When administered properly, private health plans can oversee patient care effectively and discourage unnecessary use of services. However, because private plans receive the same level of reimbursement regardless of the number of services they provide, participating providers may have incentives to deliver less care than needed. To protect enrollees, safeguards must be in place to ensure that a plan’s cost controls do not adversely affect access to, or the quality of, enrollee care and that Medicare resources are used properly.
Between January 1 and February 14 of each year, MA enrollees may switch to traditional Medicare and elect a Medicare prescription drug plan. This brief disenrollment period is in addition to the annual election period each fall when beneficiaries may change plans. (See this chapter’s section Health Care Coverage: Private Insurance—Medicare Supplement Insurance (Medigap) for discussion about returning to traditional Medicare and Medigap.)
MA enrollees also have the right to an independent review of plan decisions, including an expedited appeal within 72 hours of asserting that their condition requires rapid review. CMS can terminate a private plan’s Medicare contract or impose intermediate sanctions, including monetary penalties, when circumstances warrant.
All Medicare beneficiaries—including those in MA plans—need assurances that the program has strong quality-of-care standards and other consumer protections in place.
MA plans are required to cover all services covered by traditional Medicare Parts A and B, with the exception of hospice care. However, MA plans may not cover the cost of services that they determine not to be medically necessary under Medicare. Beneficiaries can ask the MA plan for a written advance coverage decision to make sure that it will be covered. If a beneficiary needs a service that the plan says isn’t medically necessary, the beneficiary may have to pay all of the costs of the service, but has the right to appeal the plan’s decision.
Medicare Advantage: Standards: Policy
All participating health plans in the Medicare program must be initially certified as having met the federal standards designated by CMS and must be subject to federal oversight to ensure ongoing compliance with the standards.
All participating health plans must be financially sound. Financial standards should contain solvency requirements, including for capital reserves, that take into account the plan’s level of risk and service-delivery capabilities and that are set at adequate levels to protect beneficiaries in the event of a plan’s insolvency.
AARP supports health plans’ use of drug formularies and preferred drug lists as they can be an effective cost-containment and quality-enhancement tool. However, in providing drug benefits, health plans using drug formularies and preferred drug lists should:
- ensure participation of plan physicians and clinical pharmacists in the development of formularies and preferred drug lists;
- publicly disclose the nature of formulary and preferred drug list restrictions and utilization management policies;
- allow the use of nonformulary drugs or those not on the preferred drug list when they are medically necessary, and ensure that plan members are aware of how such alternatives can be obtained;
- provide any prescription drugs that are exceptions to the health plan formulary and preferred drug list to enrollees who require such drugs, under the same terms and conditions (including cost-sharing requirements) as drugs in the formulary; and
- subject disagreements between an enrollee and a health plan about prescription drug coverage to the plan’s internal complaint process and external appeals process.
In the event of an emergency, enrollees in MA plans with networks should not be required to obtain care through the plan’s network of providers.
“Emergency care” must be defined using the “prudent layperson standard”—that is, coverage for emergency care should include the provision of services where the enrollee presents to a provider outside the health plan with symptoms, including severe pain, that a prudent layperson would reasonably believe to be an emergency medical condition.
Health plans should be contacted to determine follow-up treatment once MA enrollees who present to emergency departments are stabilized, and the plan should be prepared to assume the care of the patient.
Patients should be covered for all necessary care in connection with the emergency. Health plans should be prohibited from requiring prior authorization for emergency services. The special needs of people with mental illness and substance abuse should be taken into account when coverage decisions are made concerning emergency services or urgently needed care.
