Medicare Panel Weighs Standard Benefits for Managed Care Plans

A congressional advisory panel is exploring whether Medicare’s popular managed care plans should be required to offer a standard set of core benefits. But an industry trade group opposes that prospect and instead wants to “standardize” and improve the way the federal government presents plan offerings to consumers.

The Medicare Payment Advisory Commission says standardizing some services offered by Medicare Advantage plans—and the costs that enrollees pay for them—could ease confusion for beneficiaries who now choose from an average of 39 different MA plans, all with varied premiums, provider networks, covered drugs, and other characteristics.

Along with making comparison shopping easier and more transparent, greater uniformity in Medicare Advantage plan offerings would also bring the program more in line with standardized coverage requirements for Medigap and ACA marketplace insurers.

The commission’s work on standardizing Medicare Advantage benefits follows lawmakers’ and regulators’ recent efforts to scrutinize and strengthen the fast-growing MA program, which now covers more than 30 million of Medicare’s 64.9 million beneficiaries. The Centers for Medicare & Medicaid Services expects MA enrollment to approach 32 million in 2023.

The Better Medicare Alliance, which advocates for MA plans, shares the commission’s “interest in delivering more simplicity and less confusion when it comes to health coverage choices,” said a statement from Mary Beth Donahue, the group’s president and CEO. But the group has “concerns, however, that standardization of cost sharing or benefits themselves could stifle innovation and decrease competition.”

Instead of more transparent coverage standards, the BMA wants the Biden administration to standardize the format and language used to describe current plan offerings on the Medicare Plan Finder, the federal government’s online directory of MA plans. They also want the CMS to require plans to include more information about their supplemental benefits on the site.

“Beneficiaries may struggle to compare supplemental benefit offerings because of the variance” in how they’re described on the site, Donahue wrote in a December letter to CMS officials. Disclosing additional information “will highlight the variety of benefits offered in Medicare Advantage, which can be unclear given the current limitations in the Medicare Plan Finder,” the letter added.

A CMS spokesman said the agency has worked to make it easier for beneficiaries to navigate the site and compare and select plans.

Uniformity Standards Relaxed by Trump CMS

Both BMA proposals have merit, said David Lipschutz, associate director of the Center for Medicare Advocacy. But they don’t negate the need to clarify and standardize MA plan benefits, he said.

During the Trump administration, the CMS relaxed uniformity standards that once required MA plans to offer the same benefits at the same cost-sharing for all enrollees in a plan’s service area, Lipschutz said. The agency also weakened “meaningful difference” rules that required MA plans to make their offerings distinguishable from one another, Lipschutz added. And Congress contributed to beneficiaries’ confusion by allowing MA plans to make supplemental benefits available to some, but not all beneficiaries, Lipschutz said.

“The processes for offering and selecting private Medicare plans should not be designed for the savviest consumer, as is now the case; rather, there must be standard, baseline means of plan comparison,” the CMA wrote in a 2020 memo to the incoming Biden administration.

Along with covering the full Medicare “Part A and Part B” hospitalization and outpatient benefits package, MA plans can also offer extra supplemental benefits that traditional Medicare doesn’t cover. These benefits, financed by plan rebates and premiums, can include in-home support services; dental, vision and hearing services; meals; transportation; and gym memberships.

But because the plans aren’t required to submit encounter data on the use of supplemental benefits, “we do not know how much plans spend on each type of supplemental benefit, what share of enrollees use those benefits, and whether service use differs by factors such as age, sex, race, disability status, and geographic area,” said Eric Rollins, a commission principal policy analyst, at the panel’s November meeting.

The CMS will require greater reporting of MA plans’ spending for supplemental benefits next year, but “its usefulness will be somewhat limited,” Rollins said, because the 2023 data will be at the contract level, rather than the plan level, and won’t be available until 2025.

The commission will likely include an informational chapter on the pros and cons of standardizing some MA plan benefits in its June 2023 annual report to Congress. But the report won’t contain a formal recommendation to lawmakers on the proposal.

Panel a Long Way From Recommendations

“We are a long way, both substantively and temporally from getting to where we’re going to make recommendations,” MedPAC Chair Michael Chernew said at the commission’s September meeting. “So we are at the beginning in getting a general sense of how you feel about all this and how you feel we should be going.”

The advisory commission provides Congress with analysis and policy advice on the Medicare program. Its recommendations are nonbinding, but Congress relies on commissioners’ expertise when making funding decisions.

Unlike traditional Medicare, which pays caregivers for each medical service they provide, MA plans receive a flat monthly payment for each beneficiary based on their health risk factors. The sicker the patient, the higher the payment.

But lawmakers, providers, and a government watchdog agency raised concerns that MA plans were using “prior authorization,” or required plan approvals, to improperly deny care that fee-for-service Medicare typically covers.

In response, the House in September passed H.R. 3173, which would require MA plans to establish an electronic prior authorization process with faster and more standardized decisions for routinely requested items and services. A companion bill in the Senate, S. 3018, has 52 co-sponsors.

Recently, the CMS issued a proposed a rule (RIN 0938-AU96) to require prior authorization approvals by MA plans to remain valid for a beneficiary’s full course of treatment. It would also require MA plan coverage determinations to be reviewed by professionals with relevant expertise, the CMS said in a statement.