Medicare Advantage Abuses in Focus
A big day for coverage involving abuses in Medicare Advantage (MA).
First, Scan CEO Sachin Jain has a good Health Affairs Forefront blog on MA enrollment issues. Jain recounts the fact that there are behind-the-scenes compensation schemes between some large MA plans and brokers and marketing organizations that lead to steerage of enrollees into plans, often when it is not in their best interest. He notes enrollment in low-rated plans is a problem.
The Department of Justice filed a complaint against certain brokers and MA plans, alleging plans paid hundreds of millions of dollars in illegal kickbacks to brokers in exchange for enrollments into the plans’ products.
Jain proposes a change in how compensation is made for enrollment by favoring high-performing plans and perhaps making compensation is budget neutral.
Second, healthcare policy group KFF posted an issue brief regarding expected Star bonus payments in 2025. It says federal spending on MA bonus payments will total at least $12.7 billion in 2025, similar to spending in 2023, and more than four times higher than in 2015. While Star ratings have dropped, aggregate payments remain high due to enrollment increases.
Third, these bonuses help fund supplemental benefit offerings and MedPAC, the Medicare congressional policy arm, has published a report on such benefits. It finds spending on supplemental benefits has grown significantly over the past several years. MA plans will receive about $86 billion in rebates to provide supplemental benefits to enrollees. This is about 17% of total payouts in the program, or about $2,530 per person. Rebates in 2018 were $21 billion.
MedPAC notes that there is very little transparency in how these rebates are spent, especially with non-Medicare supplemental benefits. Reforms like mandatory submission of supplemental benefits via encounter data and member education have gone in force.
Expect all three of these areas to see Capitol Hill attention this and next year.
(Some articles may require a subscription.)
Additional articles: https://www.healthaffairs.org/content/forefront/changing-broker-incentives-medicare-advantage and https://www.kff.org/medicare/issue-brief/medicare-advantage-quality-bonus-payments/
#medicareadvantage #star #quality #marketing #fwa #supplementalbenefits
https://www.fiercehealthcare.com/regulatory/medpac-look-payments-ma-plans-supplemental-benefits
Lawmakers Debate Key Reconciliation Bill Issues
Democrats are on the attack on the budget reconciliation front, arguing hundreds of rural hospitals teetering on the edge of financial collapse could be shuttered by healthcare funding cuts to Medicaid and the Affordable Care Act (ACA). A new analysis and policy briefer seems to point in this direction.
According to a report authored by experts from the Cecil G. Sheps Center for Health Services Research, the cuts would put more than 300 financially struggling rural hospitals at risk of closure, service reductions, or ending inpatient care. It says nearly half of rural hospitals are operating in the red and 432 are vulnerable to closure. A healthcare policy group KFF briefer also issued today outlines the financial plight of rural hospitals.
Senate Finance Committee Ranking Member Ron Wyden, D-OR, and other Democrats have introduced a new healthcare fraud bill they say actually would tackle fraud, waste, and abuse as opposed to the GOP cuts in the reconciliation bill. The legislation would increase funding for federal and state regulatory and law enforcement agencies responsible for tackling healthcare fraud in government programs. They argue you get an 11-to-1 return for every dollar spent.
KFF also published an issue briefer on the rise in Exchange enrollment over the years. It is currently at its peak at 25.2 million. Over 4 million will lose coverage due to the expiration of subsidy enhancements at the end of 2025. An additional 900,000 would lose coverage due to a proposed Exchange enrollment rule. Another 3.1 million would lose coverage due to ACA and related cuts in the reconciliation bill.
It is interesting that detractors of the bill focus on rural hospital closures due to funding cuts but are unwilling to stand up for reform of hospital pricing in general, which could actually do a great deal for insurance affordability and perhaps even hospital solvency. Numerous studies show that hospitals that control costs can make money on Medicare and Medicaid and generally have better margins. Phasing in site neutral payments and other hospital reforms could go a long way toward this.
Indeed, states seem to be fed up even as the federal government dithers. States are turning to hospital price caps and their own transparency reforms to control costs. Nearly a dozen states have introduced bills over the past year that look to curb healthcare cost growth by limiting hospital prices.
Additional articles: https://www.fiercehealthcare.com/providers/hundreds-rural-hospitals-risk-closure-funding-bills-medicaid-cuts-senate-dems-say and https://kffhealthnews.org/news/article/rural-hospitals-battered-by-big-beautiful-bill-researchers/ and https://www.modernhealthcare.com/politics-regulation/mh-medicaid-fraud-democrats-one-big-beautiful-bill/ and https://www.kff.org/slideshow/how-individual-market-enrollment-changed-with-the-enhanced-premium-tax-credits/ and https://www.kff.org/medicaid/issue-brief/what-are-the-implications-of-the-2025-budget-reconciliation-bill-for-hospitals/
(Some articles may require a subscription.)
#budgetreconciliation #trump #congress #spending #medicaid #coverage #fwa #hospitals #ruralhealthcare #aca #obamacare #exchanges
https://www.modernhealthcare.com/politics-policy/hospital-price-caps-indiana-washington
— Marc S. Ryan
