CMS official questions future of Medicare Advantage payments

CMS official questions future of Medicare Advantage payments


A top official with the Centers for Medicare and Medicaid Services questioned the future of Medicare Advantage payments Thursday, pointing to studies from government watchdogs and experts.

The Office of Inspector General for the Health and Human Services Department suggested Medicare Advantage plans may be making their beneficiaries look sicker than they really are to maximize payments from the federal government.

“We too are very concerned with the overall trend lines for code growth in the MA program versus the overall fee-for-service program,” said Jonathan Blum, principal deputy administrator of CMS, at an event in Washington, D.C. Thursday.

The OIG report found MA plans “may have inappropriately” leveraged chart reviews and health risk assessment to maximize payments from the government. The OIG found 20 of the 162 MA companies drove a disproportionate share of the $9.2 billion in payments from diagnoses that were reported only on chart reviews and health risk assessments and on no other service records. Those assessments are typically conducted by the health plan or vendors hired by the health plan, the OIG said.

“We are looking at the same data as the oversight community and we are thinking carefully about how we will respond to that,” Blum said, adding that CMS is considering regulation.

As enrollment in Medicare Advantage grows, the government will need to consider whether changes should be made to the way those plans are paid by the federal government, he said.

The percentage of Medicare beneficiaries enrolled in private plans is expected to reach 50% by 2030.

In 2021, total Medicare payments to MA plans were at bout 104% of traditional fee-for-service spending, according to a report released this summer by the Medicare Payment Advisory Commission.

Plans are paid based on the average amount Medicare fee-for-service spends on enrollees in certain geographic areas.

MedPAC has recommended Congress change that calculation, called a benchmark, to generate more savings for Medicare.

“Should we use a benchmark? Should we try something else going forward for risk adjustment purposes and for overall benchmark purposes?” Blum said.

“That’s going to be one of the hardest technical questions that comes with the Medicare program going forward.”

MA plans get rebates to offer supplementary services to beneficiaries, like gym memberships and vision care, when they bid below that benchmark.

“We have to ask ourselves, what’s driving the opportunity for more benefits and lower costs for private plans and think about payment policies to ensure that they are fair not just to the beneficiaries in the plan but to the overall program,” he said.


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