In its March report to Congress, the Medicare Payment Advisory Commission recommended policymakers make sweeping changes to address serious, ongoing issues with the Medicare Advantage program.
“A major overhaul of MA policies is urgently needed,” MedPAC’s experts wrote in their report.
The commission outlined several issues that have plagued MA beneficiaries and other stakeholders in recent years. These include limited information regarding the quality of MA plans, payment disparities between MA and traditional Medicare beneficiaries, a lack of transparency surrounding private plans’ use of supplemental benefits, and more. And as MA enrollment continues to grow, these problems may only get worse, according to MedPAC.
Quality bonus program flaws
One of the most pressing concerns is beneficiaries’ access to MA plans’ quality information, according to the commission. While these plans currently use the MA quality bonus program to help consumers distinguish between plans, this may not be enough to promote informed consumer decision-making. Many of the program’s quality measures do not actually reflect beneficiaries’ real outcomes or experiences, MedPAC said, giving customers an imperfect or incomplete picture of their potential health plan.
“To make informed choices about enrolling in an MA plan, beneficiaries need good information about the quality and access to care provided by MA plans in their local market,” the report said. “Congress should replace the current MA quality bonus program with a new MA value incentive program.”
Despite these issues, Medicare spends roughly 22% more per beneficiary for MA enrollees compared to those enrolled in traditional Medicare, according to MedPAC. A significant portion of this money helps fund nonmedical supplemental benefits, which include in-home supportive services, but there is little transparency surrounding utilization rates and health outcomes resulting from these benefits. And, still, providers contracted with MA plans often see only a fraction of the reimbursement that they would have otherwise received from traditional Medicare for their services.
“Projected Medicare payments for MA extra benefits … have more than doubled since 2018 and account for a projected 17% of payments to all MA plans in 2024, yet currently there is no reliable information about the extent to which beneficiaries use these benefits,” MedPAC said. “The Commission is concerned that the relatively higher payments to MA plans are subsidized by the taxpayers and beneficiaries who fund the program.”
Home health, hospice rate recommendations
Also in the report to Congress, MedPAC doubled down on controversial payment recommendations for home health and hospice services. The commission advised Congress to reduce 2024 Medicare base payment rates for home health by 7% in 2025, and that Medicare maintain its current reimbursement levels for hospice services, with no positive rate increase. Both recommendations had previously drawn criticism from stakeholders contending that such payment adjustments would threaten home care and hospice patients’ access to critical services.
