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CMS Proposes to Raise Net Payment Rates for Medicare Advantage Plans – On February 19, 2016, CMS proposed to raise net payment rates for Medicare Advantage plans by 1.35 percent for 2017. That would translate to a 3.55 percent increase in revenue for MA plans next year once risk coding tendencies are accounted for, according to a CMS release. CMS will accept comments on its proposed 2017 MA changes until March 4, 2016, and will publish its final rate announcement on April 4, 2016. The proposal is available here.
MA enrollment has soared since the passage of the Affordable Care Act, reaching an all-time high of 17.1 million beneficiaries in 2016. MA beneficiaries account for nearly 32 percent of all Medicare enrollees, making the 2017 proposed rate increases an important development for insurers looking to expand their revenue base. In 2015, MA plans received about $170 billion. Those expenditures amounted to an average payment of $754 per month per member to MA plans.
In addition to the rate hikes, CMS proposed changes to its risk assessment model. The model calculates scores for patients based on their health status in a base year to predict health care costs for the following year. CMS pays more to MA plans for members with higher scores because the higher score indicates a sicker beneficiary. In an effort to make these scores more accurate, CMS proposed creating six separate model segments to replace the current single community segments. Those segments would take into account whether a beneficiary is dually eligible because CMS noted that on average, dual-eligible beneficiaries cost more. The model also would take into consideration the beneficiary’s age, disability, and whether he/she is on full or partial benefits.
CMS also proposed adjusting how it calculates an MA plan’s star rating, which determines whether that plan is eligible for Quality Bonus Payments. An MA plan’s star rating is meant to measure the effectiveness of a plan’s care for an enrollee. This portion of CMS’s proposal would take into account whether an MA plan’s enrollees receive a low-income subsidy, are dually eligible, or have disabilities to more accurately reflect a plan’s true performance.
Reporter, R.J. Cooper, Sacramento, + 1 916 321 4809, rcooper@kslaw.com.
CMS Announces Collaborative Core Quality Measures – CMS, in a collaboration with American’s Health Insurance Plans (AHIP), announced on February 16, 2016, seven sets of “core measures” to align quality measures required for physician reporting. These core measures, available here, align the quality measures across public and private payers.
CMS states that more measures will be added in the future, and the current measures will be updated over time. Health insurers and physicians have long been calling for CMS to align the quality standards because it is difficult for plans to implement different sets of standards, and doctors have been faced with too many redundant and conflicting quality measures. Aligning the quality standards will allow the physicians to focus on improving care delivery.
CMS worked with AHIP, commercial payers, the National Quality Forum, national physician organizations, employers and consumers to come up with core quality measures. The initial core measures are in the following seven sets:
- Accountable Care Organizations (ACOs), Patient Centered Medical Homes (PCMH), and Primary Care
- Cardiology
- Gastroenterology
- HIV and Hepatitis C
- Medical Oncology
- Obstetrics and Gynecology
- Orthopedics
CMS designed the core measures to be meaningful to patients, consumers, and physicians. According to CMS, “reducing burden on providers and focusing quality improvement on key areas across payers, quality of care can be improved for patients more effectively and efficiently.” Private payers are expected to use a phased-in approach to implementing the core measures. They will be incorporated as contracts with physicians come up for renewal.
CMS says that the announcement “marks a major step forward for alignment of quality measures between public and private payers and provides a framework upon which future efforts can be based.”
Reporter, Scott Cameron, Sacramento, CA, +1 916 321 4807, scameron@kslaw.com
Congressional Budget Office Issues Cost Estimate Report on Medicare Appeals Reform Act – On February 16, 2016, the Congressional Budget Office (CBO) issued a cost estimate report on the Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act of 2015 (S. 2368). The purpose of the Act is to address the severe backlog of Medicare appeals and to improve the appeals process. The CBO estimates that the Act will increase direct spending under the Medicare program by approximately $1.7 billion over 2016 to 2026.
The Act would address the Medicare appeals process in several ways, such as by:
- Mandating the creation of Medicare magistrates to handle simple claims appeals that are now handled by Administrative Law Judges;
- Instituting an expedited appeals process;
- Establishing alternative dispute resolution processes;
- Modifying the operations of Recovery Audit Contractors (RACs); and
- Allowing the consolidation of multiple appeals cases related to similar issues or individuals.
In addition to the increase in direct spending, CBO estimates the amount of discretionary spending (i.e., spending subject to annual appropriations) to implement the Act is estimated to be approximately $35 million over that same period. Part of that cost would be the creation of an Internet portal through which providers could monitor the status of claims in the appeals process, and the establishment of an ombudsman position to assist providers, suppliers, and Medicare contractors in resolving complaints and inquiries.
The CBO report is available here.
Reporter, Jennifer S. Lewin, Atlanta, + 1 404 572 3569, jlewin@kslaw.com.
ALSO IN THE NEWS:
King & Spalding to Host Roundtable Addressing Bad Behavior By Leased Network Payers After UFCW v. Sutter Health – On Wednesday, February 24, 2016, King & Spalding will host a webinar regarding the implications of the California Court of Appeals decision in UFCW & Employers Benefit Trust v. Sutter Health, which held that the rights and obligations of a provider as against a leased network payer are not governed by the underlying contract between the provider and the contracting agent. A significant amount of provider revenue comes from leased network payers, so this decision has left providers scratching their heads as to how they can obtain the benefit of the bargain they struck when they agreed to accept discounted payments from leased network payers. This webinar will focus on strategies that revenue cycle departments can employ to identify ways that leased network payers have “misbehaved” by failing to adhere to the terms of agreements between the providers and contracting agents. The webinar will also explore contracting strategies to prevent such misbehavior. To register, please click here.
You’re Invited! 25th Annual Health Law & Policy Forum – King and Spalding’s 25th annual Health Law & Policy Forum will take place in Atlanta on March 21, 2016 at the St. Regis Hotel in Buckhead. We are pleased to present keynote speaker Bob Woodward of The Washington Post to share his insights on the politics affecting national health policy. To view the program topics and register, please click here.
Save the Date: King & Spalding Reception at HCCA Compliance Institute – Please join Sara Kay Wheeler, President of the Health Care Compliance Association (HCCA), and the King & Spalding team at a reception during the 20th annual HCCA Compliance Institute. The reception will be held at the Aria Café in Las Vegas on Monday April 18, 2016 from 5:00 to 8:00 pm.