March 10, 2016

Crapo Calls on Administration to Halt Plans to Cut Medicare Advantage

In Letter, Crapo and Others Warn of Harmful Funding Reductions

WASHINGTON - Idaho Senator Mike Crapo, a senior member of the Senate Finance Committee, today joined his Republican committee colleagues on a letter to Centers for Medicare & Medicaid Services (CMS) Acting Administration Andy Slavitt calling for the Obama Administration to halt its plans to implement policy changes that reduce funding for the Medicare Advantage program.  Several proposed policy changes would result in cuts to the program in 2017.

"In Idaho, one in three Medicare beneficiaries have chosen a private health plan through Medicare Advantage, which allows beneficiaries to choose a health plan that best suits their individual budget and health needs," said Crapo of the proposed cuts.  "Yet despite the success of Medicare Advantage for many beneficiaries, the Administration continues to use the program as a piggy-bank to offset inefficiencies in Obamacare and traditional Medicare.  These cuts undermine the long-term stability of the program not only for Idahoans, but for individuals who use Medicare Advantage across the nation."

"We are increasingly concerned about the impact of these cumulative actions on the program and the seniors who depend on it for their health care coverage needs," today's follow-up letter reads in part.  "These proposed changes have the potential to create instability in the Medicare Advantage program and undermine health plan choices that are valued by millions of Americans.  Recognizing the serious threat these proposals pose to the health coverage of Medicare Advantage enrollees, we strongly recommend that you carefully consider the impact of these changes on Medicare beneficiaries and, instead, adopt policies to strengthen Medicare Advantage."

Today's letter is a follow-up to an earlier letter, led by Crapo, to CMS about Medicare Advantage cuts.  In that previous letter, Crapo and others called on CMS to refrain from making additional harmful cuts to the Medicare Advantage program in 2017, which offers comprehensive, high-quality health care to over 17 million seniors and individuals with disabilities nationwide.  As part of the funding mechanism for Obamacare, the Medicare Advantage program faces nearly $200 billion in cuts by 2022.

The text of the letter is below and a signed copy can be found here.

Andy Slavitt
Acting Administrator
Centers for Medicare & Medicaid Services
U.S. Department of Health and Human Services
Hubert H. Humphrey Building, Room 314-G
200 Independence Avenue, SW
Washington, DC 20201

Dear Acting Administrator Slavitt:

We write to express our concerns with a number of proposed policy changes in the 2017 Advance Notice that would reduce funding for the Medicare Advantage program. We have serious concerns about the negative impact these proposals would have on the health care choices and benefits of Medicare Advantage enrollees.

The Medicare Advantage program is a valuable source of high quality, affordable health coverage for more than 17 million seniors and individuals with disabilities, including many who are dually eligible for Medicare and Medicaid and others who have complex medical needs. Many beneficiaries choose to enroll in Medicare Advantage plans because they appreciate the care coordination, disease management programs, preventive care, and other services offered by these plans.

Medicare Advantage remains popular in spite of a number of regulatory and legislative actions, including cuts included in the Patient Protection and Affordable Care Act, which have threatened to undermine the program's ability to provide seniors the care they expect. We are increasingly concerned about the impact of these cumulative actions on the program and the seniors who depend on it for their health care coverage needs. We are specifically concerned about the following three proposals.

· Employer Group Waiver Plans: Medicare Advantage retiree coverage delivers proven care coordination and disease management activities for 3.2 million retirees nationwide. The proposal to revise the payment and bidding model for Employer Group Waiver Plans would negatively impact the retiree coverage provided to beneficiaries who receive coverage through their employer.We are particularly concerned that CMS is considering moving forward with this policy administratively, even after Congresses controlled by both parties rejected this policy when it was included in the President's budget request.

· Risk Adjustment: While we appreciate efforts to improve the accuracy of the risk model for dually eligible beneficiaries, the proposed changes to the risk adjustment model could undermine plan efforts to improve beneficiary health through early detection and prevention of chronic conditions. Additionally, we would note that this is the third model update in recent years and the fifth consecutive year for changes in how the scores are calculated. Such frequent changes add unnecessary cost, complexity, and uncertainty to the program.

· Encounter Data: The proposed changes would increase the percentage of risk score calculations that are based on encounter data from 10 percent to 50 percent. This is problematic because the encounter data system currently has numerous unresolved operational and technical issues and fails to capture a reliable, comprehensive picture of beneficiary diagnoses.

These proposed changes have the potential to create instability in the Medicare Advantage program and undermine health plan choices that are valued by millions of Americans. Recognizing the serious threat these proposals pose to the health coverage of Medicare Advantage enrollees, we strongly recommend that you carefully consider the impact of these changes on Medicare beneficiaries and, instead, adopt policies to strengthen Medicare Advantage.

Thank you for considering our views on these critically important issues.

 

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