Plans have experienced exponential growth, but researchers caution that the outdated payment policy has ramifications.
Medicare Advantage (MA) payment policy hasn't kept up with its rapid growth of 337% from 2006 to 2022, according to a study published in Health Affairs.
Researchers from the USC Schaeffer Center analyzed Medicare enrollment data over that time period and found MA added 22.2 million beneficiaries while enrollment in traditional Medicare declined by one million (-2.9%).
MA penetration increased from 16.9% in 2006 to 49.9% nationally in 2022, and 24% of Medicare beneficiaries with Parts A and B lived in a county with adjusted MA penetration equal to greater than 60%.
"The dramatic growth in MA penetration during the past two decades indicates that beneficiaries are reforming Medicare with their feet," the study stated. "Policy discussions about the future of the Medicare program would be well served by recognizing these trends and accounting for the dramatic shifts in the preferences exercised by Medicare beneficiaries in recent years."
With MA enrollment booming, the study highlights that the way plans are paid hasn't evolved to reflect the growth.
Payment to MA plans is based on the average cost per beneficiary in traditional Medicare in each county, but researchers ask what that will mean if only a minority of Medicare enrollees are in traditional Medicare.
"We know that MA plans are getting overpaid relative to the costs of providing care to comparable beneficiaries in traditional Medicare, and this has contributed to the magnitude of extra benefits offered to MA enrollees," study co-author Paul Ginsburg said in a press release. "While this is appealing to consumers, this is increasing federal spending and accelerating the rate at which the Medicare trust fund is being exhausted."
MA plans have come under scrutiny for receiving billions in overpayments, which they will likely have to pay back from 2018 onwards after CMS released its Risk Adjustment Data Validation final rule.
For policymakers wanting to balance the scales and adjust the payment to MA plans, the study suggests not tying payment policy to costs in traditional Medicare, but rather competitive-bidding benchmarks.
"We can't continue to think of Medicare Advantage as an appendage of the traditional Medicare program," Ginsburg said. "We are at a point where the tail is wagging the dog."
New analysis further supports the need for stronger policies to streamline the administrative process.
More than two million prior authorization requests, accounting for six percent of the 35 million total requests, were denied by Medicare Advantage (MA) plans in 2021, according to a report by Kaiser Family Foundation (KFF).
While beneficiaries of traditional Medicare are rarely required to receive prior authorization, nearly all MA members were enrolled in a plan that required prior authorization for some services in 2022, the analysis found.
KFF looked at the data plans must send to CMS for each MA contract that includes the number of prior authorization determinations made during a year and whether the request was approved, and then examined the use of prior authorization in MA during 2021.
The findings reveal that MA plans made over 35 million prior authorization determinations for the year, which equates to 1.5 requests per enrollee on average. Of those, over two million were denied in full or in part, with adverse determinations making up the majority of the denied requests.
The denial rate varied among insurers, ranging from 3% for Anthem and Humana to 12% for CVS (Aetna) and Kaiser Permanente. Insurers that had more prior authorization requests were generally found to deny a lower share of those requests.
While just 11% of denied prior authorization requests were appealed, 82% of appeals resulted in the initial denial being either fully or partially overturned. Only Kaiser Permanente overturned less than half (30%) of appeals of the insurers analyzed.
Researchers stated that the "medical care that was ordered by a health care provider and ultimately deemed necessary was potentially delayed because of the additional step of appealing the initial prior authorization decision, which may have negative effects on beneficiaries' health."
CMS has recognized the problem and proposed a rule in December 2022 to streamline the administrative process by requiring MA plans to implement electronic prior authorization.
Building on that proposed rule, CMS released another proposal to strengthen prior authorization protections for patients, requiring: a granted prior authorization approval remain valid for an enrollee's entire course of treatment; MA plans to annually review utilization management policies; and coverage determinations to be reviewed by professionals with relevant expertise.
KFF's report concluded by highlighting the importance of observing prior authorization practices in MA plans.
