How the insurance lobby got Congress to love Medicare Advantage


This summer, some legislators and outside experts floated the idea of ​​cutting Medicare Advantage funding to help cover the cost of adding dental, vision and hearing coverage to fee-for-service health insurance as part of many’s sprawling social spending plan billion dollars from President Joe Biden.

Almost as soon as he appeared he was off the table. Industry groups have circulated millions of dollars in TV commercials warning seniors that Washington is “playing games with” their health care; and urging them to contact members and tell them “please don’t cut Medicare Advantage”.

Next, Senator Krysten Sinema (D-Arizona), whose support is crucial to pushing Biden’s “Build Back Better” package through the Senate, wrote an letter with Sen. Tim Scott (RS.C.) touting Medicare Advantage plans and promising to “protect MA from payment cuts”.

Eventually, these additional benefits – with the exception of the hearing – were removed from the bill entirely due to cost concerns expressed by moderate members such as Sinema and Sen. Joe Manchin (DW.Va.).

It is the power of the insurance industry in action. Medicare Advantage carriers have especially escaped congressional scrutiny in recent years, even as government watchdogs, Medicare experts and the Department of Justice are increasingly alarmed by the problems they see with the program.

“The outpouring of pressure from lobbyists on Congress is really huge, and it makes the Medicare benefit very difficult to change politically, even if it is money that could, if clawed back, be used for many other purposes, ”said Donald Berwick, the co-founder of the Institute for Healthcare Improvement who served as a director of the Centers for Medicare and Medicaid Services under President Barack Obama.

Medicare Advantage is a rapidly growing program created by Congress led by Republicans and Democratic President Bill Clinton under the name Medicare + Choice in 1997. The goal was to provide beneficiaries with an alternative to traditional health insurance. to the act in the hope that private insurers can limit the costs of the program.

Half of Medicare beneficiaries are expected to be in private plans by 2030. Some experts, including the Medicare Payments Advisory Board, have long questioned whether the program is value for money. for taxpayers. Despite Medicare Advantage’s “relative effectiveness”, it never spared government money, MedPAC reported in June.

Indeed, Medicare spending continues to rise as more people age on benefits, raising renewed concern about the program’s budgetary base. Medicare administrators predict that the Part A trust fund will be insolvent by 2026.

Yet Medicare Advantage plans have struggled to keep things as they are, mostly with success.

The industry frequently shakes up lawmakers with advertising and lobbying campaigns that highlight the popularity of the program among beneficiaries, in large part because the plans typically offer benefits not included in fee-for-service medicare. , including dental and vision coverage.

“They became powerful because 40% of the Medicare population is on a managed care plan,” said Mark Miller, who was executive director of the Medicare Payment Advisory Commission for 17 years and now works at Arnold Ventures. “To the extent that insurers derive a profit from it, it is money that could be used for lobbying.”

Experts Argue Medicare Advantage plans can use risk adjustment to make patients sicker than they are to collect larger payments while still benefiting from base payments – called benchmarks – that Congress has not adjusted since 2010 .

MedPAC says Congress should lower benchmarks to save money, and that this can be done without affecting plan participation or beneficiaries’ access to additional benefits if insurers accept lower benefits or become more efficient.

Plans with lower supply than the benchmark receive a discount for a portion of the difference that is used for additional benefits. These discounts represented 14% of CMS payments to Medicare Advantage plans in 2021.

In addition, the Office of the Inspector General of Health and Social Services raised concerns in September that some Medicare Advantage companies may have “inappropriately” exploited record reviews and health risk assessments to maximize risk adjustment payments.

The OIG found that 20 of 162 Medicare Advantage insurers generated a disproportionate share of the $ 9.2 billion in payments from diagnoses reported only on views of charts and health risk assessments, but not on others. files.

MedPAC has been advising Congress for several years now to crack down on “overpayments” to Medicare Advantage plans, especially with respect to coding intensity, estimating that this results in $ 6 billion in abusive payments to plans per year.

Health insurance companies counter that they are more efficient at coding than the government and that their beneficiaries are actually sicker than fee-for-service members. The industry is also challenging MedPAC’s findings.

“I don’t see that there is a bipartisan interest in making any changes to the program next year,” said Dan Jones, vice president of federal affairs for Alliance of Community Health Plans. Most Medicare Advantage plans are “good stewards of federal taxpayer dollars,” but there are a few “bad players,” he said.

Instead of oversight, dozens of lawmakers each year sign letters from the industry praising Medicare Advantage.

Seventy members of Congress representing districts where a majority of Medicare beneficiaries have Medicare Advantage plans have signed such a letter in May.

More than 400 lawmakers, or three-quarters of Congress, have signed a letter to CMS in 2020 to “express strong bipartisan support” for Medicare Advantage, but did not raise any questions about the program integrity issues that watchdogs have reported.

“Part of the problem is the lack of education. These plans are privately run, and [lawmakers] think, ‘That’s all I need to know,’ “said a congressional aide whose boss declined to sign similar letters.

Education members tend to come from groups like the Better Medicare Alliance and AHIP, insurance industry groups that lobby for Medicare Advantage carriers.

The Better Medicare Alliance, founded in 2014 and funded by insurers, raised more than $ 6 million in 2020 to defend Medicare Advantage. About a third of that went to communications, including advertising, according to the organization’s tax returns.

The alliance deployed some of its war chest this summer as Democrats in Congress considered cutting programs so they could use funds from Biden’s social spending program. Some ads specifically named senators who are key voices on the package, including Manchin and Sinema.

These types of tactics are effective, said Wendell Potter, a former Cigna executive who now advocates for healthcare reform. “Members of Congress do not want to be accused of doing anything to undermine the benefits of seniors and that is why the industry is so careful in its advertising and all that it does to make people believe that it is there is no difference between Medicare and Medicare Advantage, ”he said.

The Better Medicare Alliance also strives to gain the favor of members by appointing “Congress champions” who “stand up for Medicare Advantage”. In 2021, more than 400 lawmakers received this designation as a reward for demonstrating “extraordinary dedication” to the legislation the alliance supports.

Several of these “champions” are members of the House Ways and Means and Energy and Commerce committees, which share jurisdiction over Medicare policy.

Some are invited to speak at the group’s annual conference. Rep. Brett Guthrie (R-Ky.), The top Republican on the Energy and Trade Committee’s health subcommittee, spoke at a conference in October, calling private plans ” higher “than fee-for-service.

Representative Terri Sewell (D-Ala.), Who sits on the Ways and Means Committee, praised Medicare Advantage plans for being “more personalized, more specific” and offering “more flexibility and benefits.”

None of the issues raised by MedPAC or others were mentioned.

“They are not good stewards of taxpayer dollars ignoring this,” Potter said.

This lobbying offensive became more aggressive after the changes made by Congress in 2010 to generate health insurance savings.

Insurers then argued that these changes would hurt their businesses and negatively impact registrants, but the opposite happened: Medicare Advantage registrations increased explosively and insurers found more. means of generating revenue from the federal government.

“The industry will always say if you do something, it’s nuclear winter. But it often isn’t,” Miller said. “The industry could be more efficient and clearly should not engage in practices such as upcoding. To let this continue is bad governance.”

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