CMA Comments on “Promoting Healthcare Choice and Competition Across the United States”

January 25, 2018

Via Electronic Submission: CompetitionRFI@hhs,gov

U.S. Department of Health and Human Services
Office of the Assistant Secretary for Planning and Evaluation
200 Independence Avenue S.W.
Washington, DC 20201

Re: Promoting Healthcare Choice and Competition Across the United States

The Center for Medicare Advocacy (Center) is pleased to provide the Office of the Assistant Secretary for Planning and Evaluation general comments on the RFI, Promoting Healthcare Choice and Competition Across the United States. The Center, founded in 1986, is a national, non-partisan law organization that works to ensure fair access to Medicare and quality healthcare. At the Center, we provide education and advocacy on behalf of older people and people with disabilities to help secure fair access to necessary health care. We draw upon our direct experience with thousands of individuals to help educate policy makers about how their decisions affect the lives of real people. Additionally, we provide legal representation to ensure that people receive the health care benefits for which they are eligible, and for the quality health care they need.

Below we offer general comments, followed by specific comments corresponding to questions posed in the RFI.

General Comments

Method of Solicitation of Feedback

We express disappointment and concern with the way the Department of Health and Human Services (HHS) chose to release this Request for Information (RFI). In particular, we are concerned the decision to label it “informal”— and therefore forego publication in the Federal Register— could limit public awareness of the RFI, skew the responses, and suppress important feedback from critical stakeholders. We strongly urge all federal agencies to be transparent regarding opportunities for public comment and active in promoting such opportunities, in order to gather broad feedback from stakeholders and the general public.

This RFI presents a broad set of questions regarding the promotion of health care choice and competition, including how existing regulations and policies may hinder these goals. The RFI states that, in part, HHS is requesting this information in furtherance of the Administration’s efforts to “encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.”

We agree with the goal of letting people with Medicare and other health care consumers make free, open, informed choices about the care they receive and coverage they obtain. We note that for a market to be “free”, though, it must ensure that clear, complete information is available to consumers. This RFI notes that “improv[ing] access to and the quality of information that Americans need to make informed healthcare decisions, including data about healthcare prices and outcomes” is a necessary component of any attempt to improve choice and competition. We agree that people with Medicare and other health care consumers must be given all the information, tools, assistance, guidance, and protection from unscrupulous actors they need in order to make the best choices for their particular, unique, circumstances.

Implement the Affordable Care Act (ACA)

As noted above, we understand the Department’s stated objectives are to “lower barriers to entry and improve access to and the quality of information that Americans need to make informed healthcare decisions.” These objectives will not be accomplished, however, unless the Affordable Care Act (ACA) is fully implemented. The ACA is the law of the land, and HHS is legally obligated to implement the law as we stated in our comments to the HHS draft 2018-2022 Strategic Plan. 

Throughout 2017 we called on the Administration to stop undermining the ACA and protect the care of millions of consumers in need of quality coverage. We highlighted the Administration’s actions, including: cutting the ACA enrollment period in half; slashing funding for enrollment assistance; refusing to participate in enrollment events; shutting down www.healthcare.gov during critical times; refusing to pay cost-sharing reductions; and issuing an Executive Order allowing the sale of inadequate insurance plans.

We have serious concerns about the proposed expansion of Association Health Plans (AHPS) mentioned in the RFI. These plans could weaken the ACA’s guaranteed consumer protections, raise costs and destabilize the market. Under the recently released HHS proposed rule, AHPs could be treated like large employer plans, which don’t have to play by the same ACA coverage rules as the individual or small group markets. 

The American people deserve access to affordable, quality health coverage. We are concerned that the RFI describes ACA insurance as “expensive” and “mandate laden.” Such negative language is further evidence of the Administration’s goal to let the ACA fail. This type of executive undermining of the ACA has taken a toll. Even though 2017 ACA enrollment exceeded many expectations, the actual number of uninsured people in America has grown steadily in the last year. Nearly 3.5 million Americans have become uninsured since the end of 2016, according to a new Gallup report, with coverage loss greatest among Latinos, African Americans and young people. This is unacceptable.  