Health plans should be required to provide standardized information to prospective and new enrollees, including:
- information on benefits, limitations, exclusions, restrictions on use of services, and plan ownership;
- a summary of physicians’ financial incentive arrangements, written in terms that an average beneficiary will understand;
- the stability and composition of the provider-and-practitioner network, including a list of the participating physicians and hospitals with their credentials and licensing data;
- information about whether practitioners are accepting new patients;
- comprehensive information on patients’ experience with care in the plan and the plan’s clinical performance (as measured by the Consumer Assessment of Healthcare Providers and Systems and the Healthcare Effectiveness Data and Information Set, respectively), and the performance of participating physicians, hospitals, skilled-nursing facilities, home health agencies, and pharmacies;
- whether and at what level the plan is accredited by a national organization whose standards have been deemed acceptable by CMS;
- disenrollment rates from the plan, including reasons for leaving the plan;
- data on grievances and appeals filed by beneficiaries; and
- disclosure of any sanctions imposed by CMS or any other regulatory body due to a plan’s failure to comply with statutory and regulatory requirements.
Federal authorities must approve all marketing materials before their use. Materials must be written at a sixth-grade reading level or lower, must be available in languages other than English when the plan serves or will serve substantial numbers of enrollees (more than 5 percent) whose native language is not English, and must be culturally appropriate for the enrolled population. Marketing presentations implying that a beneficiary’s failure to enroll will result in the loss of Medicare entitlement must be prohibited. Other prohibited marketing activities should include door-to-door solicitation, offering beneficiaries inducements to enroll, and discriminatory activities designed to recruit healthier-than-average enrollees.
To avoid discriminating against population groups based on their place of residence, plans should serve a complete market area.
Enrollment practices and procedures
All enrollment in Medicare private health plans should be conducted by a CMS third-party contractor. No health plan should be permitted to enroll beneficiaries directly.
All health plans, including fee-for-service, MA, and Medigap insurers, should be required to participate in an annual, coordinated open-enrollment period during which plans must accept all eligible applicants without regard to their health status, previous claims experience, medical history, or lack of evidence of insurability, to the extent the plan capacity will allow (as determined by CMS).
The federal government should improve oversight of, and greater transparency about, “seamless enrollment” arrangements approved by CMS. These arrangements allow insurers to automatically enroll individuals from Medicaid managed care and private plans into the same insurer’s MA plan once those individuals reach Medicare eligibility. CMS should limit approval of such enrollment arrangements only into the highest performing MA plans. The federal government should provide consumers affected by these arrangements with clear notice about the existence and implications of the arrangement, and ensure that consumers have effective ability to opt out.
The federal government should ensure that implementation of seamless enrollment arrangements does not interfere with consumers’ right to choose traditional Medicare coverage and access to Medigap coverage during their initial open enrollment period.
Medicare beneficiaries enrolled in private health plans should have the opportunity to disenroll at any time—effective the first day of the following month either for cause or not for cause, and to change their enrollment to the Medicare fee-for-service program.
Medigap carriers should be required to sell insurance coverage to any beneficiary who applies for supplemental coverage after disenrolling from an MA plan.
Rates and payments
Premiums charged by health plans participating in the Medicare program must be community-rated for the Medicare population. Payments to plans should be risk-adjusted so that payment reflects the risk undertaken by the plan on behalf of the beneficiaries enrolled.
Current Medicare balance-billing limitations should apply to all Medicare-covered services provided to Medicare beneficiaries for care in and out of the network.
Health plans must be able to demonstrate that appropriate and necessary services are reasonably available and accessible 24 hours a day, 7 days a week. Health plans must have sufficient numbers of practitioners, providers, and facilities, with sufficient distribution of providers by specialty and location within the plan’s service area to serve enrolled members. The adequacy of a network should be assessed in relation to the health plan’s model type, the prevailing patterns of provider distribution in the plan’s geographic service area, and the needs of the plan’s enrollees.
Women should have direct access to obstetricians and gynecologists and should be allowed to designate them as their primary care providers.
