WASHINGTON, D.C. – The rapid growth of Medicare Advantage (MA) enrollment in recent years has created an opportunity for Congress to improve and enhance the program to better serve MA beneficiaries in years to come, especially in rural areas, witnesses told members of the Ways and Means Subcommittee on Health and Subcommittee on Oversight.
Over half of Medicare beneficiaries are enrolled in MA plans, and those individuals spend less on health care, have access to more supplemental benefits, and achieve better health outcomes than seniors on fee-for-service Medicare. The overwhelming success of the MA program has resulted in better, affordable care for millions of American seniors. The hearing examined opportunities to enhance those benefits and improve MA to continue delivering better health outcomes and lower costs for those Americans, while also ensuring fiscal and program integrity in MA so it continues delivering value for American taxpayers.
Greater Scrutiny and Transparency Needed for Popular Medicare Advantage
While MA continues to grow in use and popularity among America’s seniors, the program is ripe for a close examination to determine what reforms are needed to ensure the interests of beneficiaries as well as taxpayers are protected. As Ways and Means Committee Chairman Jason Smith (MO-08) noted in an exchange with a witness, “patient enthusiasm for the program is exactly why we should ensure its integrity.”
Chairman Smith (MO-08): “When 54 percent of Medicare beneficiaries are choosing a Medicare Advantage plan, there is clearly a strong and growing interest by seniors to have access to MA and the benefits that come with it – like lower out of pocket cost, access to supplemental benefits such as prescription drug coverage and transportation services, as well as specialized plans tailored to patients with chronic conditions. Patient enthusiasm for the program is exactly why we should ensure its integrity. For example, we know of concerns about MA plans inflating a patient’s level of sickness resulting in higher reimbursements for the plan at taxpayer expense – an estimated 40 billion in 2025 alone. Ms. Maroney, how rampant of an issue is this, and what can Congress do to help support the Trump Administration protecting this program, so treatment is given where it is needed?”
Dawn Maroney, CEO of Alignment Health Plan and President of Alignment Health: “Full transparency: Making sure that organizations if there is abuse that’s going on at an individual organizational level that that organization is being held accountable. Seniors in today’s environment utilize these programs because they are of value…There’s opportunity for us all to sit at the table and to come up with a collaborative dialogue to make sure how do we have full transparency and perfection to improve the program but not take away from the program and to make sure that the individuals that I’ve talked about that they’re still getting the value of that benefit on a monthly basis – in addition not having to pay hundreds of dollars of premiums when many individuals who are enrolled in these programs are on very fixed incomes.”
Enhancing Better Health Through Prevention and Customization of Care
More focus on prevention is key to reducing the prevalence of chronic diseases and lowering health care costs, but true prevention comes from better incentives to tailor benefits. As one witness testified in an exchange with Health Subcommittee Chairman Vern Buchanan (FL-16), the customization of care allowed for under MA affords patients and providers an opportunity to better address health challenges than is allowed under more standardized care delivery.
Health Subcommittee Chairman Buchanan (FL-16): “Doctor Miller, let me ask you, what’s your thought on prevention? What more can we do? Is our system backward? We’re reacting to the problem. It costs a lot more to react with stage 4 cancer or something than trying to prevent it in the first place. That’s just the way I look at it. The way I want to run my life is that way. Someone said the first time you have the first heart attack – if someone has a first heart attack – half of them never see the next day. I thought to myself 20 years ago, how do I prevent that to begin with? So, I get back to the whole idea of prevention.”
Dr. Brian Miller, Associate Professor of Medicine, Johns Hopkins University: “I think part of this gets around to how we can customize benefits rather than standardized benefits. We have special needs plans or SNP plans. We have I-SNPs for institutionalized beneficiaries who live in skilled nursing facilities. We have D-SNPs for dual eligibles who are eligible for Medicare and Medicaid, and then we have C-SNPs for chronic disease. CMS needs to invest some time and energy working to promote this marketplace so we can have customized health benefits to address chronic disease, to address those who are multi-morbid and live in a skilled nursing facility, and also dual eligibles. We could have specialized benefits, specialized marketing advertising regulations, and then of course customized network adequacy so that way we can get the right patient into the right health benefits package and get the right care.”
Multi-Year MA Enrollment Can Incentivize Investment in Preventive Health and Continuity of Care
MA’s one-year increments can often hold back investment in value-based care. Plans are not incentivized to invest in a beneficiary’s long-term health because plans will not see savings from those investments nor are they certain an investment made in year one will continue if the beneficiary leaves their plan the next plan year. Options like multi-year MA enrollment can provide plans incentives to invest in beneficiaries’ preventive health and seniors’ continuity of care.
Oversight Subcommittee Chairman David Schweikert (AZ-01): “Dr. Jain, your written testimony actually provided me some joy, because in many ways in there you have much of the model that we’ve been trying to move back to. We’re trying to go back to the original vision. The incentive is an organization benefits by our brothers and sisters becoming healthier. In trying to find those steps where because an enrollee, a patient, a member can stay with you longer you invest in their future health. In your vision for your organization, because you have lots of data points, Grandma gets [the device] that helps you monitor hypertension and temperature. Is there a place where the continuity of care, particularly for your rural…not telehealth but digital health in many ways is the future on helping the maintaining of latitudinal health data. Do you see that as part of your plan?”
