and management of MA funds, fair payments to ensure excellent care for more severely ill patients, sustainability of the overall Medicare program, and safety for all beneficiaries.”

Dr. Don Berwick, former CMS Administrator, who signed the letter, said, “CMS has taken a rigorous and correct approach to improving payment accuracy in the MA program.”

WHY IS IT IMPORTANT

According to the letter, the continued overpayment of MA Plans represents a financially unsustainable long-term policy.

The letter states that CMS overpayments are the result of hierarchical category of condition (HCC) coding used by plans to modernize or increase the number of diagnoses. As a result, overpayments are projected to be over $600 billion over the next eight years.

In a prior notice, CMS proposes to reduce coding revenue opportunities by eliminating some abused HCCs and standardizing prices associated with code categories to avoid recoding for some conditions, the letter said.

“The net result is projected to be a 1% increase in payments in 2024. In practice, changes will be concentrated among MA plans and providers that use deprecated codes or add more codes for each patient. The proposed changes will leave MA Plans, collectively, in a strong financial position while penalizing those who play the risk adjustment system,” the letter says.

Letter signatory Dr. Richard Gilfillan, former CMS Associate Administrator, said: “These increases and ongoing subsidies leave enough funds in the system for plans and providers to continue to provide benefits and appropriate care for MA recipients. The CMS approach actually redistributes costs. from high coding plans with excessive profits to community based plans that cater to populations with lower incomes.”

On Monday, AHIP provided CMS with comments on the pre-notice, reiterating its concern that the proposal would increase costs and reduce benefits in 2024.

The commentary letter included the results of a study commissioned by AHIP from Wakely Consulting Group. In their study, Wakely analyzed data from a wide range of MA plans and found that proposed changes to the MA risk adjustment model would result in a 3.7% reduction in the average payment to MA. Wakely’s research found even bigger cuts in MA plans that cater for dual entitlement; on average, advance notice will reduce dual entitlement payments by 6.4%, AHIP said.

The Wakely study also noted large differences in outcomes across MA plans and geographic regions.

BIG TREND

MA has grown to just under half of the entire Medicare program. The letter says that instead of cutting costs as originally intended, Medicare Advantage has increased costs for taxpayers and Medicare recipients.

According to the letter, MedPAC has estimated that excessive and unreasonable payments to MA Plans will total $27 billion in 2023. Others predict these overpayments will cost taxpayers $600 billion over the next eight years.

Twitter: @SusanJMorse
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