Researchers stated: "As the number of Medicare beneficiaries enrolled in Medicare Advantage continues to grow, a better understanding of prior authorization and other processes and programs to contain spending and manage utilization will be important in evaluating the implications of these policies on utilization and quality, including variation across Medicare Advantage plans and compared to traditional Medicare."
Hospitals are slowly becoming better at adhering to the regulation, but too many facilities are still lagging.
Nearly three out of every four hospitals remain noncompliant with the hospital price transparency rule more than two years after the law was implemented, according to a report by PatientRightsAdvocate.org.
The latest Semi-Annual Hospital Price Transparency Compliance Report analyzed 2,000 of the nation's largest hospitals from December 10, 2022 through January 26, 2023 to determine compliance, based on the inclusion of machine-readable files for all items and services, as well as price display of the 300 most common shoppable services.
The findings reveal a modest increase in compliance percentage since the previous report in August 2022, with 24.5% of hospitals (489) now compliant, compared to 16% last year.
Meanwhile 116 hospitals (5.8%) did not post any standard charges files and were found to be completely noncompliant.
More than half (1,025 or 51.3%) posted negotiated prices clearly associated with payers and plans, but 536 of those still failed compliance because most of their pricing data was incomplete.
"Though the majority of hospitals have posted files, the widescale noncompliance of 75.5% of hospitals is due to most hospitals' files being incomplete, illegible, or not having prices clearly associated with both payer and plan," the report stated. "This noncompliance obstructs the ability of patients, employer and union purchasers, and technology developers to comparatively analyze prices, make informed decisions, and have evidence to remedy errors, overcharges, and fraud."
Some of the largest health systems in the country continue to be some of the biggest perpetrators of the law. None of the hospitals owned by HCA Healthcare, Tenet Healthcare, Christus Health, Providence, Bon Secours Mercy Health, UPMC, Mercy Health, UnityPoint Health, and Average Health were found to be compliant.
On the other end of the spectrum, 58% of CommonSpirit hospitals and 73% of LifePoint Health hospitals were deemed compliant.
Not only did the report find a wide range in pricing information available between hospitals, it also observed variation in data size. There was a significant increase in the number of files that were one to seven gigabytes or larger, although many large hospitals did have files less than 200 megabytes. Making pricing information available is only one aspect of creating more price transparency, made relatively useless without accessibility and user-friendliness.
Payers have also had the same problem displaying data as part of their price transparency rule, but in terms of sheer quantity, hospitals are well behind their counterparts despite a head start. According to Turquoise Health, payer data accounts for 630 terabytes, significantly outpacing the three terabytes of hospital data.
The hospital compliance report also highlights that the lack of enforcement of the law by HHS has given hospitals the leeway to continue disregarding the rule. The two hospitals which HHS has penalized to date—Northside Hospital Atlanta and Northside Hospital Cherokee—were found in the report to now have exemplary and complete pricing files, proving that enforcement is necessary.
Timely enforcement by HHS was one of the recommendations put forward by the authors, along with elimination of price estimates in favor of real prices, clear pricing data file standards, and accountability of hospital executives to attest to the completeness and accuracy of their prices.
The report concluded: "When full compliance with the transparency regulations is achieved, the widespread availability of pricing data systemwide in healthcare will unleash the benefits of competition and consumer choice, lowering the costs of care and coverage to patients, employers, and workers."
A report investigates the information the federal agency has on enrollees' utilization of Medicare Advantage (MA) supplemental benefits.
While almost all MA plans offer supplemental benefits, data on their usage is lacking for CMS, according to a report from the Government Accountability Office (GAO).
The research analyzed plan benefit data for 3,893 MA plans in the 50 states and District of Columbia, reviewed CMS regulations and guidance, and interviewed officials from CMS and six MA plans to better understand how much information on beneficiaries' utilization was available in 2022.
