From Becker’s

Medicare Advantage is now the dominant form of Medicare in the U.S., with a projected 54% share by the end of 2024, or more than 33 million enrollees.

According to January estimates from the Medicare Payment and Advisory Commission, Medicare Advantage plans will drive an additional $88 billion in payments to the program in 2024 compared with what traditional Medicare would receive.

Becker’s sat down with Don Berwick, MD, who served as CMS administrator during the Obama administration and is a current health policy lecturer at Harvard Medical School in Boston, to discuss where the Medicare Advantage program stands and potential reforms in the coming years.

Question: What are your broad thoughts on the state of Medicare Advantage as we start off 2024?

Dr. Don Berwick: I think the original ancestral idea of Medicare Advantage to allow Medicare beneficiaries to have the advantage of properly managed care that is coordinated, proactive and population-based was a healthy impulse 30 years ago. Based on the track record of the best managed health plans at that time, it could have reduced costs by a substantial amount, or about 10% to 15% lower costs compared to Medicare then. Who would not welcome better care and lower costs at the same time? But that’s not what happened.

Over time, financially driven interests, especially insurance companies, recognized that given the rules around Medicare Advantage, they could continually increase their revenue per beneficiary and make the program very attractive by offering zero premiums and extra benefits. It was quite a deal. Over the past decade, Medicare Advantage became the most profitable component of many major insurance companies around the country. It did not, in my opinion, fulfill its original promise of saving money. I’m thoroughly convinced now that apples to apples, Medicare Advantage plans cost the taxpayer, the Medicare trust fund and even beneficiaries, much more than traditional Medicare does.

Q: What changes would you like to see CMS make to Medicare Advantage?

DB: The most important ones right now are the ones they’ve started and should proceed with, which is to stop the coding issues. The most obvious and accessible is by upcoding patients by pouring diagnoses into their medical records and raising risk scores in ways that have nothing to do with their care. That’s money that goes right to the bottom line. I’d like to see CMS fix the risk rating system, in fact, I believe the HCC coding system should be basically ended and we should start again with a way to adjust payment that actually has to do with the needs of the patients enrolled. CMS did take a step toward that in 2023.

There are other elements of the payment system which get increasingly complex as you look at them. The quality bonus and star ratings system and the baseline county benchmark adjustments all need to be changed. I also think there should be more transparency around the exact contracts Medicare Advantage plans are signing and who they’re paying. In addition, there should be network requirements that are much more strict than the current requirements, and we need more patient-focused rules around network adequacy.

Q: CMS is seeking public feedback on how data collection and transparency around Medicare Advantage can be improved. It would seem that the government is on the right track for what you’re suggesting.

DB: Correct, and I commend them. There’s been courage and properly directed moves at CMS. However, CMS is always vulnerable, and the political forces that the agency has to contend with have and will push back hard on these changes. CMS needs a lot of support and encouragement from the administration and the public to continue on this journey, though I wish they would go faster and take on even more. For example, the risk coding changes are being implemented over three years unless the insurance industry finds a way to stop them. There are a lot more upcoding reforms that could be included in regulatory changes.

Q: Where is Medicare Advantage succeeding from your perspective?

DB: There certainly are Medicare Advantage plans who are honoring the original idea of truly coordinating care, putting the patient first and eschewing profiteering as their business model. Unfortunately, those are the minority of plans. The opportunity for profiteering is so great that if an MA plan wishes to behave properly — really coordinates care and does not withhold it or delay coverage for it — it would be probably regarded as naive in the business world.

Q: What do you want the future of Medicare to look like? Do you think that all seniors will eventually have no choice but Medicare Advantage?

DB: Given current growth rates and without substantial changes in the systems of payment, risk adjustment and transparency, I believe there’s a big threat that traditional Medicare as we know it will be atrophied significantly and that only the patients least desirable for insurers will end up with traditional Medicare. I’m very concerned and it’s highly unstable right now.

