House lawmakers believe the Centers for Medicare & Medicaid Services (CMS) needs to ratchet up its scrutiny and oversight of Medicare Advantage plans amid concerns over higher spending and coverage denials.
Several lawmakers on the House Energy and Commerce Committee’s oversight subcommittee questioned whether CMS is doing enough to adequately oversee the popular MA program. The remarks could be a precursor to greater pressure on CMS—which did not have an official attend the hearing—to adopt reforms to the lucrative MA industry.
“It’s a shame CMS did not agree to testify at this hearing to speak to the work the agency is doing to improve this program,” said Rep. Morgan Griffith, R-Virginia, ranking member of the subcommittee. “As Medicare Advantage takes on an even larger presence in the Medicare program and as the Medicare hospital insurance trust fund is projected to be insolvent by 2028 it will continue to be important to assess how well Medicare’s current payment methodology for MA is working.”
While lawmakers overwhelmingly supported MA and noted its popularity, some voiced concerns over issues with denials in coverage due to prior authorization and reports of overspending compared with traditional Medicare.
“While there are many plans that appear to be acting responsibly, some are not, and these bad actors are costing taxpayers money and, more importantly, jeopardizing the health of seniors,” said Rep. Frank Pallone, D-New Jersey, chairman of the full committee.
He added that some plans have found a way to get greater payments from Medicare “without necessarily providing better healthcare services to beneficiaries. In short, some insurance companies appear to have figured out a way to game the system.”
Representatives with the Department of Health and Human Services’ Office of Inspector General (OIG), the Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPAC) detailed several failings with the MA program that require attention from CMS.
One issue is that CMS has not been detailed enough in the guidance it offers to plans on when a denial for coverage may be appropriate, panelists at the hearing said. A recent report from the OIG found that at times MA plans have delayed or denied beneficiaries’ access to care that met Medicare’s coverage requirements.
OIG was also concerned with plans’ reliance on chart reviews to add diagnoses to the service record of a patient and get a higher payment from Medicare. OIG has found that Medicare paid an extra $6.7 billion in 2017 for diagnoses only through chart reviews, said Erin Bliss, assistant inspector general with the OIG, at the hearing.
The center was also concerned with the sole reliance on health risk assessments where a third party evaluates patients at their homes. The OIG found that Medicare paid out $2.6 billion in 2017 for diagnoses only via the assessments, and there wasn’t another record for any other procedures or tests.
CMS agreed with a recommendation by the OIG to perform targeted oversight of MA plans that drove the most risk adjustment payments resulting from the health risk assessments, but the agency hasn’t implemented it. The agency has taken steps to address the role of chart reviews in audits to validate MA diagnoses.
CMS also needs to strengthen audits and validate MA encounter data, which detail a plan beneficiary’s health and treatment based on clinician encounters, said Leslie Gordon, GAO’s acting director for healthcare.
Rep. Jan Schakowsky, D-Illinois, asked panelists if CMS needed more scrutiny. Several responded that CMS has the authority to implement changes, including a recommendation from MedPAC to not rely solely on health risk assessments for diagnoses.
“CMS should take more than the necessary statutory minimum when recovering overpayments from plans,” said James Mathews, executive director of MedPAC.
Other lawmakers questioned whether CMS has enough resources to adequately oversee the program.
“The only conclusion I can come to is the agency is understaffed, that Congress has not been paying its attention to saving the taxpayers money and reforming the process,” said Rep. Tom O’Halleran, D-Arizona. “I am very disheartened from what I have seen today.”
CMS said in a statement to Fierce Healthcare that it got the invitation to attend the committee on June 22. Health and Human Services has a longstanding policy that it needs at least two weeks notice to attend a congressional hearing. It would be willing to appear at a hearing in the future, the agency said.
Regarding the issues with MA, CMS told Fierce Healthcare that it will issue clarifying guidance for MA plans on "the appropriate use of clinical criteria for prior authorization decisions," a spokesperson said. "We will direct MA organizations to use this clarifying guidance to examine their processes and address vulnerabilities that may result in inappropriate denials."
The agency also relies on coding pattern adjustment factors for each payment year based on coding trends in MA payments, the spokesperson added.
Advocates for the MA program said plans are able to give seniors major savings on out-of-pocket costs and premiums each year. The Better Medicare Alliance (BMA), a collection of advocacy and insurance industry groups, said in a letter to the committee that beneficiaries reported a $325 increase in savings from 2018 to 2019.
“The comprehensive, coordinated care delivered in Medicare Advantage and better health outcomes leads to high satisfaction among beneficiaries,” the group’s letter said.
The group also took umbrage with recommendations to not rely only on health risk assessments and concerns with prior authorization. A statement from BMA said the assessments are performed by a licensed clinician and have helped contribute to a lower rate of hospitalizations compared with traditional Medicare.
BMA added that the OIG prior authorization report only covered a small sample of 33 denials in June 2019 and that prior authorization has helped keep costs low for seniors in the program.