GAO found that all but one plan offered at least one supplemental benefit not covered under traditional Medicare, with vision and hearing being the most common at 98% and 94%, respectively.
The report states that MA plans could offer benefits to reduce avoidable healthcare use beginning 2019 and could offer benefits to improve or maintain the health of chronically ill enrollees beginning 2020. Only one-third of plans offered at least one of the new benefits in 2022—most commonly in-home support services (17%) and food and produce (15%).
MA plans are required to submit data of utilization of these services, known as encounter data, to CMS, but GAO found that information to be limited for two reasons.
Firstly, CMS guidance on encounter data does not specifically mention supplemental benefits, although CMS officials told GAO that the guidance does not differentiate between supplemental and traditional Medicare benefits. However, three officials from MA organizations told the researchers that encounter data for supplemental benefits is not required and that they do not submit it.
Secondly, collecting and submitting encounter data for certain supplemental benefits can be a challenge, according to officials from CMS and two MA organizations. Newer supplemental benefits like food and produce have no procedure code, for example.
"As of October 2022, CMS was in the early stages of assessing the completeness of the encounter data for supplemental benefits and identifying options for collecting enrollee utilization data for the newer benefits but did not have a workplan or timeline for next steps," GAO stated.
"More complete information on enrollees' use of supplemental benefits would put CMS in a stronger position to ensure the benefits effectively support the health and social needs of enrollees."
The report recommended two steps for CMS: clarifying guidance on which encounter data submissions require data on supplemental benefits and addressing circumstances where submitting encounter data for benefits is challenging. HHS concurred with GAO's recommendations.
That proverb should be on the minds of payers and providers alike as both sides continue to battle economic challenges in the wake of the COVID-19 pandemic from their respective positions.
Putting aside differences and working together is the best path forward, says Dr. Bruce Meyer, Highmark Health's new executive vice president and market president for Western Pennsylvania.
In his new role, Meyer is bridging the payer side of Highmark Health and the provider side of subsidiary Allegheny Health Network, giving him a unique perspective on the issues facing the two groups.
Meyer recently sat down with HealthLeaders for a podcast interview to talk about the opportunity at Highmark Health, what specific challenges payers and providers are grappling with, and why the "adversarial relationship" between the sides needs to be left in the past.
This transcript has been edited for clarity and brevity.
HealthLeaders: What is your new role affording you and how are you finding it so far?
Meyer: It gives me the opportunity to really think about how we have to redesign the economics of healthcare from the payer and provider perspective to create a sustainable model. Because right now, we are pretty much in a semi crisis mode, particularly for hospitals and healthcare systems in terms of the economic dynamics of the significant increases in expenses and a flattening of the revenue stream over the last 18 months or so as we've been through the pandemic. We've seen these dramatic changes in economics for hospitals and health systems that is an unsustainable situation. So I feel like I'm in a unique opportunity to try to find a much better future that gives us an opportunity to create more sustainability.
HL: You mentioned that hospitals and health systems right now are in a semi crisis mode and the economic challenges are plenty. What specifically have you found to be of the most concern?
Meyer: I think the biggest concern is really workforce. Between burnout issues and the rise of the nursing workforce shortage, that's profound. And what that has led us to is to have a significant increase in travelers and even foreign nurses coming in just to be able to provide the appropriate care at healthcare sites, particularly in hospitals and health systems. And that's led to very significant increases in costs in patient settings and facility-based settings, but also in doctors' offices because you just have to pay a premium in order to get the staff to be able to take care of patients.
I think second to that is supply chain. Inflationary costs in the supply chain are no different and actually at some level worse than what we've seen in food and housing and other kinds of pricing in this country. In terms of inflation, we've had double-digit inflation in those arenas over the last three years. In healthcare, the same kind of thing with pharmacy costs having had double-digit inflation over the last three years. And those three things combined have just led to a dramatic rise in the expense equation for the facility-based side of the healthcare world.
Pictured: Bruce Meyer, executive vice president and market president for Western Pennsylvania, Highmark Health.