The benchmarks for Medicare Advantage are basically based on the expense pattern of traditional Medicare, so the whole financing calculation system is put in jeopardy by the dominance of Medicare Advantage. I would like to see Medicare Advantage slowed or stopped right now, or at least forced to have better carriers. Insurers need to be held accountable for lowering costs and improving quality at the same time — and lower costs are lower costs, not a calculation game of revenue that leads to an unfair distribution of Medicare expenditures.

The other part of the solution is to improve traditional Medicare with benefits expanded to be on par with Medicare Advantage. It should be cost neutral to beneficiaries as to which they choose. The money needed to improve traditional Medicare would be readily accessible by clawing back the excess subsidies that have accumulated for Medicare Advantage. Let’s have a fair comparison of traditional Medicare under public guidance with free choice for members to go any way they want and with reporting and quality standards that are enforced directly by CMS.

U.S. Department of Agriculture (USDA) Rural Development Acting Under Secretary Roger Glendenning announced that USDA is seeking applications to implement regional economic and community development projects to create thriving communities for people in rural America.

The 2018 Farm Bill authorized the Strategic Economic and Community Development (SECD) initiative to support projects that will help rural people and economies prepare for the future. It can be used to implement projects that are included in multi-jurisdictional and multi-sectoral strategic community investment plans.

To learn more, read full STAKEHOLDER ANNOUNCEMENT.

The Centers for Medicare & Medicaid Services Office of Minority Health (CMS OMH) updated the Mapping Medicare Disparities (MMD) Tool to include 2018 Medicare Advantage encounter data and new visual enhancements. Previously, the MMD Tool used only Medicare Fee-for-Service data but will now include Medicare Advantage encounter data as well.

The MMD Tool is an interactive map that provides a Population View to look at data on a national, state, or local level, and the Hospital View which looks at hospital quality and costs, designed to identify areas of disparities between Medicare enrollees.  This includes racial and ethnic groups in health outcomes, utilization, and spending.  As well as hospital quality and cost of care at the county level. The tool is available in English and Spanish.

Data additions include:

• Added 2018 Medicare Advantage encounter data to provide data on conditions and services. Encounter data refers to information reported from a Medicare Advantage Organization (MAO) or other submitter to CMS about medical items or services a beneficiary received while enrolled in one of the MAO’s plans.
• Added 2022 preliminary and final 2021 Medicare FFS claims to the Population View.
• Added additional Market Saturation measure (i.e., Users per Provider) in the Population View.
• Added Alcohol Use Disorder (AUD) and Drug Use Disorder (DUD) conditions for the Medicare FFS population in the Population View.
• Added 2020 state & county-level Social Determinants of Health (SDOH) data to the Population View.
• Added a census-tract-level Social Determinants of Health (SDOH) view to the MMD tool. This view includes 7 new SDOH measures using 2020 data.
• Added Sickle Cell Disease as a condition for the Medicare FFS population in the Population View, starting with the 2022 preliminary Medicare FFS claims. Added the Behavioral Health Domain to the Medicare FFS Population View. These conditions were previously found under the Chronic and potentially disabling conditions domain.
• Added the 65+ age category for 2021 Medicare FFS and 2018 MA to the Population View

Updated views and features include:

• Addition of a drop-down menu for users to select Medicare FFS or Medicare Advantage population.
• Updated the Profile Views with 2020 American Community Survey data for more data at national, state, and county levels.
• Updated the Hospital View with Hospital Compare data to provide more information to help identify any disparities.

Want to learn more about the MMD Tool? Watch our NEW video and visit go.cms.gov/mmd.

The Centers for Medicare & Medicaid Services (CMS) released the second part of draft guidance for the Medicare Prescription Payment Plan that outlines requirements for Medicare Part D plan sponsors, including outreach and education requirements, pharmacy processes, and operational considerations, for the program’s first year, 2025. The draft guidance is part of the implementation of President Biden’s prescription drug law, the Inflation Reduction Act, which will help reduce the burden of high upfront out-of-pocket prescription drug costs for seniors and people with disabilities with Medicare prescription drug coverage by allowing them to spread out costs over the year rather than requiring they pay in one lump sum.

