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Providers, Not Just Payers, Push Back Against Medicare Advantage Pay Rule

Analysis  |  By Jay Asser  
   March 09, 2023

Both sides have raised concerns to CMS over the ramifications of the Medicare Advantage (MA) advance notice rule.

Payers have unsurprisingly voiced their displeasure with the proposed risk adjustment changes to MA, but providers are also taking issue with the rule's quick coding transition.

The Medical Group Management Association (MGMA) and the American medical Group Association (AMGA) were among the voices from the provider side expressing concern for the MA advance notice rule in comments submitted to CMS.

The rule, which changes MA payment methodologies by updating the risk adjustment model for 2024, expectedly drew the ire of insurers over potential payment cuts.

While providers agree with the rule's purpose to create fair and accurate payments to MA plans, they are concerned with the implementation of the proposed switch in MA diagnosis codes from ICD-9 to ICD-10 in the Hierarchical Condition Categories (HCC) model.

"While MGMA shares concerns about abuse in the MA program, we are concerned that this overhaul of the CMS-HCC model may result in unintended consequences that could impact beneficiary access to care and impede important value-based care initiatives critical to the success of medical group practices," Anders Gilberg, senior vice president of Government Affairs at MGMA, said in a statement.

AMGA echoed these sentiments, saying that the proposed changes should not be implemented until stakeholders can understand the impact on MA plan design and care delivery.

"Modifying the HCC model is not a simple technical update or revision," said AMGA president and CEO Jerry Penso.  "It's likely to have significant ramifications, affecting both plans and providers. CMS should recognize that stakeholders can't provide substantive, constructive feedback in such a short timeframe." 

For insurers, the attention is on potential pay cuts and the impact that may have on beneficiaries through increased premiums and reduced benefits.

Insurance trade association group AHIP point to a study commissioned by them and conducted by the Wakely Consulting Group, which found that the proposed changes to the MA risk adjustment model would result in an average payment cut to MA plans of 3.7%. On average, the rule would cut payments for dual eligibles by 6.4%.

CMS said it expects plan payments to increase by 1.03%.

"Our most significant concern with the Advance Notice is the flawed revision to the proposed risk model for 2024…. it included an inadequate process for considering such a complex change and a failure to account for the disproportionate and potentially devastating impacts it would have on certain areas and populations, including individuals dually eligible for Medicare and Medicaid," said Matt Eyles, AHIP president and CEO.

Another analysis commissioned by MA advocacy group Better Medicare Alliance (BMA) and conducted by consulting firm Avalere Health found that the rule would cut payments by 2.27%.

"We are especially concerned about proposed changes to the risk model which could negatively impact Medicare beneficiaries, especially those with chronic conditions, those who are low income, and those who are dually eligible for Medicaid. As a result, these changes place at risk the substantial progress made in improving care and outcomes for Medicare beneficiaries," said Mary Beth Donahue, BMA president and CEO.

While insurers and providers have pushed back against the rule, 39 healthcare leaders from public health, public policy, health care executive management, and clinical care voiced their support.

In a letter to CMS, the leaders stated: "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."

Jay Asser is an associate editor for HealthLeaders.


In comments submitted to CMS about the Medicare Advantage (MA) advance notice rule, insurers are frustrated with potential pay cuts while providers are wary of the quick switch in diagnosis codes.

Payers and providers both feel the proposed changes could have detrimental impact on beneficiaries and patients.

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