Medicare Advantage: Payments

Background

The Affordable Care Act modified how Medicare AdvantageMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. ( MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. ) plans are paid. This brought MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. payments more in line with Traditional MedicareTraditional Medicare, also known as Original or Fee-For-Service Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any Medicare-covered service it… . It also provided plans with financial incentives to improve quality and efficiency and made other changes to ensure that MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans were neither being underpaid nor overpaid.

Affordable Care Act ( ACAThe ACA—the shortened abbreviation for the Patient Protection and Affordable Care Act— is comprehensive health care reform legislation enacted by Congress and signed into law on March 23, 2010. ) benchmarks in all counties were fully phased in by 2017. Counties in the highest-spending quartile have benchmarks of 95 percent of county spending in Traditional MedicareTraditional Medicare, also known as Original or Fee-For-Service Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any Medicare-covered service it… . Intermediate-quartile counties receive 100 percent and 107.5 percent, respectively. And the lowest-spending quartile has benchmarks of 115 percent of county spending in Traditional MedicareTraditional Medicare, also known as Original or Fee-For-Service Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any Medicare-covered service it… .

Under the ACAThe ACA—the shortened abbreviation for the Patient Protection and Affordable Care Act— is comprehensive health care reform legislation enacted by Congress and signed into law on March 23, 2010. , the Centers for MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). & MedicaidA joint federal/state program that provides health care and LTSS. However, to qualify for Medicaid LTSS, people must have extremely low assets and income, or they have to “spend down” most of their assets. Services (CMS) also pays bonuses to plans that provide high-quality care, as determined by a 5-star rating system established by CMS. Qualifying MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans located in certain locations (generally low-payment urban areas) are eligible to have their bonuses doubled.

 Finally, the ACAThe ACA—the shortened abbreviation for the Patient Protection and Affordable Care Act— is comprehensive health care reform legislation enacted by Congress and signed into law on March 23, 2010. reduced the amount of funding available for beneficiary rebates, also known as “extra benefits.” Rebates enable an MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plan to offer additional benefits (i.e., those that are not part of MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). ’s basic benefit package, such as dental or vision care), lower premiums, or reduced cost-sharingThe share of insurance-covered costs that a person pays out of pocket, including deductibles, coinsurance, and copayments. It does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. . Funding for these benefits is available when a plan’s bid is lower than the applicable benchmark payment set by MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). to determine the plan’s payment. MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. rebates were linked to plan performance in 2014. A plan earning at least 4.5 stars is eligible to receive 70 percent of the difference between its bid and the benchmark payment rate. Plans with 3.5 to 4.5 stars receive a rebate of 65 percent. Plans with fewer than 3.5 stars have a rebate of 50 percent. Thus, the higher-performing plans that receive higher rebate percentages are better positioned to provide enrollees with additional benefits.

Tiered cost-sharingThe share of insurance-covered costs that a person pays out of pocket, including deductibles, coinsurance, and copayments. It does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. : In 2015, CMS clarified that it would permit tiered cost-sharingThe share of insurance-covered costs that a person pays out of pocket, including deductibles, coinsurance, and copayments. It does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. of medical benefits in MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans. Tiered cost-sharingThe share of insurance-covered costs that a person pays out of pocket, including deductibles, coinsurance, and copayments. It does not include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. applied consistently among all enrollees may cover services from primary and specialty-care physicians.

Adjustments for coding intensity: MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). pays MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans higher rates for enrollees who are sicker and require more complex care than other enrollees. Thus, MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans have a financial incentive to find and report enrollees’ conditions more intensively (“upcoding”) than physicians in Traditional MedicareTraditional Medicare, also known as Original or Fee-For-Service Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any Medicare-covered service it… . No such incentive exists in the traditional program.

A 2014 Department of Health and Human Services (HHS) study found that over ten years, the average risk score for MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans increased 16 percent to 21 percent, faster than the average fee-for-service risk score. HHS concluded that the increase appears to be related to diagnostic coding and not to differences in MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. enrollees’ health conditions. Coding intensity varies widely by MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. contract. Some code similarly to Traditional MedicareTraditional Medicare, also known as Original or Fee-For-Service Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any Medicare-covered service it… . Others code much more than the MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. average.

Differences in coding intensity between Traditional MedicareTraditional Medicare, also known as Original or Fee-For-Service Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any Medicare-covered service it… and MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. have been addressed in statutes—most recently in the American Taxpayer Relief Act of 2012—by directing CMS to adjust for coding intensity. The law sets minimum coding intensity adjustments at 4.9 percent in 2014, rising to 5.91 percent in 2018.

CMS has also made some administrative changes to the Hierarchical Condition Categories risk-adjustment model to discourage intensive coding practices. CMS could implement additional measures to recoup overpayments and clamp down on the coding intensity of MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans. Potential MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). savings from such measures could amount to as much as $140 billion over ten years.

MEDICARE ADVANTAGE—PAYMENTS: Policy

MEDICARE ADVANTAGE—PAYMENTS: Policy

Payment

MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). payments should be neutral with respect to coverage options. Congress should set the benchmarks upon which Medicare AdvantageMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. ( MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. ) plan payments are based so that they do not exceed fee-for-service costs.

Congress should periodically evaluate the impact of the MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. reimbursement methodology to ensure reasonable private health plan participation in the MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). program and appropriate MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). payments to participating plans.

To ensure that payments to MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans are set correctly and to recognize appropriate risk factors, CMS should continue to refine the methodology that adjusts MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plan payments. Payment methodologies should align payment with desired performance as determined by an assessment of quality, resource use and efficiency, and beneficiaries’ experiences.

Coding intensity adjustments

CMS should continue to examine and compare MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plan practices to find and report enrollees who are sicker and require more complex care than those in the traditional program. CMS should recoup excessive payments and make necessary adjustments to the rules and procedures applicable to condition coding.

Tiered networks within MA plans

MedicareMedicare is the federal health insurance program for people who are age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (ESRD), (permanent kidney failure requiring dialysis or a transplant). should require and publish reports based on standardized methodologies and measures to assess the quality and cost of the provider tiers in MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plans.

If an MAMedicare Advantage (MA) health plans are offered by private Medicare approved companies as an alternative to Original Medicare. Medicare pays these companies a fixed amount per enrollee per month to provide benefits for Parts A, B, and (usually) D. plan offers one or more tiered networks, it must provide beneficiaries with useful comparative information derived from these metrics on the cost and quality of each tier. Such information should be tested on a range of consumers to determine that diverse types of beneficiaries understand the information.

Quality bonuses

As established by the ACAThe ACA—the shortened abbreviation for the Patient Protection and Affordable Care Act— is comprehensive health care reform legislation enacted by Congress and signed into law on March 23, 2010. , only high-performing health plans (4 or more stars in a 5-star rating system) should be qualified for quality bonuses.