Medicare Advantage enrollment tops 50% as regulators look to rein in practices seen as harmful to patients —and skilled nursing providers
Earlier this year, Medicare Advantage crossed a major tipping point: More than 50% of all Medicare beneficiaries are now covered by an MA plan.
While consumers continue to flock to such plans for their zero-dollar premiums and appealing supplemental benefits, skilled nursing providers may feel like their long-running complaints about the plans’ affect on care quality are finally being heard.
That’s because the Centers for Medicare & Medicaid Services in late April finalized a Medicare payment rule that aims to greatly restrict plan practices that have kept many seniors from accessing post-acute care, or at least accessing it in a timely way. Those same delay and deny tactics also have cost providers a fair chunk of their revenues as MA penetration has grown, often reducing referrals, lengths of stay and per-day payments.
As the 2024 payment rule kicked in on June 5, providers and those who study the business of healthcare were pondering what might happen as federal regulators’ new appetite for MA rule-making intersects with record beneficiary enrollment.
“Does the regulatory environment become harder and scrutiny intensify and those, in effect, put brakes on growth?” asked Fred Bentley, managing director of ATI Advisory. “I wouldn’t pretend to know. But … let’s say it gets to 55 to 60%, and … policymakers and regulators are thinking, ‘Wow, this is Medicare and they are managing the majority of Medicare beneficiaries, and we’re going to scrutinize them in a way that we haven’t.’”
That’s the hope of researchers behind a paper published May 11 in the New England Journal of Medicine. Data related to Medicare Advantage care provision and payments is largely missing, especially when compared with the rich data sets available for Medicare fee-for-service patients.
The lack of MA transparency makes it hard for providers to know what kinds of rates they might be able to negotiate. It also has been challenging for those who study healthcare quality to see if the switch to privatized Medicare plans — in which plans are incentivized to reduce costs — has harmed patient care.
“For enrollees with serious illness, who often require extensive care provided in multiple settings, the program’s cost-control mechanisms — such as coverage denials, narrow provider networks, and prior-authorization requirements — may undermine the ability to receive necessary or high-quality care,” wrote researchers from eight prominent universities and hospitals. “We believe a comprehensive approach that prioritizes improving data transparency and quality measurement is necessary to ensure that the Medicare Advantage program facilitates the delivery of high-quality and equitable care.”
‘Have to fight for it’
Traditionally, the two services most often denied by MA plans have been MRIs and nursing home stays.
That’s one reason Maureen McCarthy, president and CEO of Celtic Consulting, said skilled nursing providers must educate themselves on the new MA rule and stand up to insurers who may try to keep using underhanded tactics.
The rule, at the urging of the two biggest US nursing home advocacy groups, explicitly requires insurers to cover all services available under traditional Medicare. But McCarthy worries that they will continue to try to circumvent paying for SNF stays that beneficiaries have a right to.
“I think we’re going to have to fight for it,” she said. “We’re on their hit list. I think they’re going to go kicking and screaming at these changes.”
As of June 5, practices around coverage and length of stay also were required to comply with national coverage determinations, local coverage determinations, and the coverage and benefit conditions of traditional Medicare.
That means Insurers should no longer be able to reject payment based on their own medical determinations. Now, medical necessity and other clinical decisions are to be dictated by the patient’s provider — a nursing home’s rounding physician or medical director — rather than a plan’s case management team. Also, pre-authorizations will be allowed only when a diagnosis is unclear, which should make for easier transfers of hospital patients.
That should mean cleaner practices among some insurers, McCarthy said. For those who don’t play within the new regulations, she expects nursing homes to submit more appeals and win them.
Still, the rule’s impact on both admissions and length of stay was unclear at press time.
“I don’t think the rule will open the floodgates, but you could see incremental cases where in the past a plan would have said, ‘We’re sending them to home health,’ to ‘OK, this looks like the kind of patient for which skilled care was recommended. They meet the criteria. We’ll send them to a SNF,’” predicted Bentley. “Now, how long will they stay? The plans are still going to tightly manage length of stay.”
Negotiations remain key
MA insurers find themselves under greater pressures on several fronts these days.
In March, while awarding plans an average 3.3% raise for 2024, CMS also announced it will start recovering improper payments. The potential clawbacks, combined with rules that also limit plan marketing, could potentially slow MA growth after years of explosive expansion.
Nonetheless, the New England Journal of Medicine authors predicted the program’s projected enrollment will climb to 60% of beneficiaries by 2030. And that means skilled nursing providers need to continue getting better at negotiating, and potentially, using the current regulatory view of plans to their benefit.
“There are a couple things that SNFs need to do to get the best rates that they can,” Bentley said. “There’s the basic blocking and tackling of negotiating with plans that honestly maybe a lot of senior care companies haven’t done or have a lot of experience with.”
But insurers also have been underselling and “seeing what they can get away with,” Bentley said. “Networks that can put aside competition and negotiate as a pack through clinically integrated networks will find themselves in a stronger position.”
McCarthy said providers may even be able to use the rule to better negotiate with Medicaid managed care providers in some states, though the rule dictates plan behavior only at the federal level.
“If nothing else, there are some bumpers around this now that are going to be helpful,” McCarthy said.
As CMS pushes plans to increase access to care and equitable care, insurers could find themselves in the unexpected position of having to entice providers to take their covered beneficiaries.
Bentley recently had two clients in high-penetration markets stop talking Medicare patients because the MA rates had been driven too low.
While not everyone can afford to become a Medicaid-only building to avoid MA, the idea that some providers feel better equipped to stand up to the insurance sector speaks to an evolving environment.
CMS on the lookout
Doug Jacobs, MD, chief transformation Officer in the Center for Medicare at CMS, said in April that the agency would be watching how MA plans respond after the rule’s effective date.
“The next step is how these provisions get implemented on the ground,” he said. “It will be important for us to hear how it’s going and what we are learning.”
McCarthy said that’s a message providers should take to heart in conversations with their CMS regional offices.
“I don’t know the answer as to when CMS will be our police and fight for us, but in the meantime, we can’t wait for that because Medicare Advantage will not be forthcoming and tell us, ‘By the way, the rules changed,’” McCarthy said. “It’s going to be business as usual for them unless you come back and fight for yourself and tell them, ‘You can’t do this anymore.’ Here’s what to say: ‘I’ll report you to CMS.’ That is the one most valuable sentence you can add when dealing with managed care.”
