- Important Health Policy Article Published In New England Journal of Medicine: “Medicare Advantage Checkup"
- ACA Open Enrollment Ends December 15th
- State Attorneys General Successfully Take on Nursing Home Issues
The November 2018 New England Journal of Medicine features a article by KFF’s Tricia Neuman and Gretchen Jacobson of the Kaiser Family Foundation (KFF) that “examine[s] the extent to which Medicare Advantage plans are achieving goals with respect to benefits, out-of-pocket costs, plan choice, federal spending and quality. They also highlight areas where more evidence is needed to understand the implications of rising Medicare Advantage enrollment for beneficiaries and the future of Medicare.”
The article also notes that “the emerging role of Medicare Advantage … is gradually changing the Medicare program in ways that have important implications for beneficiaries, providers, and spending.” Differences between Medicare Advantage (MA) and traditional Medicare “present opportunities and trade-offs for the 60 million people now on Medicare.”
Key findings in the article include:
- Variation in quality of plans, lack of data, and “eye-brow raising disenrollment rates among higher-need patients appear to warrant attention and oversight.”
- MA enrollees “appear to be somewhat healthier than beneficiaries in traditional Medicare, according to measures of self-assessed health, functional status, and cognitive status;”
- While most MA enrollees “receive benefits not covered by traditional Medicare” as a result of Medicare payment policy, including rebate dollars, “[s]tudies suggest that the current rebate-based method may not be an economically efficient way of providing extra benefits to beneficiaries because plans are retaining a fairly large share of the rebate for administrative costs and profit, passing on to enrollees only 54% of the rebates, on average;”
- “Surprisingly little is known about how much Medicare Advantage enrollees pay out of pocket for the services they receive overall, across plans, according to health condition, or in comparison to beneficiaries in traditional Medicare;”
- While there is variation in the number of plans available across the country, most prominently between urban and rural areas, the average beneficiary can choose among 21 plans. However “[c]hoosing among multiple [MA] plans can be a mixed bag for beneficiaries. Seniors have said that they value having a choice among plans but feel ill-equipped to compare benefits, cost-sharing, provider networks, and other plan features.” As a result, the “large majority of [MA] enrollees stay in the same plan year after year, with just 10% switching plans every year;”
- After many years of Medicare payments to MA plans being “considerably higher,” payment to MA plans today are “roughly equal to the per capita costs in traditional Medicare (101% of those costs, on average)” but “some questions remain as to whether the current system is putting sufficient downward pressure on program spending and encouraging plan efficiency” (including incentives that promote, e.g., plan choice and extra benefits at the expense of Medicare savings);
- “Current methods that are used to compare [MA] payments with traditional Medicare costs may overstate the true costs to plans or provider Medicare benefits” for example, the current risk-adjustment system may allow MA plans to “boost[..] their payments by as much as 2% (on average) in 2018, on the basis of how they code their enrollees’ health conditions;”
- MA plans “tend to score better than traditional Medicare on some quality metrics, but the results are mixed and data are limited;” while MA plans “generally score better … on preventive services and screening measures” and “appear to use post-acute care less intensely with better outcomes … [s]omewhat counterintuitively, there seems to be no difference between Medicare and [MA] plans with respect to care coordination, receipt of needed prescriptions by beneficiaries, and adherence rates for diabetes and cholesterol medications.”
- “Little is known about the quality of care for [MA] enrollees with serious illnesses” but “[s]everal studies have flagged concerns about the quality of care received by high-need, high-cost enrollees, on the basis of disenrollment rates and other measures.”
- “Some evidence suggests Medicare Advantage enrollees are more likely than beneficiaries in traditional Medicare to be discharged to poorly rated skilled nursing facilities.”
The discussion portion of the article makes some critical observations with respect to what policymakers – and the public – may have to confront regarding the future of the Medicare program and the role of Medicare Advantage. Assuming MA enrollment continues to grow, “the Medicare of tomorrow could look much different than it does today – more like a marketplace of private plans, with a backup public plan, and less like a national insurance program.” With respect to federal financing, the authors note that “[t]he current payment environment that attracts insurers and provides extra benefits to enrollees comes as a cost to taxpayers and may reemerge as an issue down the road, when federal spending becomes a more pressing policy concern.”