HL: On the payer side, how do you see these problems trickling over?
Meyer: On the payer side, we face a similar dramatic issue, which is that employers and the federal government pay for the vast majority of care in this country. And we've been shifting costs of care onto employers in one way or another, whether they're self-insured or commercial. Employers have reached a point where that continuing inflationary cost of healthcare has simply become unsustainable for them. Employers have said 'I can't sustain this continued increase' and so there is incredible pressure on plans to find ways to plateau the inflationary increase or just cap off increased costs in terms of healthcare.
That's why we've seen a dramatic shift from commercial insurance to self-insured insurance because that's a way for people to help control their costs a little more. Then the onus entirely becomes on the individual and health literacy in this country has not reached a point where individuals really understand cost of care and can make good decisions on their own. Yet that's obviously a goal for us.
HL: What strategies do you feel payers can utilize right now to deal with these challenges?
Meyer: Without tooting the horn of Highmark and what Highmark is trying to do in our catchment area, I think there's got to be a much better partnership between payers and providers. We, for the most part in this country, have had relatively adversarial relationships between payers and providers in which payers kind of view providers as folks who are just spending money unnecessarily and providers look at payers as folks who have a giant pool of money sitting somewhere in a vault somewhere that they're simply not giving to providers for the work that they are doing. And although that's simplistic, it's very real. And that adversarial relationship has been going on for 40 years in this country. It's just accelerated significantly through the pandemic because with significantly less spending for healthcare, payers were able to do well because they still received the payments from the government and from the businesses, but providers struggled mightily because they weren't seeing volumes and getting revenues in.
I think that the solution is that we've got to find a way to partner. We've got to find a way to work together to find a better future for the economics of healthcare in this country. Because our current economic trajectory is truly unsustainable. And what we cannot do is say that there's a winner and a loser in that economic equation. Because ultimately, the loser is the public who need healthcare, and particularly the disadvantaged among us who have poor access or poor health literacy in terms of being able to live their best lives.
A KLAS report examines purchase decisions to better understand what organizations value when it comes to claims management.
When choosing vendors for their claims management, healthcare organizations look for functionality first and foremost, according a report by KLAS.
The research compiles claims management purchase decisions of 24 organizations between February 2020 and November 2022 to assess what factors are at play in the search for vendors.
"The financial well-being of healthcare organizations is critical, especially given the macroeconomic pressures they face today," the authors wrote. "Many are looking at claims management and clearinghouse technology to maximize cash collections and reduce administrative burdens."
Functionality was far and away the top reason for consideration or selection of a claims management vendor, chosen by 83% of respondents.
More specifically, 55% of organizations said the functionality they value the most is a solution that saves time and simplifies claims processing. That was followed closely by claims scrubbing, or full control over editing and customizing rules (50%), and reporting/analytics that provide visibility into outcomes and denial prevention (45%).
On the lower end of desired functionalities were help with provider credentialing and payer enrollments (10%), notifications about payer updates (10%), and coordination of benefits and real-time eligibility (7%).
After functionality, "other" was chosen the most often among reasons, selected by half of respondents. "Other" includes consolidation, expertise, reputation, road map, sales experience, and user experience.
Organizations also showed a preference for existing vendor relationship (46%), cost (42%), and integration (33%).
The report also revealed overall performance scores for vendors, based on customer respondents:
Experian Health: 90.1
SSI Group: 87.2
Change Healthcare: 76.6
A recent survey conducted by Experian Health looked at the state of claims and solutions organizations can utilize.
Among 200 healthcare professionals surveyed, nearly all indicated they had technology in place to help improve claims and reduce denials, with more than half (52%) having updated or replaced their existing claims process technology, and 45% saying they automated tracking of payer policy changes. Providers also invested in patient portals (44%), accurate estimates (40%), and digitizing the registration process (39%).
The federal agency will likely claim back billions of dollars in overpayments from health insurers that operate Medicare Advantage plans.