We oppose any endeavor to weaken ACA essential health benefits (EHBs) requirements. The ACA requires insurers to cover essential health benefits such as ambulatory services, emergency services, hospitalization, maternity care, mental health and substance abuse, prescription drugs, rehabilitative services, laboratory services, preventive and wellness services, and pediatric services. These benefits are critical for the health and well-being of millions of consumers, including people who are older or have disabilities.

In previous comments we stated that the EHB requirement has helped ensure people have access to basic health care services and has closed health care coverage gaps that for decades had left individuals underinsured. Before the ACA, consumers often did not have health coverage for services that are now covered as EHBs. For example, prior to the ACA, one in five people enrolled in the individual market lacked coverage of prescription drugs and mental health coverage was often excluded from health plans.[1] Also, 75% of non-group market plans did not cover maternity care (delivery/inpatient care), and 45% did not cover inpatient/outpatient substance use disorder services.[2] These services can be a small percentage of the relative benefit costs in commercial market plans, yet scaling back on their coverage would significantly raise out-of-pocket costs for individuals who need them.[3] Any attempt to weaken these essential benefits through regulation and deny people care is unacceptable and must be rejected.

Enhance and Protect the Well-Being of All Americans

The RFI rightfully recognizes that “HHS is the Federal government’s principal agency charged with protecting the health of all Americans and providing essential human services.” In carrying out these duties we encourage HHS to undertake activities to identify and address health disparities with the ultimate goal of eliminating them. The programs HHS administers must be unbiased, based on research, evidence, and medical and health-related facts, and must be responsive to individual patient and consumer needs and wishes. Services should be offered to all in accordance with their personal beliefs and convictions. In activities spanning the Office for Civil Rights, Office of Minority Health, Office of Women’s Health, the Centers for Medicare & Medicaid Services and the Administration for Community Living, all of HHS must ensure that disparities are not heightened but are prevented.

Medicare

As the Center stated in our comments to a recent CMS RFI, while we recognize CMS’ stated intention to maintain benefit flexibility and efficiency throughout the Medicare Advantage and Part D programs, we stress that CMS’ focus should not be on rolling back regulations, reducing oversight or minimizing plan sponsor burdens.[4]  We anticipate that many plan sponsors will vigorously push for reduction in regulations and oversight – we think granting such requests would be a dangerous path to tread.  Rather, we urge CMS to focus squarely on ensuring Part C and D enrollees (and the broader Medicare population) have access to and receive timely, quality health care.  CMS needs to ensure that MA and Part D plans provide what taxpayers are paying for; ultimately, both beneficiaries and taxpayer dollars must be safeguarded.

1. What State or Federal laws, regulations, or policies (including Medicare, Medicaid, and other sources of payment) reduce or restrict competition and choice in healthcare markets?

Navigating the Medicare program, including coverage options, covered services and cost-sharing can be confusing or even overwhelming, especially when a person has chronic illness, limited resources, or a lack of assistance. The complexity in choosing among traditional Medicare, Medicare Advantage (MA), Part D, and supplemental or “Medigap” options is often overwhelming to Medicare beneficiaries and their families. Yet, we expect people with Medicare to make informed, savvy choices—in other words, to “vote with their feet”—so that, in theory, competition can reward plan innovations that work, identify bad actors and problematic behaviors, and reduce both beneficiary and program costs. Studies show, however, that older adults struggle to compare plans[5] and often do not change MA or Part D plans even when doing so may lead to lower premiums and reduced cost-sharing.[6]   More broadly, there exists a large body of research and analysis that explores the challenges consumers currently face in making choices about their health insurance coverage, including when there are a multitude of plan options, with little to no standardization.^[7]  To put it simply—people with Medicare are overwhelmed with information, but it may not be the information they need to make informed choices.

As CMS considers making MA plan options and choices exponentially more complex by, among other things, loosening uniformity of benefit requirements and eliminating meaningful difference rules, as contemplated by the recent proposed Part C and D rule, Medicare beneficiaries are faced with even more difficulty in comparing options.[8]  The absence of quality, useful information becomes increasingly harmful to beneficiaries. We oppose policies that will shift additional costs to people with Medicare, penalize them for failing to make optimum choices, or otherwise transfer additional burdens onto their shoulders. Such changes are exacerbated by the insufficiency of existing resources to assist individuals with complex choices.