As noted earlier in the article, “[w]ithout much fanfare, Medicare has evolved into a program that provides benefits that are more generous to beneficiaries in [MA] plans than to their counterparts in traditional Medicare.” To this point, the authors highlight the “equity issue that arises from providing stronger financial protections, with an out-of-pocket limit, for beneficiaries in [MA] than in traditional Medicare.”
If policymakers choose to confront “the growing role of private insurance in Medicare, and the diminishing role of traditional Medicare” they would be wise to consider many of the policy proposals raised (but not necessarily endorsed) in the article, including adding an out-of-pocket cap in traditional Medicare, standardizing MA benefits to make it easier for consumers to compare plans, making consumer support tools more user-friendly, increasing funding for Medicare counseling, reforming plan payments (including plan bonuses and rebates) and requiring additional oversight regarding quality and health outcomes, particularly with respect to sicker enrollees.
The Center for Medicare Advocacy urges policymakers to take action informed by this important article in order to preserve traditional Medicare, and serve all Medicare beneficiaries equally.
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There is not much time left to obtain health insurance from the Affordable Care Act (ACA) Marketplace during this year's Open Enrollment period. Consumers who need coverage should visit www.healthcare.gov to shop, compare and find a plan that meets their needs. Consumers should act quickly. Not only has this year’s Open Enrollment period been shortened again – it ends on December 15th – it is also reported that www.healthcare.gov will be down for maintenance from 12:00 am to 12:00 pm on Sundays, except for the last Sunday of the enrollment period. In addition, due to actions taken by the Administration to undermine the Marketplace, there is not as much assistance available to help consumers with enrollment.
A new poll from the Kaiser Family Foundation shows that a “majority of the group most directly affected by open enrollment (those 18-64 years old who either purchase their own insurance or are currently uninsured) are unaware of the current open enrollment deadlines.” This is unfortunate, but no surprise. As we have previously highlighted, the Administration made severe cuts to navigator organizations and the outreach budget that supports enrollment.
Voters could not have been clearer on November 6th – they value access to comprehensive coverage. It is time for the Administration to stop doing the bare minimum and provide real assistance to the millions of people who need quality coverage.
- See Kaiser poll: https://www.kff.org/health-reform/poll-finding/kff-health-tracking-poll-november-2018-priorities-congress-future-aca-medicaid-expansion/
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State Attorneys General are successfully litigating issues of key importance to nursing home residents, including insufficient nurse staffing levels and inappropriate transfers or discharges of residents. This Alert discusses two cases: the Pennsylvania Attorney General’s challenge to inadequate staffing levels by a national chain and the Maryland Attorney General’s challenge to a state chain’s transfer and discharge practices. Both cases confirm the broad authority of the Attorney General to file lawsuits on behalf of residents.
Overpromising and Understaffing in Pennsylvania
In July 2015, the Pennsylvania Attorney General filed a lawsuit against Golden Living nursing facilities in Pennsylvania, alleging that their marketing materials were deceptive and misleading, in violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), because they promised a level of care that the facilities could not provide due to understaffing.
The Commonwealth Court of Pennsylvania dismissed most of the complaint, holding that the facilities’ marketing materials were “puffery” or otherwise general statements of intent or optimism that residents and families could not rely on. The state Supreme Court, in a unanimous decision, reversed the lower Court’s analysis of puffery under the UTPCPL:
We hesitate to conclude that consumers seeking a nursing home would necessarily find statements promising to provide food, water, and clean linens to be hyperbolic in any respect, or to be vague statements of optimism or intent. To the contrary, for residents of nursing homes, many of whom are physically compromised and require assistance with day-to-day living activities, regular access to these items is essential, and there is no reason to think that a consumer would not take these statements seriously.