Health plans should be required to refer beneficiaries to specialists affiliated with the plan or to recognized specialty-care centers affiliated with the plan pursuant to treatment plans. Referrals should include provisions for standing referrals, as determined by the referring practitioner in consultation with the health plan. Health plans should be required to provide out-of-network referrals at no additional cost to the enrollee if the plan does not have a network physician with appropriate training and experience, or has no affiliation with a recognized specialty-care center that can meet an enrollee’s covered medical needs. Patients with mental disorders should receive appropriate referrals to mental health specialists.
Continuity of care
CMS should prohibit health plans from altering their provider networks during the enrollee lock-in period. However, in the event a plan does terminate providers during this period, enrollees whose physicians have been terminated without cause should be given adequate time to find a new provider. When a plan’s mid-year provider terminations are substantial, CMS should provide enrollees with a Special Enrollment Period during which they can select another MA plan or return to traditional Medicare.
Providers should be given adequate notice of mid-year no-cause terminations. Also, to facilitate continuity of care, health plans must notify affected enrollees at least 90 days before the termination of a provider, as long as the termination is not for cause. When termination is for cause, affected enrollees should be notified as soon as possible of the departure of their provider and should be given information about how to obtain a new provider.
Enrollees who are undergoing an active course of treatment for a life-threatening disease or condition, or for a degenerative and disabling disease or condition, or who have entered the second trimester of pregnancy at the effective date of enrollment, should be able to receive covered medically necessary care from their physician specialists for up to 90 days (or through postpartum). This should apply to enrollees if their employer drops a plan that includes the patient’s treating physician specialist and to existing enrollees if their previous physician specialist is terminated by the health plan for reasons other than cause.
Health plans should facilitate the coordination of care and the transition to new providers. In addition, private health plans should be encouraged to coordinate their services with long-term care services and supports, particularly for people with chronic conditions.
Quality improvement and performance assessment
All MA plans must demonstrate adequate performance in geriatrics and other aspects of care, as measured by their scores on valid and reliable quality indicators. These indicators should address a range of services, including preventive care and care for chronic illness, and should assess care coordination (including coordination across care settings) and other issues.
In addition, MA plans should routinely assess the performance of their practitioner and institutional contractors, and make this information available to participating providers and enrollees. Quality measures should be evidence-based and, wherever possible, should measure outcomes of care or processes that have a known relationship to outcomes.
All private health plans participating in the Medicare program should be engaged in ongoing quality-improvement programs. They should participate in quality-improvement activities with Medicare QIOs, as required by CMS, or with other QIOs.
Utilization review/ utilization management (UR/UM)
Written clinical review criteria must be developed with the involvement of health plan practitioners and must be made available to plan practitioners and enrollees.
UR/UM plans must be designed to detect underutilization as well as overutilization. Adverse UR decisions must be made by clinically qualified personnel and reviewed by active practitioners in the same or a similar specialty. Reviewing clinicians need not be residents of the state in which the enrollee whose claim is being reviewed resides. Reviewers must not receive financial compensation based directly or indirectly on the number or volume of certification denials.
Certification decisions must be made at least as rapidly as the beneficiary’s medical situation requires in order to protect his or her health and permit a meaningful appeal. Denials must be accompanied by clear information on the reasons for denial as well as instructions on how to appeal the denial.
Grievances and appeals
Health plans should have a system for receiving beneficiaries’ grievances about furnished services for which the beneficiary has no further liability for payment, e.g., physician behavior, waiting times, and quality of care.
Health plans also should have an appeals process to address disputes that involve the denial, termination, or reduction of services or payment.
Grievance and appeals procedures should include provisions in the following areas:
- Information—when a requested service or payment is denied, or when needed care is reduced or terminated, beneficiaries must receive timely, clear information about such decisions; a list of the specific reasons for the decision; and a description of the right to appeal and the procedure for doing so. Information must include the medical criteria that were relied upon and the process followed by the plan in reaching its decision. The methods of communicating information about the denial and appeals process must meet the specific needs of an older population, taking into account vision or reading difficulties and differences in language and culture.
