The Biden administration is attempting to push through a slew of reforms to the controversial MA program in its final months in power, though it will need the Trump administration’s buy-in to get them across the finish line. MA has grown to cover more than half of Medicare seniors, but has faced scrutiny about coverage quality and access that’s been amplified by recent reports of algorithms used for utilization management and claims reviews contributing to sky-high levels of denials.
On average, MA plans overturn 80% of claims denials on appeal — but fewer than 4% of denied claims are appealed in the first place, according to new data from the CMS.
That regulation required plans to comply with national and local coverage determinations and general coverage and benefit conditions included in traditional Medicare regulations, starting this year. Where there isn’t a Medicare coverage determination, MA plans can establish their own “internal coverage criteria” that follow clinical guidelines and are reviewed annually by a clinical committee.
Following some confusion from plans, the CMS is now defining the meaning of “internal coverage criteria” to clarify when MA plans can use utilization management, regulators said. The proposed rule also requires plans’ internal coverage policies to be clear and available to the public on their websites. Plans would also have to inform members of their appeals rights.
The rule also takes additional steps, like no longer allowing MA plans to reconsider approved authorizations for inpatient hospital admissions.
The CMS said the policies are informed by audits that regulators conducted this year that will continue into 2025. Efforts are also underway to allow the agency to collect more detailed information from plans, including their rationale for denying specific services, to give the CMS more clarity into utilization management practices today, according to a fact sheet on the rule.
When it comes to AI, the proposed rule requires MA plans to ensure all services for their beneficiaries are provided equitably, whether those services are performed by human or automated systems. And, those systems would be forbidden from discriminating based on any factor related to an enrollee’s health status.
Another concern with MA plans is rampant vertical integration that’s resulted in the largest players also operating providers, allowing them to nudge members to their own medical groups and essentially pay themselves for delivering care.
The company most in the spotlight over this issue is UnitedHealth, which is reportedly being investigated by the Department of Justice over the relationship between its health insurer and physician network.
In the proposed rule, the CMS requests information related to how vertical integration in MA and Part D could be affecting insurers’ medical loss ratios, or MLRs. MLRs measure how much in patient premiums are spent on medical care versus retained for administrative costs or profit, and are calculated by dividing the amount spent on medical claims and quality improvement by total premiums collected.
To reduce MLR gaming, the rule would also require plans to report incentive payments or any bonuses to providers in the medical expense bucket for calculating MLR. Administrative costs would be excluded from quality improvement in MLR numerators. Regulators are also proposing additional disclosures and stricter audit standards for MLR reporting.
As for marketing, the CMS said it’s denied more than 1,500 television ads for being misleading since 2023, but regulators continue to get complaints from consumers about marketing for MA plans. The rule would strengthen CMS oversight of marketing and communications by increasing the type of advertisements that are required to get approval from regulators before they can be used.
It would also require agents and brokers to discuss more topics with seniors before enrolling them in an MA plan, including their potential eligibility for subsidies in traditional Medicare.
The CMS also wants to make it easier for people on Medicare to search for providers and compare their availability across different plans, a measure Seshamani called “critical” on Tuesday.
Currently, the government’s Medicare Plan Finder website allows seniors to shop for MA and prescription drug plans based on criteria like benefits or premiums. The proposed rule would require MA plans to make their provider directories available to the CMS so that regulators can put that information into Plan Finder, giving consumers a clearer view into plan offerings.
Plans would be required to keep that information up-to-date, which could help crack down on so-called ‘ghost networks’ that make plans’ provider networks seem more robust than they really are.
The rule also seeks to put guardrails around plans’ use of debit cards to administer supplemental benefits in MA, by stipulating exactly how debit cards can be used by a plan and their members. The CMS also proposed additional disclosures and transparency, including how members can receive supplemental benefits if there are any issues with the cards and clarifying what types of products can be paid for with the cards.
The changes should help the CMS be a better steward of rebate dollars used for supplemental benefits, Seshamani said.
The rule would also ensure similar levels of cost-sharing for behavioral health in MA and traditional Medicare plans to make it easier for MA enrollees to access behavioral healthcare services.
Taken together, the proposals “may have a tangible impact on plan profitability,” wrote TD Cowen analyst Ryan Langston in a note on the rule.
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