“Too many seniors and people with disabilities can’t afford to fill their prescriptions at the pharmacy – and that is unacceptable. Thanks to President Biden’s Inflation Reduction Act, certain Medicare patients will be able to spread their costs across smaller, monthly payments,” said Health and Human Services Secretary Xavier Becerra. “In addition to adding flexibility through a payment plan, the law cuts drug costs through provisions such as caps on out-of-pocket costs and the cost of insulin, and a mandate on drug companies to pay a rebate to Medicare if they raise prices faster than inflation. We are committed to ensuring that all people – including people with Medicare – receive the care they deserve at a cost they can afford.”

“One option under the Inflation Reduction Act is the Medicare Prescription Payment Plan, a program specially designed to help people with high drug costs have more predictable costs throughout the year,” said CMS Administrator Chiquita Brooks-LaSure. “People with Medicare prescription drug coverage should look at the Medicare Prescription Payment Plan as well as our Extra Help program to see what programs are right for them. CMS is continuing to implement the many important provisions of the Inflation Reduction Act on time to help older Americans and people with disabilities afford the care they need.”

Today’s draft guidance provides information on outreach, education, and communications requirements to ensure that people with Medicare Part D, particularly those who are most likely to benefit from this program, are aware of the Medicare Prescription Payment Plan. The guidance complements CMS’ forthcoming national education and outreach efforts to engage interested parties, including pharmacies, providers, and beneficiary advocates, on program implementation and ensure that they have the support and materials needed to communicate effectively on the program.

“Older Americans and people with disabilities who have experienced sticker shock from high prescription drug prices will have the option in 2025 to spread out-of-pocket costs out over the year, rather than paying all at once,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “This specifically helps alleviate cash flow issues for people who face high out-of-pocket costs early in the year that may prevent these individuals from taking a drug that could keep them healthy. The draft guidance we have released is a blueprint to help operationalize this program to ensure both health care organizations and people with Medicare are empowered and educated. That way, people in Medicare can make the best choices for their health and financial needs.”

The Medicare Prescription Payment Plan, which goes into effect in 2025, is part of the Inflation Reduction Act’s suite of provisions aimed at lowering prescription drug and health care costs. Other provisions of the law are already helping to lower costs for people with Medicare. On January 1, 2024, the law expanded eligibility for the Low-Income Subsidy program (LIS or “Extra Help”) under Medicare Part D. Nearly 300,000 people with low and modest incomes currently enrolled are now benefitting from the program’s expansion, and 3 million people are eligible for the program but not yet enrolled. In addition, as of January 1, 2024, for some people enrolled in Medicare Part D who have very high drug costs, for the first time, their out-of-pocket costs will be capped at about $3,300 to $3,800 for most people. The Medicare Prescription Payment Plan complements these provisions by allowing individuals to spread their spending over the year rather than paying the total out-of-pocket cost upfront.

CMS is seeking comments from the public on today’s draft part two guidance. The comment period is open for 30 days. Comments received by March 16, 2024 will be considered during development of the final guidance. Comments should be sent to PartDPaymentPolicy@cms.hhs.gov with the following subject line: “Medicare Prescription Payment Plan Guidance – Part Two.”

The draft part two guidance builds on the previously released draft part one guidance and fact sheet (released on August 21, 2023). Final part one guidance is forthcoming.