Currently the only meaningful tool to explore Medicare coverage options is Plan Finder. While Plan Finder allows head-to-head comparisons of prescription drug plans, its utility is limited as it does not allow a beneficiary to search across plans for particular providers.  Additionally, there is no adequately-resourced tool to fill the gaps. The vital State Health Insurance Assistance (SHIP) program, which offers one-on-one personalized assistance,[9] is woefully underfunded, faces challenges meeting current demands, and is constantly under threat of being defunded.[10] 1-800- MEDICARE, while a needed resource, is no substitute for in-depth and in-person assistance often provided by SHIPs.  Rather than increase the complexity of coverage options, we urge the Administration to invest in adequate tools and resources for beneficiaries to effectively evaluate and compare their options.

We also note that as plan offerings become more complex, the Administration’s responsibility to oversee plans becomes even more pronounced, yet this oversight role appears to be getting less emphasis in HHS and CMS notices and publications. As the regulatory agency overseeing administration of Medicare, CMS is duty bound to protect both Medicare beneficiaries and public funds rather than reducing the burden on plans, providers, manufacturers, etc. 

2. What State or Federal laws, regulations, or policies (including Medicare, Medicaid, and other sources of payment) may promote or encourage anticompetitive behavior in healthcare markets?

CMS must advance policies that encourage people with Medicare to make active and informed choices about the coverage option(s) that are right for them, selecting among traditional Medicare, Medicare Advantage plans (including integrated Medicare-Medicaid options), supplemental Medigap policies, and stand-alone Part D prescription drug plans. A free and competitive market should serve the wants and needs of the consumer, not place a thumb on the scale that would push people with Medicare toward specific options.

In addition, these issues work against people with Medicare making high-quality choices that reflect their actual needs and desires:

• Cumbersome and opaque appeals processes;
• Lack of sufficient oversight of plan sponsors;
• Stringent eligibility criteria for and underutilization of low-income assistance programs;
• Star ratings that do not reflect plan quality; and
• Proposals to increase complexity (as discussed above).

3. What State or Federal grants or other funding mechanisms (including Medicare, Medicaid, and other sources of payment) reduce or restrict competition and choice in healthcare markets?

As discussed above, recent and pronounced emphasis by CMS on the Medicare Advantage program, in addition to rules that promote MA availability and enrollment over that of Medigap,[11] create an uneven playing field between choices about how to access Medicare benefits. We are troubled by what appears to be deliberate downplaying, or even failure to mention, the availability of traditional Medicare in some CMS publications, including during the most recent annual election period.[12] Such steering can have negative impacts on Medicare beneficiaries’ access to services, including MA plans’ restrictive and sometimes inferior networks of providers.  For example, although private insurers advertise MA plans as providing enrollees with greater flexibility at lower cost, a recent Health Affairs study indicates that MA network limitations may impede access to high-quality skilled nursing facility care.[13]  Such steering or favoring of MA interferes with traditional Medicare and Medigap’s ability to compete fairly. The ability to choose traditional Medicare, with or without a supplemental Medigap plan, must be preserved and promoted equally with MA.

4. What State or Federal grants or other funding mechanisms (including Medicare, Medicaid, and other sources of payment) may promote or encourage anticompetitive behavior in healthcare markets?

Medicare should always pay a fair price for quality service. We believe it is in the best interest of both taxpayers and people with Medicare to fairly and efficiently reimburse for care provided by MA plans. Indeed, among the initial justifications of allowing private health plans to participate in Medicare was the promise of achieving higher quality outcomes at lower costs.  

We urge both Congress and the Administration to direct more attention to protecting public funds by ensuring that payment to Medicare Advantage (MA) plans is accurate and equitable.  While the Affordable Care Act made strides in reining in overpayment to MA plans – at one point averaging 114% of what traditional Medicare would spend on a given individual – MA plans still receive inflated payments resulting from “upcoding” practices. 

