Most physicians may not look to MA plans as a route to qualify for MACRA payment bonuses until 2021, a former White House healthcare adviser says.

April 6—Medicare Advantage (MA) insurers were surprised and excited by a recent Trump administration request for ideas to transform the program.

The 2018 rate announcement and call letter for Medicare Advantage and Medicare Part D plans, issued April 3, was similar to the rates and policies proposed in February, with one big exception. It included a request for information (RFI) from insurers and others on ways to “transform the MA and Part D programs,” according to a release.

“That was definitely something that we were surprised to see and excited to see—that we can really submit a lot of great ideas” to the Centers for Medicare & Medicaid Services (CMS), said Molly Turco, director of policy and outreach for the Better Medicare Alliance.

Mark Newsom, a vice president for Humana, viewed the RFI as a springboard for the Trump administration’s push to reduce administrative burdens in health care.

“It’s going to be interesting what all of the plans and other stakeholders come up with,” Newsom said.

Transformation Ideas

Innovation ideas, which are due by April 24, could include changes to what is allowable as a Medicare benefit or supplemental benefit, according to Newsom. He also noted an interest in getting MA plans more opportunities to participate in payment reform initiatives by the Center for Medicare and Medicaid Innovation, beyond a recent value-based insurance design initiative.

“There’s ever more academic research showing the social determinants of health, so we hope to have an open and robust discussion with this administration about it,” Newsom said.

Turco agreed that many transformation ideas will likely focus on socioeconomic factors.

Stacy Sanders, federal policy director for the Medicare Rights Center, said more efforts are needed to help beneficiaries navigate and understand additional complexities created by initiatives to tailor cost sharing or extra benefits to their health needs.

Payment initiatives that show positive results in MA plans also need to be implemented in the traditional Medicare program, she said. 

CMS also could innovate by accelerating and expanding its delivery of data to plans.

“We give a lot of data to CMS; CMS gives us some data back, but we don’t get access to all fee-for-service claims, for example, which could be leveraged to do outcomes-based, value-based purchasing for prescription drugs,” Newsom said.

Another aspect of the MA announcement that insurers viewed as a welcome surprise was CMS’s decision to reduce its use of encounter data, which has drawn broad criticism. The rate announcement said CMS will reduce the percentage of encounter data used in determinations of MA enrollee risk scores from 25 percent in the proposed rule to 15 percent in the final 2018 performance year update.

“That was a little bit of a surprise because they had proposed to freeze it, but we think it was great that they went further and dialed it back,” Turco said.


Insurers view the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as key to a transformation to value-based payment, and they were disappointed that the new rule lacked mechanisms for fostering collaboration with physicians, Newsom said. MACRA allows physicians to qualify for a 5 percent annual bonus if they meet advanced alternative payment model (APM) requirements for working closely with an MA plan, among other APM options.

“Unfortunately, there was no discussion of that” in the rate announcement, Newsom said.

Despite the lack of detail on physician interaction with MA plans under MACRA, Kavita Patel, MD, formerly a policy director for the Obama administration, said she expected that by 2021—after MACRA bonuses and cuts have taken effect—most physicians will look to qualify for APM bonuses by working with MA plans.

“More and more physicians are going to start to take notice if they think both down and up financially it can have an effect on them,” Patel said.

Patel expected a continued trend toward greater employment of physicians, especially by hospitals.

“In MA, as well as Medicare, hospitals are going to continue to want to see ways for the program to reform, mostly so that they can get better margins,” Patel said.

Benchmark Cap

The MA rate announcement and call letter also was noteworthy to insurers for its statement that CMS officials lack the regulatory authority to change the benchmark cap, leaving plans in some counties ineligible for bonus payments under the Medicare Star Rating system even if they demonstrate quality care.

“There’s an argument that if you’re a good plan and you get four- or five-star ratings, you should get a bonus, that it’s ridiculous not to get a bonus,” said Tom Scully, a CMS administrator under President George W. Bush. “Most all of that is totally true.”

Scully worried that removal of the cap could mean a return to a time when MA plans were perceived to be overpaid.

“It’s clearly the right thing to do theoretically to take the cap off; I just worry about going back and getting this comparison to fee for service,” Scully said.  

Patel said changes to the benchmark cap may be addressable through legislation because Democrats have been taking a more positive view toward MA plans, with increasing numbers of studies and third-party evaluations showing the value that the plans bring for enrollees.

“Let’s just say, if overpayments were a perception, that that extra money wasn’t buying you any value, there’s been a [recent] drive to define value as best as possible,” Patel said.

However, the high partisanship around health care may preclude any must-pass “legislative vehicle” for enacting such a statutory change, Patel said.

Any major changes to Medicare—such as a shift to a premium-support model or increasing the eligibility age—are unlikely within the next two years given that President Donald Trump campaigned on not changing Medicare, Scully said. The biggest Medicare policy change he anticipates is an effort to reform the way that the program pays for dual-eligible frail, elderly beneficiaries through capitated models.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, April 06, 2017