Comments On the 2023 Advance Notice On Medicare Part C and D Payment Policies

Editor’s Note: This analysis is part of the USC-Brookings Schaeffer Initiative for Health Policy, which is a partnership between Economic Studies at Brookings and the University of Southern California Schaeffer Center for Health Policy & Economics. The Initiative aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings.

Matthew Fiedler and Richard Frank commented on the 2023 Medicare Part C and D Advance Notice issued by the Centers for Medicare and Medicaid Services (CMS). The authors’ letter makes two points.

First, the authors respond to CMS’ request for comment on the effects of including socioeconomic predictor variables in the CMS-HCC risk adjustment model. They argue that including these variables would likely reduce Medicare’s payments on behalf of disadvantaged Medicare Advantage (MA) enrollees and thereby reduce MA plans’ incentive to provide high-quality coverage to these enrollees, which is likely the opposite of what CMS intends.

Second, they note that the quality measure that CMS currently uses to assess how effective MA plans are in facilitating access to care for substance use disorders (SUDs) has serious shortcomings. They recommend that CMS develop new measures that avoid these problems and, over the longer run, seek to include quality measures related to SUD care in the MA Star Rating program in order to strengthen MA plans’ financial incentives to ensure access to quality SUD care.

Read the full letter here.