AHIP: Allow insurers to cut Medicare Advantage networks

If the Centers for Medicare & Medicaid Services stops insurers from adjusting their Medicare Advantage networks and taking other steps to offset federal funding cuts, America's Health Insurance Plans warns benefits could shrink and out-of-pocket costs could grow.

In a letter to CMS Administrator Marilyn Tavenner, AHIP CEO Karen Ignagni said the Medicare Advantage program faces "severe underfunding" because the healthcare reform law reduces federal funding of these plans by $200 million over the next 10 years.

Ignagni said insurers providing Medicare Advantage plans are trying to work around the cuts and preserve benefits by taking such steps as cutting poor quality providers from their networks. For example, last month UnitedHealth said it's dropping 19 percent of providers from its Medicare Advantage network in Connecticut to build a network that encourages better outcomes, fosters more collaboration and encourages more use of primary care, FierceHealthPayer previously reported.

Although the insurer's decision has drawn strong opposition from affected doctors, and Connecticut's attorney general wants federal officials to investigate the network cuts, AHIP cited it as an example of "health plan initiatives that are designed to maintain value for beneficiaries and improve quality performance in the face of ongoing funding cuts."

Ignagni added that despite the cuts, reduced Medicare Advantage networks like UnitedHealth's still meet network adequacy standards set by CMS, including ensuring that members have access to all provider types within a reasonable time and distance.

What's more, "these initiatives can make an important contribution to achieving key ACA goals of improving quality and holding down costs," she said.

That's why AHIP is concerned that CMS is considering limiting efforts by MA plans to establish "more focused, high-performance networks." Ignagni urged CMS not to restrict Medicare Advantage plans from partnering with providers to promote delivery system reform.

To learn more:
- here's the AHIP letter (.pdf)

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