Health Insurers Balk at Proposed Medicare Advantage Rates

Axios | By Tina Reed
 
CVS Health and Centene executives say newly proposed Medicare Advantage rates for 2025aren't "sufficient" and hinted they could cut benefits if the federal government finalizes the rates as is.
 
Why it matters: More than half of Medicare enrollees are in private Medicare Advantage plans. The specter of potential cuts to seniors' health care benefits in an election year could put pressure on the Biden administration.
 
Catch up quick: Medicare last week proposed cutting base payments to MA plans by 0.16% next year.

• Medicare officials said the plans would still receive $16 billion more next year once payments are risk-adjusted to account for the health of their customers. 
• The officials said they expect beneficiary benefits and premiums to stay stable based on the proposed rates.

Yes, but: CVS Health, which owns Aetna, and other insurers like Centene and Humana said they're expecting a deeper net cut, especially as they face rising medical costs. 

• "The funding level was broadly consistent with our expectation, which we do not believe is sufficient to cover current medical cost trends," CVS Health CEO Karen Lynch said during an earnings call Wednesday.
• The company cut its earnings outlook for 2024 based on the increased use of medical services experienced across the industry.
• Lynch also raised concern that changes coming to Medicare Part D under the Inflation Reduction Act, which includes caps on seniors' drug expenses, will require "additional funding to cover the comprehensive member benefits provided and the increased risk that plans are assuming."

Between the lines: CVS and Centene executives this week said they would "adjust" their plans to account for the proposed rates.

• "The products may be a little bit less attractive for seniors from an industry standpoint if we don't make a lot of progress on the final rates," said Centene CFO Drew Asher on the company's Tuesday earnings call.

What we're watching: Final MA rates for 2025 are expected to be released by early April.

• Centers for Medicare and Medicaid Services officials have said Medicare will incorporate updated information about health care use into the final rate, which could mean a bump to the base payment rate.

‘A Monumental Shift’: Home Health Providers Believe Review Choice Demonstration Is Here To Stay

Home Health Care News | By Patrick Filbin
 
The Centers for Medicare & Medicaid Services (CMS) has been tight-lipped about its Review Choice Demonstration (RCD) plans beyond May 2024.
 
However, industry leaders believe RCD will be extended across the country on a more permanent basis — a development that agency leaders should recognize as a momentum shifting change.
 
“We’re seeing a monumental shift in home health care and how we actually operate,” Kim Gaffey, founder and CEO of Gaffey Home Nursing and Hospice, said during a webinar Thursday. “When we started RCD five years ago, we really had three silos inside our business: clinical, billing and administrative. Oftentimes those three silos worked somewhat independently. As we entered into this RCD world, we had to bring all three silos together and examine how they interacted with each other.”
 
The Illinois-based Gaffey Home Nursing and Hospice offers home health, home nursing and hospice services.
 
Generally, RCD requires home health care providers to submit claims documentation earlier on in the care process and is meant to target and combat fraud in the industry. CMS’ goal in RCD is to reduce improper billing under Medicare’s home health benefit.
 
In 2017, lawmakers successfully blocked the expansion of the Pre-Claim Review Demonstration (PCRD) — the precursor to RCD. The original iteration got off to a rocky start in Illinois, with providers and associations complaining of administrative burden, compliance costs and high non-affirmation rates.
 
A few years later, RCD was introduced in five states: Illinois, Ohio, Texas, North Carolina and Florida. CMS suspended the demonstration in late March of 2020 due to the COVID-19 crisis, but soon after announced that it would resume in August, much to the chagrin of providers in those states.
 
A year later, CMS made a major change to the way billing was processed, which was a reprieve for providers. Today, those providers are reflecting on how those changes have affected the way they do business.
 
“One of the first things that you realize once you’re in the RCD system is how many times each one of those silos touch the document or communicate with the provider,” Gaffey said. “From the first day of patient interaction to the final day of billing, we’re seeing that we are now a team instead of three independent departments. Without implementing and examining that process, you’ll fail at RCD.”
 
Because a premium is put on accuracy and communication in the documentation process of RCD, there are a lot of positives that come with the time consuming aspects of the program…

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