Dr. Sachin Jain, CEO of Senior Care Action Network Health Plans: “I think it’s absolutely possible. One of the reasons value-based care has largely been a failed experiment in this country is because it can’t be practiced in one-year increments. If I don’t know that you’re going to be my patient a year from now, three years from now, or 10 years from now, I’m not necessarily going to make the rational investments in year one to improve your health in year three or year ten. I think one of the opportunities that the committee has and that Congress has more broadly is to entertain this notion of multi-year enrollment in Medicare Advantage. Multiyear enrollment would enable us to have stability of the population which would allow us to integrate these digital health solutions in year one that ultimately have failed to improve population health even though we have very sophisticated technology right now because people are underinvesting in these technologies because they don’t necessarily have the confidence that investing in year one will result in savings in year two, three, four, five, and six. If plans had a longer period, or even CMS in traditional Medicare program, had a longer-term view of cost and had a way of internalizing the savings, there would be incredible momentum towards the kind of health care system that you are imagining.”
Excessive Prior Authorization Harms Access to Care in Rural Areas
In response to a question from Rep. Michelle Fischbach (MN-07), one witness detailed how excessive prior authorization in MA can reduce patient access to skilled nursing care in rural areas and unnecessarily lengthen patients’ hospital stays, which could prevent a patient from receiving the right care at the right time while wasting rural hospital systems’ available beds and scarce resources.
Rep. Michelle Fischbach (MN-07): “I’m wondering on how prior authorization policies specifically affect rural areas, the rural discharge planning. We’ve seen data showing that MA enrollees face longer hospital stays. And I think you mentioned maybe some of that during some of your testimony, due to delays and to approve the post-acute care. Can you speak to some of these? How these delays affect patient flow and hospital capacity in your rural facilities in particular?”
Dr. David A. Basel, Vice President of Clinical Quality and Population Health Officer Avera Health: “So, the main issue here is going to be prior authorization delays for skilled nursing care. A lot of our rural areas, we actually utilize skilled nursing care a little bit higher. When you live 45 miles away from the nearest hospital, you’re more likely to send somebody to skilled facility than you are if you live two miles away from the hospital. And so those delays in getting people out of the hospital and into that convalescent mode, it affects direct patient care. A hospital is no place to rest. You know, it’s no place to regain your strength, and so getting them to that next level of care is important. So, that’s one piece that directly affects the patient. The other care is it clogs up the hospital systems, and so we’ve got beds that we can’t put another patient in, especially, you know, if it’s in our tertiary care center, they’re usually running at capacity, and we have to get one patient out before we can transfer in that patient from the rural hospital for the needed higher intensity of care. Then the cost piece of it as well. If they’re spending more days in the hospital, they’re costing us considerably more.”
Balancing Utilization Management to Ensure It Helps, Not Hurts Quality of Care
Insurers use prior authorization to ensure beneficiaries are receiving services that are medically necessary and appropriate, and it is widely used throughout the health care system to control costs and reduce unnecessary care. However, when used excessively, it can hinder access and undermine quality of care. But as a physician testified during an exchange with Rep. Rudy Yakym (IN-02), when used appropriately, there is an opportunity for prior authorization to facilitate more thoughtful consideration of what care is best.
Rep. Yakym (IN-02): “I regularly hear from health care providers in my district that they struggle with the administrative burdens associated with Medicare Advantage – in particular about prior authorizations, when a provider must receive authorization from an insurance company before service may be administered…Dr. Basel, can you talk about the impact prior authorizations have on health care providers and the seniors they seek to serve?”
Dr. David Basel, Vice President of Clinical Quality and Population Health Officer Avera Health: “It’s all about where is that sweet spot, because there is a very good case to be made for managing care. You don’t want no flood gate to be in there. Let’s say a patient comes in with abdominal pain, and I don’t think there’s any concerning symptoms. I think that they are gonna get better in a couple of days, but they are really worried, and they want a CT. If there is no care, the path of least resistance might be sure fine you can have a CT. But if there’s a little bit of prior authorization there that enables a conversation about that I just know that the payor is not going to approve this – let’s wait a couple days and see how things go, maybe start with a plain film – we actually have a better clinical outcome. We are not exposing the patient to radiation, and there’s actually better care in that situation. There is a sweet spot there, but it’s when it becomes excessive and I got a patient I am worried about that I can’t get that necessary CT for. This is not a black and white issue.”
Private Practice Is Getting “Crushed”
It is increasingly more challenging and less financially viable for physicians to go into private practice – forcing more and more health care delivery and patients into a large hospital setting. However, private sector-driven innovations available under MA coupled with other reforms could help alleviate concerns over potentially abusive referral behaviors sometimes seen in traditional fee-for-service Medicare and incentivize the proliferation of the smaller private practice health care delivery model that is likely to offer more personalized care to patients.
Rep. Greg Murphy (NC-03): “Tell me a little bit private practice-wise, Dr. Miller. I know you are not in private practice. How can private practice survive in the world of Medicare Advantage?”
Dr. Brian Miller, Associate Professor of Medicine, Johns Hopkins University: “Private practice and the opportunity for a physician to own and operate their own business and compete is getting crushed. When you finish medical school residency fellowship, you can go work for a large tax-exempt hospital corporation; you can work for a large university health system; you can work for the VA. It is hard to own and operate your own business. There are legitimate concerns about induced demand in a fee-for-service setting. Medicare Advantage is not that. We should look to empower private practice as a viable alternative to large tax-exempt hospital monopolies and have a Stark waiver in a managed care setting to Make Private Practice Great Again.”