The Supreme Court held that the UTPCPL could be violated by facilities’ fraudulent or deceptive conduct that could confuse consumers, as well as by marketing materials. It also expressly confirmed the Attorney General’s “authority and standing to investigate and prosecute companies that take advantage of senior citizens and consumers by confusing or misleading them with fraudulent or deceptive conduct.”
Evictions in Maryland
In December 2016, the Maryland Attorney General sued Neiswanger Management Services, LLC, a Maryland nursing home chain, and its facilities and owner, alleging that they violated the Maryland Health Code, Patient’s Bill of Rights, and state False Claims Act by evicting residents, unsafely and unlawfully, to homeless shelters and unlicensed boarding homes, generally in order to have rooms available for Medicare beneficiaries. The State alleged that between January 1, 2015 and May 31, 2016, NMS issued involuntary discharge notices to at least 1061 residents, alleging failure to pay. During the same 17-month period, Maryland’s 225 other licensed nursing facilities issued approximately 510 involuntary discharge notices.
A Montgomery County Circuit Court judge dismissed the Maryland Health Code and Bill of Rights allegations, holding that the Attorney General lacked authority to pursue such broad injunctive relief. A unanimous Court of Appeals reversed, holding that the Injunction Clause authorizes the Attorney General to seek injunctive relief “on behalf of multiple unnamed residents who have been, or await, imminent unlawful involuntary discharges.”
On October 26, 2018, the Attorney General announced final settlement of the case. Both the chain, which had discontinued operations in February 2018, and its owner, Matthew Neiswanger, have been permanently barred “from engaging directly or indirectly in the management or operations of nursing facilities in Maryland, and from participating as providers in the Maryland Medicaid program.” In addition, they must pay the state $2.2 million and dismiss their lawsuit against the State, which they filed in March 2017.
As the Administration cuts back on federal enforcement of standards of care, state Attorneys General may play a more prominent role in protecting nursing home residents from poor care and harmful facility practices.
 Commonwealth of Pennsylvania v. Golden Gate National Senior Care, No. 336 M.D. 2015, page 25 (Cmwlth Ct, Mar. 22, 2017), http://www.pacourts.us/assets/opinions/Commonwealth/out/336MD15_3-22-17.pdf?cb=1.
 Commonwealth of Pennsylvania v. Golden Gate National Senior Care, J-35-2018 (Supreme Court of Pennsylvania, Middle District, Sep. 25, 2018), p. 19, http://www.pacourts.us/assets/opinions/Supreme/out/Majority%20Opinion%20%20AffirmedReversedRemanded%20%2010371248342342435.pdf?cb=1.
 Attorney General, “PA Supreme Court Ruling: Attorney General’s Lawsuit to Protect Seniors in Nursing Homes is Reinstated” (Press Release, Sep. 28, 2018), https://www.attorneygeneral.gov/taking-action/press-releases/pa-supreme-court-ruling-attorney-generals-lawsuit-to-protect-seniors-in-nursing-homes-is-reinstated/.
 State of Maryland v. Neiswanger Management Services, LLC, Civil Action No. 428607-V (Md. Cir. Ct., Montgomery Co., Apr. 27, 2017), https://www.courts.state.md.us/data/opinions/coa/2018/28a17.pdf.
 State of Maryland v. Neiswanger Management Services, No. 28, page 7 (Maryland Court of Appeals, Feb. 20, 2018), https://www.courts.state.md.us/data/opinions/coa/2018/28a17.pdf,
 “Attorney General Frosh Announces Settlement with Neiswanger Management Services, LLC in Resident Dumping Case” (Oct. 26, 2018), http://www.marylandattorneygeneral.gov/press/2018/102618.pdf.
 See, e.g., Toby S. Edelman, “Deregulating Nursing Homes,” Bifocal (Jan.-Feb. 2018), https://www.americanbar.org/groups/law_aging/publications/bifocal/vol–39/issue-3–february-2018-/DeregulatingNursingHomes/,
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