CMS Finalizes Policies to Crack Down on Medicare Advantage Health Plans
The Centers for Medicare & Medicaid Services (CMS) recently took a major step forward in addressing some of the most egregious practices that Medicare Advantage (MA) private health plans are routinely employing. As you may recall from a previous Regs & Eggs blog post, ACEP responded to two MA proposed regs earlier this year that attempted to tackle the major criticisms that MA plans have faced recently: overpayments, extensive use of prior authorization, and deceptive marketing practices. To CMS’ credit, the agency decided to finalize most of the proposals concerning these issues (with some exceptions) in two final regs released last week.
In the first final reg, the 2024 MA rate announcement, CMS finalizes a change to the risk adjustment methodology that is used for MA health plan payments. As background, CMS has documented a pattern of health plans “over-coding” diagnoses for the patients they treat. Basically, the more diagnoses that health plans can attribute to patient encounters (i.e., the sicker they make their patients out to be), the more they get paid. In the initial proposed reg, CMS had proposed to remove some of the diagnosis codes from which health plans could select—a proposal that would save billions over the next decade. It is important to note that although MA health plan payments would decline relative to their current trajectory, in absolute terms, overall payments would still increase each year. In fact, CMS had estimated that plan payments would still increase by 1 percent in 2024 relative to 2023 even if the risk adjustment changes were implemented immediately. ACEP supported the proposal and noted that health plan payments were still increasing even when CMS had finalized decreases to physician payments. Still though, the health insurance industry pushed back strongly against the proposal, noting that payment reductions would affect their ability to serve their Medicare enrollees.