MA upcoding – when an MA plan inappropriately reports an enrollee as being more sick than he or she actually is in order to obtain a higher risk-adjusted payment from the Medicare program – remains an ongoing problem that policymakers must address.

Various studies have attempted to document the scale of inappropriate MA coding intensity, or upcoding, and the resultant overcharges by MA plans.  An investigation by the Center for Public Integrity, for example, found that Medicare paid MA plans nearly $70 billion in “improper” payments, mostly from upcoding, from 2008 through 2013 alone.[14]  More recently, a study published in Health Affairs found that coding intensity practices could result in overpayments to MA plans totaling $200 billion over the next decade.[15]

In April 2016, the General Accounting Office (GAO) issued a report entitled “Medicare Advantage: Fundamental Improvements Needed in CMS’s Effort to Recover Substantial Amounts of Improper Payments.”[16]  The report states that CMS estimates that about 9.5% of its annual payments to Medicare Advantage (MA) organizations were improper – totaling $14.1 billion in 2013 alone – “primarily stemming from unsupported diagnoses submitted by MA organizations.”  The report also highlights the significant flaws in CMS’ current efforts to address and recoup such payments, including execution of the Risk Adjustment Data Validation (RADV) audit process.

According to MedPAC, in its March 2017 report to Congress, “after accounting for all coding adjustments, payments to MA plans were about 4 percent higher than Medicare payments would have been if MA enrollees had been treated in [traditional] Medicare.”[17]

The Center is deeply concerned by these ongoing improper payments to MA plans and the lack of progress in recouping previous payments and deterring future misconduct.  If, as the RFI states, HHS is concerned that “Medicare spending is projected to grow at a somewhat more rapid rate, placing greater pressure on the Federal budget” then tacking the low-hanging fruit of MA upcoding should be a priority.  In order to ensure that the traditional Medicare program is not further disadvantaged by inappropriate overpayments to MA plans, Congress and CMS must employ more rigorous oversight of MA payment.

At a time when many MA plans are still collecting inappropriate, inflated payment due to upcoding, and there is a growing body of evidence that MA plans might not serve sicker beneficiaries as well as healthier people,^[18] CMS should not cater to plan requests to reduce “burden” but should instead redouble efforts to ensure that MA plan enrollees, and the broader Medicare population, are being well served by the Medicare program.

Similar to CMS’ over-emphasis on MA enrollment, discussed in the section above, improper and inflated payment to MA plans interferes with traditional Medicare and Medigap’s ability to compete fairly. The ability to choose traditional Medicare, with or without a supplemental Medigap plan, must be preserved and promoted equally with MA.

5. What suggestions do you have for policies or other solutions (including those pertaining to Medicare, Medicaid, and other sources of payment) to promote the development and operation of a more competitive healthcare system that provides high quality care at affordable prices for the American people?

People with Medicare would benefit from changes within the program that would increase their ability to make informed choices, get the care they want and need, and hold plans accountable for failing to meet their obligations.

Our ongoing suggestions to strengthen educational tools and beneficiary supports, include the following:[19]