Payer organizations have expressed their disappointment for the Medicare Advantage Risk Adjustment Data Validation (RADV) final rule released by CMS, claiming the auditing standards will have the "potential unintended consequence" of harming beneficiaries.
The rule, which will allow the federal agency to collect billions of dollars in overpayments, eliminates the fee-for-service adjuster in RADV audits, a method to assess for a permissible level of payment errors.
However, the rule will only apply to audit findings beginning with the payment year 2018, rather than 2011 as previously proposed, absolving payers of significantly more in overpayments.
"CMS has a responsibility to recover overpayments across all of its programs, and improper payments made to Medicare Advantage plans are no exception," HHS secretary Xavier Becerra said in a statement. "For years, federal watchdogs and outside experts have identified the Medicare Advantage program as one of the top management and performance challenges facing HHS, and today we are taking long overdue steps to conduct audits and recoup funds."
Health insurer groups have bristled at the rule, insisting that it will raise costs for plan members and limit their access to care.
Matt Eyles, president and CEO of AHIP,stated: "Our view remains unchanged: This rule is unlawful and fatally flawed, and it should have been withdrawn instead of finalized. The rule will hurt seniors, reduce health equity, and discriminate against those who need care the most. Further, the rule would raise prices for seniors and taxpayers, reduce benefits for those who choose MA, and yield fewer plan options in the future."
Mary Beth Donahue, president and CEO of Better Medicare Alliance, a Medicare Advantage advocacy group, echoed the sentiment.
"While our review of the rule is ongoing, we are focused on the potential unintended consequence of creating an environment of higher premiums and fewer benefits for the more than 29 million seniors and people with disabilities who choose Medicare Advantage," Donahue said.
Meanwhile, David Merrit. Blue Cross Blue Shield Association senior vice president of policy and advocacy, stated: "CMS should have implemented a narrower solution aimed at a few bad actors, but instead this overreaching regulation will raise costs, reduce choice and make it more difficult for seniors and those with disabilities to effectively manage their health."
New research investigates the financial impact of reimbursing telehealth services at parity with in-person care.
Private health insurers were reimbursed similarly for telehealth and in-person visits in 2020, according to analysis from the Peterson- Kaiser Family Foundation Health System Tracker.
The research used data from the Health Care Cost Institute for the 2020 calendar year to examine the cost benefit to payers for reimbursing services provided through telehealth.
After looking at the average paid amount for evaluation and management claims and mental health therapy claims controlling for variation across providers, regions, and the severity of the claims, researchers found little difference between telehealth and in-person services.
"Telehealth use surged with the COVID-19 pandemic as patients sought access to services while providers implemented social distancing protocols," the researchers wrote. "Early in the pandemic, many payers eased restrictions on the use of telehealth and increased reimbursement rates to encourage its use."
For established patients at severity level one, payments were $34 for telehealth and $33 for in-person. At the highest severity level (five), the gap was $143 for telehealth and $137 for in-person.
For new patients, the difference in payments was also negligible—$61 for telehealth and $63 for in-person at severity level one, while severity level five was $273 and $267, respectively.
The trend held true for mental healthcare as well. The researchers found that 52% of mental health therapy claims for people with private plans were delivered over telehealth, with both the lowest (30 minutes of psychotherapy) and highest (psychiatric diagnostic evaluation with medical services) claims dead even in payments for telehealth and in-person.
Additionally, the analysis looked at how paid amounts varied within each provider. Among most of the providers offering the same service by telehealth and in-person, the average paid amount for claims delivered over telehealth was within plus or minus 10% of the payment for in-person claims.
Telehealth serves to increase access and convenience for patients, but if it encourages more utilization of services, it could mean greater spending for payers.
The key factor for the evolution of telehealth is how insurers reimburse services, the researchers concluded.
"We do not know at this point if private insurers continue to pay for telehealth in parity with in-person care," they wrote. "However, if telehealth payments continue to be the same as those for in-person care, then this raises questions as to whether telehealth will reduce the spending on common health services, as some have predicted."
