Federal regulators are cracking down on the private insurers that administer Medicare Advantage (MA) plans. In turn, that could dampen the growth of palliative care supplemental benefits in MA moving forward.
Despite palliative care’s ability to lower health care spending and improve patient outcomes, it remains an underutilized service. That’s partly because providers are forced to offer palliative care through a patchwork of reimbursement mechanisms, one of which is the MA program.
In 2022, 147 plans offered home-based palliative care across 17 states, a 7% increase in the number of plans compared to the prior year. That growth has continued into 2023, with at least 157 plans offering home-based palliative care, according to data from Washington, D.C.-based research and consulting firm ATI Advisory.
Broadly, MA plans have been expanding supplemental benefits to include palliative care since 2018, when the U.S. Centers for Medicare & Medicaid Services (CMS) began giving plans more flexibility around the definition of “primarily health-related.” Effectively, plans had more leeway in offering benefits such as adult day health services, palliative care and in-home support services – as long as those offerings were tied to their members’ health needs.
“I think Medicare Advantage plans are very interested in palliative care,” Tyler Overstreet Cromer, principal of ATI Advisory’s Medicare Innovation Team, previously told Hospice News.
Now, increased action from CMS and scrutiny from key members of Congress could thwart that growth in 2024.
In its proposed payment rule for MA released in February, CMS floated a plan that would, according to the agency’s calculations, produce an expected average revenue change of 1.03% for MA. Medicare Advantage stakeholders immediately pushed back against the proposal, arguing it would actually turn into a cut of about 2.27%.
“Medicare Advantage enrollment has increased considerably in recent years,” Tom Kornfield, a senior consultant at Avalere Health, said at the time. “Our analysis suggests that proposed payment changes by CMS for 2024 could result in reduced benefits or higher premiums for enrollees.”
CMS did end up changing its tune when it released its final payment rule for MA at the end of March. The rule included an increase to MA payment of 3.32% for 2024. It also, however, included changes around risk-adjustment audits, which could put more pressure on plans.
While all the rulemaking has gone on, lawmakers have decried MA for seemingly being too profit-driven. Investigations have also called the practices of the nation’s largest insurers into question for potentially wrongly denying claims.
“In 2022, the seven major Medicare Advantage health care insurers – UnitedHealthcare, CVS/Aetna, Cigna, Elevance Health, Humana, Centene and Molina – brought in revenues of $1.25 trillion and reported total profits of $69.3 billion, a 287% increase in profits since 2012,” Sens. Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) wrote in a statement. “But rather than investing in benefits for patients, these seven health insurers instead spent $26.2 billion on stock buybacks.”
If plans end up feeling a financial squeeze in response to being in the spotlight, it could give them less of an ability to offer innovative supplemental benefits such as home-based palliative care.
SCAN Group CEO Dr. Sachin Jain effectively said as much during an interview with Yahoo Finance, where he spoke about CMS’ final payment rule for MA.
“I think what that ultimately represents is a pretty significant cut in payments made to insurers in the Medicare Advantage program, which is either going to force us to do more with less or potentially cut benefits for seniors,” Jain said.
SCAN Group is the parent company of SCAN Health Plan, an MA plan with hundreds of thousands of members across California, Nevada, Arizona and Texas. In December, it revealed plans to join forces with CareOregon in 2023 as a new organization called HealthRight Group.
“What I expect to see is potentially either benefit instability or, in some cases, cuts to benefits at a time when … seniors are increasingly looking to Medicare Advantage to meet their health care needs,” Jain continued.