• Strengthen State Health Insurance Assistance Programs (SHIPs) – SHIP counselors are essential to helping people with Medicare make informed, individualized choices about how to receive coverage and care, and offer increasingly critical services that cannot be supplied by 1-800 MEDICARE or through web-based and written materials. Rather than cut funding for the SHIP network, as has been proposed by this administration, we urge greater investment in this vital, cost-effective program.  
• Improve Notices: we encourage CMS to continue to develop model notices in consultation with numerous stakeholders, including consumer advocates.  Where CMS does not require MA and Part D plans to use model notices, plans should be encouraged to test notices and to report on such testing to CMS.  We encourage greater coordination between CMS, the Social Security Administration and other relevant federal and state agencies to ensure smoother transitions in health coverage and access to assistance programs.  Additionally, CMS should improve communications with individuals with limited proficiency in English. 
• Promote Active and Informed Plan Choice: CMS should advance policies that encourage people with Medicare to make active and informed choices about the coverage option(s) that are right for them, selecting among Traditional Medicare, Medicare Advantage plans (including integrated Medicare-Medicaid options), supplemental Medigap policies, and stand-alone Part D prescription drug plans.  Such improvements should include: 
  • An individualized MA and Part D Annual Notice of Change (ANOC) to better serve beneficiary needs, specifically one that details which specific providers or pharmacists are leaving a plan network, which specific prescription drugs are no longer on the plan formulary, and where utilization management tools will be newly applied (ideally, reflecting an individual’s actual providers, pharmacists, services, and prescription drugs);
  • Revitalize the Medicare Plan Finder – incorporate a searchable MA provider directory in Plan Finder that includes both individual practitioners and hospitals. Clearer information on cost-sharing and coverage for MA supplemental benefits, like dental and vision care, is also needed. Further, CMS should add information on Medigap options to Plan Finder to allow beneficiaries to fully assess the coverage choices available to them.  Engage in a transparent, multi-stakeholder process to solicit input on needed Plan Finder improvements and how best to redesign this important consumer tool.
  • Standardize MA Plan Benefit Packages –we continue to point out that many people struggle to select among several MA plans and multiple, complex plan variables.  To encourage efficient plan selection, distinctions among plans must be made more meaningful. We strongly support CMS’ ongoing efforts to eliminate plans that are too much like other plans offered by the same insurer, and we encourage the agency to continue in this manner. At the same time, CMS should consider standardizing MA benefit packages, like the rubric required for supplemental Medigap plans (i.e., Plan A, Plan B, Plan C), to encourage “apples-to-apples” comparisons among plan options.  Confusion surrounding Medigap policies – both concerning benefits offered and value for premiums paid – significantly diminished when Medigap plans were standardized.   Medicare beneficiaries shopping for and comparing MA plans would similarly benefit from being able to compare standardized MA benefit packages between and among plan sponsors.

In comments to HHS and CMS, the Center has also outlined suggestions to strengthen and preserve essential consumer protections in the MA program, including:

• Access to providers –  We applaud CMS’ recent efforts to address MA network adequacy by planning to review such networks on three-year cycles rather than only when a company applies for or renews their status in the program, along with conducting intermediate full network reviews under certain circumstances.  We also appreciate steps CMS has taken to address inaccurate MA provider directories.  Given that one of the most important health care considerations for an individual is the ability to choose one’s doctor(s) and other health care providers, and that, by design, MA plans generally contract with a limited network of providers to care for their enrollees, much more needs to be done in order to ensure that plan enrollees have meaningful access to, and information about, network providers.  We urge CMS to implement the remaining recommendations outlined in the General Accounting Office (GAO) 2015 report on MA network adequacy, including expanding the definition of network adequacy, verifying provider information submitted by plans and setting minimum information requirements for plan enrollee notification letters.[20]  In addition, CMS must do more to address the issue of provider network terminations and their impact on beneficiaries.  Absent prohibiting mid-year provider network terminations without cause, which we advocate for, CMS should improve advance notice given to beneficiaries and expand the current limited special enrollment period (SEP) right applicable to certain affected individuals. 
• Increase plan sponsor oversight – as noted in our comments to the RFI, we strongly believe that robust consumer-oriented regulations, ongoing monitoring and evaluation, and a reliance on transparent processes to guide any proposed changes to administrative policies are integral to the ongoing participation of private plans in the administration of the Medicare Advantage and Part D programs.  Such effort should include enhanced audit capacity and increased transparency on enforcement actions, and further alignment between plan Star Ratings and enforcement actions.

Conversely, as noted in our comments to the recent proposed Part C and D rule,[21] we are opposed to efforts that would make MA benefits and plan selection more complex.  Similarly, as noted in our comments to CMS’ Request for Information on Innovation Center New Direction,[22] we have significant concerns about models that explore easing private physician contracting rules in Medicare as well as those rolling back regulations, reducing oversight or minimizing MA plan sponsor burdens.

Conclusion

We appreciate the opportunity to submit these comments. For additional information, please contact David Lipschutz, Senior Policy Attorney (licensed in CA and CT), at dlipschutz@medicareadvocacy.org, or 202-293-5760.