A study finds integrating medical, pharmacy, and behavioral benefits reduces total costs, benefiting both employees and employers.
Focusing on health outcomes and affording employees a more personalized healthcare journey can save employers money, according to a study by Cigna.
Aon, the firm that conducted the study, analyzed medical claims of over two million Cigna members who receive coverage through their employers from 2020 to 2021.
The findings showed that Cigna's integrated employer clients saved $148 per member per year in 2021.
Cigna then used a similar study method to determine the financial impact of having employees participate in health improvement programs, such as wellness coaching, and found increased savings of over $1,400 per member per year.
When members with specific high-cost conditions and therapies were enrolled in a triple-integration plan and needed speciality medicines, the savings were nearly $9,000 per member per year. That increased to more than $11,000 when the speciality drug was for an inflammatory conditions like rheumatoid arthritis and nearly $17,500 for members who took speciality drugs and have a confirmed depression diagnosis.
"Integrated benefits provide a real-time, connected platform that enables us to anticipate our customers' unique health needs and support them as they make important health care decisions – driving lower costs over time," said Katy Wong, chief pharmacy officer of Cigna Pharmacy.
"There is tremendous value for employers in having this holistic view across the continuum of care for their workforce. It produces significant savings on health care, which they can pass along to their employees, and it also improves the health of their workforce, which fuels productivity and business growth."
Additionally, the study found that integrating benefits can help lower the costs of chronic conditions. When members were enrolled in a triple-integrated plan, nearly $400 were saved per year for members with a musculoskeletal diagnosis, more than $1,400 saved per year were when an individual with a musculoskeletal diagnosis was engaged with a health coach, and almost $2,500 saved per member per year with a diabetes diagnosis.
Members with integrated benefits and support from health improvement programs also needed fewer emergency room visits and fewer costly invasive in-patient procedures, the study revealed.
Members with diabetes had a 17% lower rate of avoidable emergency room visits, while members with musculoskeletal conditions experienced 133% lower rate of surgeries in an in-patient setting, 26% lower rate of opioid overdoes, and 16% fewer interventional procedures.
Todor Penev, commercial analytics leader at Aon, said: "Employers should feel confident that integrated benefits deliver on the promise of improved health outcomes and ultimately lower the financial risk to the employer, helping build a more resilient workforce."
Findings from a survey reveal shared negative experiences with surprise billing, billing estimates, and medical debt.
As more and more people continue to choose high-deductible health plans (HDHPs), the patient financial experience is likely to include issues related to medical billing, according to a YouGov survey commissioned by revenue cycle firm AKASA.
The survey fielded responses from 2,206 individuals, including 179 with employer-sponsored HDHPs, between March 9 and March 14, 2022.
When asked if they had ever received a surprise medical bill, 50% of the individuals with employer-sponsored HDHPs said they had.
Respondents were also asked if they had ever received a bill that did not match the upfront price estimate for care or services. More than half (53%) with employer-sponsored HDHPs answered yes.
Negative experiences among the respondents during the billing process didn't just end at receiving the bill but extended into medical debt.
More than a third (34%) of those with HDHPs said they had been harassed by a medical debt collector before, while 44% of individuals with HDHPs stated they had experienced financial hardship from bills.
"Enrollment in high deductible health plans grew 43% from 2014 to 2019, and with it has come a similar rise in patient responsibility for payments," said Amy Raymond, VP of revenue cycle operations at AKASA.
"With high health insurance premiums, deductibles, and cost of care, patients are shouldering more of the financial burden of healthcare. This has led to increasing rates of bad debt for hospitals and health systems. Providers must modernize their systems with options that drive more consistent patient behaviors in paying for services."
In that survey, more respondents either found bills extremely confusing (19%) or somewhat confusing (19%), compared to those that said bills are not confusing (11%) or leaned towards bills not being confusing (14%).