For the draft part two guidance, please visit: https://www.cms.gov/files/document/medicare-prescription-payment-plan-draft-part-two-guidance.pdf

For the fact sheet on the draft part two guidance, please visit: https://www.cms.gov/files/document/fact-sheet-medicare-prescription-payment-plan-draft-two-guidance.pdf

For an implementation timeline for the Medicare Prescription Payment Plan, please visit: https://www.cms.gov/files/document/medicare-prescription-payment-plan-timeline.pdf

Two new educational videos now available from the National Rural Health Resource Center highlight the prevalence of chronic obstructive pulmonary disease (COPD) in the country’s rural communities and the steps that critical access hospitals and other small rural hospitals can take to improve access to much-needed pulmonary rehabilitation services.

The videos, developed as part of the Federal Office of Rural Health Policy-funded Expanding Rural Access to Pulmonary Care Demonstration Project, are designed to help hospital staff, administrators, board members and community members better understand the seriousness of COPD in rural communities and the benefits of improving access to local pulmonary rehab programs.

The first video, Understanding COPD and Pulmonary Rehabilitation, provides an overview of COPD — its symptoms and causes — and explains how rural-based pulmonary rehabilitation services help to restore independence and quality of life in COPD patients.

The second video, How to Launch a Pulmonary Rehab Program, highlights the benefits — to hospitals and their community — of operating rural pulmonary rehab programs, and shares practical advice and tips on how critical access hospitals and small rural hospitals can successfully build and sustain their own pulmonary rehab programs. The video includes a look at two critical access hospitals — Sparta Community Hospital in Illinois and Hood Memorial Hospital in Louisiana — that opened pulmonary rehab programs in 2023.

By showcasing the voices and experiences of health care professionals who treat COPD and manage pulmonary rehab programs, patients who have benefited from access to rural-based pulmonary rehab services, hospital administrators who have guided new programs at their facilities, and consultants who have supported hospitals in developing their programs, the videos illustrate the real-life impact rural pulmonary rehab programs can have and demonstrate that these programs can successfully operate in rural communities.

Hospitals considering whether establishing new pulmonary rehabilitation services might be a good fit, can access other Center-created resources that may help inform their organization’s planning and decision-making processes:

• A Rural Hospital Guide to Improving Chronic Obstructive Pulmonary Disease
• Rural COPD Podcast Series
• Pulmonary Rehabilitation Campaign, part of the Customizable Communications Toolkit (which is referenced in these videos and includes free templates hospitals can use to educate patients and providers about pulmonary rehab services, and promote pulmonary rehab offerings)

The Health Resources and Services Administration (HRSA) is taking historic steps as part of its Organ Procurement and Transplantation Network (OPTN) Modernization Initiative, leveraging new legal authority proposed in the President’s Fiscal Year 2024 Budget and signed into law as part of the Securing the U.S. Organ Procurement and Transplantation Network Act in September.

For the first time in four-decades supporting the national organ transplantation system, HRSA is issuing requests for proposals (RFPs) to support multiple different contract awards. This action will increase competition ensuring patients and their families benefit from best-in-class vendors.

HRSA is also taking steps to modernize the critical organ matching technology while increasing transparency and accountability by issuing new data reporting requirements to better address pre-waitlist and organ procurement practices. This important work on “pre-waitlist” practices will help address inequities in the transplant waitlist process by reducing racial and ethnic variation both in patient referrals and in organ procurement.

“For the more than 100,000 patients on the organ waitlist and their families, the time for reform is now,” said HRSA Administrator Carole Johnson. “The steps we at HRSA are taking today demonstrate our commitment to a more fair, well-managed, and high functioning organ transplant system in this country. Patients in need of organ transplant, their families and people who have committed to being organ donors deserve no less.”

Throughout the Biden-Harris Administration, HRSA strengthened the OPTN to better meet the urgent needs of the individuals on the organ transplant waitlist. In March 2023, HRSA launched its visionary OPTN Modernization Initiative to strengthen accountability and the performance of the nation’s organ transplant system by focusing on improving the OPTN’s governance, technology, and operations.