- Independent review—beneficiaries must have the right to have their claims reviewed by independent entities that are not appointed or selected by the health plan. Such a process should include an external review of medical necessity by medically qualified reviewers of plan decisions, followed by a hearing before an administrative law judge and access to the federal courts. There should be no charge to the enrollee for gaining access to such independent review or for the review itself.
- Fairness—plans must give adequate advance notice before terminating or reducing any services that a beneficiary is already receiving, with specific reasons for the termination or reduction as well as clear instructions on how to appeal the decision. Ongoing services, particularly hospital inpatient services and skilled-nursing or rehabilitation services, should be covered until the reconsideration is complete. The beneficiary should not be responsible for the costs of the appeals process, including the cost of external medical review. The appeals process must include an opportunity for the beneficiary to attend the review in person, testify, submit evidence, and call and question witnesses.
- Timeliness—appeals of a service denial, termination, or reduction must have specific time limits that reflect beneficiaries’ medical needs. Expedited review must be available in cases where the regular time limits would jeopardize the beneficiary’s life, health, or ability to regain or retain maximum function. In addition, fast-track appeals should be available for those enrollees requesting immediate review of a plan’s decision to discharge them from a skilled-nursing facility, comprehensive outpatient rehabilitation facility, or home health agency. Such cases should be resolved as rapidly as the situation requires, never exceeding a specified maximum amount of time. A plan’s failure to meet specified deadlines or provide necessary information should result in automatic approval of both expedited and regular appeals.
Health plans should collect and report data on grievances and appeals in standardized formats.
Private health plan liability
All private health care plans should be held accountable for their actions. In cases where a health plan has been involved in a decision to delay or deny needed health care services, and the decision has had medical consequences, the plan should be liable for any injuries or harm an enrollee may sustain.
The right to seek meaningful judicial redress for decisions that contributed to injury or death should be available to all MA enrollees regardless of the source of their health care coverage. In cases where state laws on the corporate practice of medicine prevent holding managed care organizations accountable for harm caused by inappropriate treatment decisions, those laws should be revised to afford the injured enrollee access to state court.
Coverage for experimental services
Health plans should have an objective and expeditious process for considering experimental treatments, including new drugs, devices, procedures, and therapies.
Health plans should be required to participate in an external, independent review of coverage denials, to be conducted by a panel of experts selected by an impartial, independent, and accredited entity.
Coverage for care in clinical trials
Enrollees in private health plans should have appropriate access to, information about, and protections within clinical trials. Private health plans should cover routine patient care costs (e.g., hospital services, physician services, and diagnostic tests) associated with plan enrollees’ participation in clinical trials that are:
- funded by the National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), AHRQ, CMS, the Department of Defense (DOD), or the Department of Veterans Affairs (VA);
- supported by centers or cooperative groups funded by CMS or the NIH, CDC, AHRQ, or DOD; or
- sponsored by the VA and conducted under an investigational new drug (IND) application reviewed by the Food and Drug Administration (FDA), exempt from needing an IND application under FDA regulations, or deemed by CMS to meet the qualifying criteria developed by the appropriate multiagency federal panel.
These services should be covered even if the provider participating in the clinical trial is not part of the managed care organization’s network. However, the following services related to clinical trials need not be covered by the managed care organization: the investigational item or service itself, and items and services provided solely to satisfy data collection needs or provided by the trial sponsor without charge.
Each practitioner must be credentialed before participating in a health plan and recredentialed every two years.
The medical director or other plan representative authorized to act on the plan’s behalf must be responsible for the credentialing process.
There must be a credentialing committee, with representation of plan practitioners.
Credentialing information must be subject to review and correction by the practitioner being credentialed.
Information about the credentialing process and policies must be available for review by providers and enrollees upon request. Information on practitioner credentials must be available to plan enrollees.
The plan must obtain primary verification of current license, malpractice coverage, hospital privileges, board certification (if any), Drug Enforcement Administration certificate, medical degree, and residency training, as well as secondary verification of license, malpractice, and National Practitioner Data Bank history.
