Healthcare leaders offered dramatically different views on a proposal by the Department of Health and Human Services to rein in payments to Medicare Advantage plans next year.
In a letter Monday to the Centers for Medicare & Medicaid Services, the Healthcare Leadership Council representing healthcare executives said a proposed reduction in diagnosis codes that are used to identify specific conditions and a smaller pay increase for MA plans next year would have a detrimental impact on the ability of some seniors to access care.
HLC President Mary Grealy wrote that some seniors could lose access to some supplemental benefits if MA plans scale back due to skimpier reimbursements. She also said the proposed changes to coding “will prevent providers from recognizing asymptomatic diseases, resulting in an unwanted increase in avoidable emergency room visits, hospital admissions, and higher costs.”
The HLC’s letter was in stark contrast to another letter penned jointly Friday by nearly 40 national healthcare leaders, including academics and congressional advisers. In the letter to HHS Secretary Xavier Bacerra, the leaders said the calendar year 2024 advance notice for proposed MA payment updates and Part D Prescription Drug Program represented important advances in the program.
“These improvements are long overdue and badly needed to assure appropriate financial payments and stewardship for MA funds, fair payments to enable excellent care for sicker patients, sustainability of the overall Medicare program, and security for all beneficiaries,” the letter stated. “We support CMS’s [Center for Medicare & Medicaid Services] finalizing these proposed MA payment changes.”
The leaders specifically applauded the reduction in diagnosis codes, claiming MA plans are beefing up reimbursements under the current system. They said some medical codes are overused by MA plans and identify “asymptomatic disease that may represent future risk but are not contributors to current year expenses.”
The bipartisan Committee for a Responsible Federal Budget claimed adjusting MA payments more accurately with coding could reduce Medicare spending by nearly $355 billion over a decade.
In early February, CMS proposed a meager 1.03% pay bump for MA plans in 2024 — a fraction of the 8% increase CMS awarded them for 2023. The agency cited a slowdown in MA plan growth and a projected deterioration in star ratings for 2024 versus 2023.
CMS gave Medicare Advantage organizations and the public one month to comment on the proposal.
MA plans have come under increased scrutiny as they grow in popularity with Medicare-eligible beneficiaries. The Office of Inspector General accused the plans last year of delaying or denying services covered under Medicare. Last month, a study by the Kaiser Family Foundation found MA plans denied 6% of prior authorization requests by physicians in 2021.