Across the nearly 40-year history of the OPTN, all functions of the OPTN were managed by a single vendor, rather than awarding multiple contracts based on technical expertise in areas like IT or operations. In 2023, new legislation reformed the decades-old statute, enabling HRSA to fundamentally transform the system and make multiple different contract awards to access best-in-class vendors. The legislation also gives HRSA the authority to implement its goal of creating an OPTN Board of Directors independent from other OPTN contractors to strengthen accountability and oversight. In addition, the new law eliminated the arbitrary appropriation cap to fund this work.

As part of HRSA’s OPTN Modernization Initiative, HRSA conducted extensive market research, reviewed responses to a HRSA request for information seeking public input on reforms, hosted two industry days with over 300 participants each, and engaged in more than 800 conversations with patients and community members. For the first time in the history of the program, today HRSA is issuing a solicitation to support an independent OPTN Board of Directors and releasing multi-vendor solicitations for the OPTN informed by this market research and centered on improving outcomes for patients.

HRSA actions include:

• Releasing a contract solicitation to break up the OPTN monopoly and create an independent OPTN Board of Directors, including supporting a special election to seat a new Board of Directors within six months of contract award. For nearly 40 years, the vendor that received the only OPTN contract and the OPTN itself had the same exact Board of Directors. To improve OPTN fairness, provide independent governance, and ensure strong conflict of interest requirements for the Board, HRSA is separating the Board of Directors, implementing robust new requirements to ensure the independence of the new Board, and issuing a solicitation for a non-profit entity with expertise in governance and process improvement to support the independent OPTN Board. This will include:
  • Establishing a transitional nominating committee and seeking public input to develop a slate of candidates for a Board of Directors special election.
  • Conducting a special election to establish a new, independent OPTN Board of Directors.
  • Reviewing and providing recommendations for modernizing OPTN by-laws and conflict of interest policy and supporting Board implementation.
  • Reviewing Board composition and structure, making recommendations and supporting implementation of approved reforms to improve functionality and system outcomes.
  • Supporting the new Board of Directors in executing its oversight and management responsibilities.
• Issuing a multi-vendor contract solicitation to support broad competition and best-in-class vendors for critical OPTN functions. This will include:
  • Reviewing and mapping legacy OPTN operations approaches and identifying actionable reforms to improve patient outcomes, system functionality, and system accountability through open competition and heightened HRSA oversight.
  • Developing and implementing processes and metrics for monitoring and measuring patient safety, OPTN member performance, and compliance across all OPTN membership types and phases of the organ donation, procurement, waitlist, matching, transportation, and transplantation processes with a focus on improving patient, donor, and donor family experience.
  • Supporting HRSA Modernization Initiative contractors in the development phase of new modular IT functionalities and the transition to a modernized OPTN IT system that leverages industry-leading standards.
  • Updating and improving IT infrastructure now as a new modernized OPTN IT platform is built and deployed.
  • Providing strategic and administrative services – including improving transparency and increasing public input – to support key OPTN operations functions.
  • Analyzing and implementing approved recommendations to improve transplant program waitlist processes and acceptance criteria.
• Launching the discovery and development phase of the transition to a modernized OPTN IT matching system that leverages industry-leading IT standards and practices. The discovery process will help build the foundation for the comprehensive organ matching IT system redesign in the Next Gen contract solicitation, which will be released this summer.
• Taking action to address “pre-waitlist” inequities in the organ waitlist process and reduce variations in referrals to transplant and in organ procurement practices. HRSA is directing the current OPTN vendor to standardize and update data reporting on referral to transplant center, time-to-patient assessment, time-to-organ procurement, and other data to allow for greater accountability in organ procurement and transplant practices across geography and populations and facilitate improved system performance.

The scope and scale of HRSA’s awards under these new solicitations is contingent on final Fiscal Year 2024 appropriations. HRSA’s Fiscal Year 2024 Budget proposes a $36 million increase over Fiscal Year 2023 to support these modernization efforts.

View the full contract solicitations at https://sam.gov.