The plan also must conduct an on-site office visit and review of medical record-keeping practices. For recredentialing, in addition to all the procedures required for initial credentialing, the plan must review member complaints, results of quality assurance and utilization review activities, and member-reported experiences of care.
Provider and practitioner contracting
Plans should be required to provide services through contracts with providers and practitioners. If a health plan denies a physician’s application to participate, terminates its agreement with the physician, or suspends its contract with the physician, the plan should provide the physician with a written explanation for the action and afford the physician the right to appeal.
Contracts should encourage open communication between providers and enrollees concerning all treatment options as well as other issues concerning patients’ health care. Each contract should clearly identify the services to be provided and include provisions that:
- hold enrollees harmless for payment for covered services, in the event of nonpayment by the health plan;
- require continuation of covered services to enrollees throughout the period for which a premium has been paid, regardless of the health plan’s insolvency or nonpayment;
- prohibit collection of any payments (other than required cost-sharing) from enrollees for covered services provided by the practitioner or as a result of the practitioner’s authorized referral;
- prohibit balance billing;
- require the practitioner to participate in and cooperate with quality assurance and utilization review activities of the health plan and of federal agencies conducting external quality reviews;
- prohibit any physician incentive plan that directly or indirectly bases payment on the reduction or withholding of medically necessary services to enrollees;
- require medical records to be maintained in an appropriate manner;
- require providers or practitioners to report specified data; and
- require the practitioner or provider’s office or facility to be subject to inspection by the plan.
AARP supports efforts to improve integration of hospice care for beneficiaries enrolled in MA plans. Under the current structure, hospice services for MA enrollees are covered through the traditional Medicare Part A program. Beneficiaries in MA plans and their family caregivers should receive clear information about how hospice care will be covered in order to minimize confusion.
If proposals for MA plans to cover the hospice benefit directly are considered, such proposals should ensure that the hospice benefit continue to remain a person- and family-centered approach that provides quality end-of-life care to beneficiaries as well as services and support for their families. Such proposals would be best undertaken in a broad, multi-year demonstration.
Any such proposal should be exhaustively examined to ensure that:
- the hospice benefit received by those enrolled in MA is the same or better compared with the benefit covered by traditional Medicare;
- MA plans cover the full scope of the Medicare hospice benefit;
- no additional cost-sharing should be permitted beyond what is allowed under traditional Medicare;
- beneficiaries and their families are not adversely impacted; and
- quality metrics and payment incentives are designed to encourage appropriate levels of access, beneficiary choice, and positive care experiences for beneficiaries and family caregivers.
Private health plans must prevent improper use or release of personally identifiable medical information. They must adopt appropriate protections and procedures in the event the confidentiality of personal health information is breached to ensure the security of all data and personal health information, including electronic information. (See this chapter’s section Reforming the Delivery of Health Care Services—Privacy and Confidentiality of Health Information.)
Data collection and reporting
All health plans serving Medicare beneficiaries must collect and report comparable, independently audited data that will demonstrate compliance with national standards.
Health plans must collect and report:
- medical costs or expenditures on a per capita basis by type of expenditure (physician, inpatient, outpatient, home health, skilled-nursing facility, etc.);
- plan administration costs;
- complaints and grievances as well as their resolution;
- physician satisfaction;
- health care quality as assessed by performance on standardized measures including the performance of participating physicians, hospitals, skilled-nursing facilities, home health agencies, and pharmacies, and beneficiaries’ experience with care;
- utilization management or appeals regarding the use of out-of-plan services;
- accessibility, and the number of practitioners accepting new patients;
- rates of physician turnover;
- enrollment and disenrollment rates; and
- data on race, ethnicity, and language preference.
Enforcement of standards
CMS should monitor the activities of all private health plans participating in the Medicare program to ensure compliance with all requirements. In the event that CMS detects violations, the agency must enforce the requirements in a timely manner through use of intermediate sanctions or contract termination, as appropriate.