Editor’s Note: This comment letter 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. The comment was submitted to the Centers for Medicare and Medicaid Services on August 31, 2022.
Loren Adler, Matthew Fiedler, Richard G. Frank, and Marta E. Wosinska submitted a comment letter responding to a recent request for information (RFI) related to the Medicare Advantage (MA) program issued by the Centers for Medicare and Medicaid Services (CMS).
The authors applaud CMS’ interest in improving the MA program, which now serves around half of all Medicare beneficiaries. The letter addresses seven specific issues raised by the RFI:
- Improving risk adjustment accuracy to ensure appropriate plan payments;
- Using risk adjustment to advance health equity;
- Advancing equity by better coordinating care for older adults in HUD affordable housing;
- Improving quality by increasing MA plan accountability for behavioral health care;
- Improving transparency and competition by more accurately displaying MA plan premiums;
- Enhancing understanding of vertical integration between MA plans and providers; and
- Using direct measures of patient access to assess network adequacy.
The letter also emphasizes that, while improving MA is more important than ever, it is essential that CMS also continue its efforts to improve traditional Medicare (TM). TM still enrolls around half of Medicare beneficiaries, and TM is likely to attract considerable enrollment for the foreseeable future. Moreover, TM’s performance has major implications for the MA program. Payments to MA plans are directly based on TM spending, and competition from TM likely plays an important role in disciplining both MA plans’ bids and the prices that MA plans pay providers. While some of the needed changes to TM (such as adding an out-of-pocket limit for beneficiaries or modernizing its benefit design in other ways) would likely require legislation, CMS has a variety of tools it could use to encourage more efficient care delivery in TM, including expanding use of alternative payment models, improving the design of those models, and making targeted use of utilization management tools in TM.
Read the full comment letter here.