Fwd: qotd: Private Medicare Advantage insurers are scamming the nation again

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: Private Medicare Advantage insurers are scamming the
nation again
Date: Tue, 8 Apr 2014 11:45:07 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



(Unless you are a masochist, skip down to the comment at the end. The
following excerpts from the CMS documents are merely to provide
verification for the statements in the comment.)


CMS
April 7, 2014
CMS Ensures Higher Value and Quality for Medicare Health and Drug Plans

Today, the Centers for Medicare & Medicaid Services (CMS) issued the
2015 rate announcement and final call letter for Medicare Advantage and
prescription drug benefit (Part D) programs.

Payments to Medicare Advantage Plans:

* CMS estimates that the overall net change to plan payments between
2014 and 2015 to be +0.4 percent, compared to the estimated overall net
change to plan payments of -1.9 percent for the proposals in the Advance
Notice Individual plan payments will vary by plan based on, but not
limited to, its location and star rating.

* Before the Affordable Care Act, Medicare Advantage plans were paid
more than 10 percent compared to traditional Medicare, costing the
program more than $1,000 per person each year, while quality and health
outcomes were similar to those enrolled in traditional Medicare. The
changes underway reduce excessive payments to Medicare Advantage plans,
while incentivizing quality improvements by basing part of Medicare
Advantage payment on plan quality performance.

* To provide for continued stability in the Medicare Advantage program,
CMS will implement a new phase-in schedule for the Part C risk
adjustment model introduced in 2014. In addition, to improve payment
accuracy, CMS has refined its risk adjustment methodology to account for
the impact of the influx of baby boomers. In addition, for 2015, CMS
will not finalize the proposal to exclude diagnoses from enrollee risk
assessments.

http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2014-Press-releases-items/2014-04-07.html

****

CMS
April 7, 2014
Announcement of Calendar Year (CY) 2015 Medicare Advantage Capitation
Rates and Medicare Advantage and Part D Payment Policies and Final Call
Letter

Key Changes from the Advance Notice:

Growth Percentages
CMS-HCC Risk Adjustment Models for CY2015
Medicare Advantage Enrollee Risk Assessments
Normalization Factors
RxHCC Risk Adjustment Model
International Classification of Diseases-10 (ICD-10) Code Sets and
Diagnosis Data Sources for 2015 Risk Scores:

Attachment III

Section A. Final Estimate of the National Per Capita Growth Percentage
and the Fee-for- Service (FFS) Growth Percentage for Calendar Year 2015

Comment: Several commenters had concerns about the magnitude of changes
proposed in the Advance Notice and the potential impact to Medicare
beneficiaries and plans. Commenters raised concerns that the payment
reductions described in the Advance Notice would lead to significantly
higher MA premiums, significantly reduced benefits, or both. Some
commenters argued that these cuts would lead to MA plans exiting the
market. Some providers noted that the reductions to MA contained in the
Advance Notice would seriously threaten their ability to provide high
quality care to beneficiaries. We also received comments that the cuts
would lead to market contraction, less competition, and ultimately less
access for beneficiaries. Commenters requested that we keep Medicare
Advantage revenue flat for 2015.

Response: We are committed to a strong, stable Medicare Advantage
program and to continued access to high quality plan choices for
Medicare beneficiaries. Over the past several years, even as the
Medicare Advantage program transitioned to payments that are more
aligned with FFS Medicare costs, enrollment in Medicare Advantage has
increased to an all-time high of approximately 15 million beneficiaries.
Today, nearly 30 percent of Medicare beneficiaries are enrolled in a
Medicare Advantage plan and benefits remain stable. We believe that the
proposals outlined in the Advance Notice will continue the transition to
payments that are more comparable to FFS costs, while at the same time
continuing the trend toward greater enrollment in high quality plans.

Section G. CMS-HCC (Hierarchical Condition Category) Risk Adjustment
Model for CY 2015

Comment: We received a few comments opposing our proposal to use a blend
of the 2013 CMS-HCC model and 2014 CMS-HCC model in 2015, and supporting
instead calculating risk scores using exclusively the 2013 CMS-HCC
model. Many commenters were in support of continuing to use a blend of
risk scores from two different models. Two commenters were in favor of
ending the phase-in of the clinically revised model introduced in 2014
and calculating risk scores in 2015 using only this model.

Response: As we remain committed to the clinically revised model
introduced for the 2014 payment year, we will not use risk scores
exclusively from the 2013 CMS-HCC model as recommended by some
commenters. Because we still believe that additional time to transition
to the 2014 model is needed, we also will not use risk scores from the
2014 model exclusively as recommended by two commenters, and will
continue for 2015 payment year to blend the risk scores calculated using
the 2013 CMS-HCC and 2014 CMS-HCC models.

In light of the impact of the final payment updates and changes for
2015, however, we are concerned that the use of the 2014 blend
percentages of 75% and 25% that we proposed to continue in the Advance
Notice would not have the same effects on payment stability that they
had last year, and that we assumed they would have when proposing them
this year. As in 2014, we will continue to blend the risk scores from
the old and new models, in order to both support our intention to move
to the updated model while also providing time for plans to transition
to its use in payment. Thus, to further our goal of promoting stability
and given concerns about the impact of payment changes for 2015, we will
blend the two scores using a 67 percent and 33 percent blend,
respectively. Specifically, we will blend the risk scores calculated
using the 2014 CMS-HCC model with risk scores using the 2013 CMS-HCC
model, each appropriately normalized, weighting the normalized risk
scores from the 2013 model by 67 percent and the normalized risk scores
from the 2014 model by 33 percent. These risk scores from the 2013 and
2014 CMS-HCC models will include the risk scores calculated from the
community, institutional, new enrollee, and C-SNP new enrollee segments
of the model and will be used in Part C payment for aged/disabled
beneficiaries enrolled in MA plans. See Section II.G of the 2014 Advance
Notice and Section III.D of the 2014 Rate Announcement for more details
on the clinically revised CMS-HCC model.

Section H. Medicare Advantage Enrollee Risk Assessments

Comment: Many commenters opposed the proposal to exclude diagnoses that
resulted from home visits, including enrollee risk assessments, unless
there was a subsequent clinical encounter.

Response: CMS continues to support the use of enrollee risk assessments
for wellness, care coordination, and disease prevention; however, we
remain concerned that many home visits are being used primarily for the
gathering of diagnoses for payment rather than to provide treatment
and/or follow-up care to beneficiaries. We recently instituted a new
requirement for MA organizations to identify, in the diagnoses they
submit to CMS, which diagnoses are from home visits. These new data will
enable CMS, for the first time, to evaluate how many diagnoses are
identified in home visits and to assess what effect the home assessments
have on the care provided to beneficiaries. In order to allow our policy
to be informed by this analysis, we have decided not to implement the
proposal to exclude diagnoses from home visits for 2015 payments. We
will study the data submitted by MA organizations to determine
appropriate policy options for consideration for 2016 and future years.

Section J. Normalization Factors

Comment: The majority of commenters supported CMS' proposal to calculate
the normalization factors for the CMS-HCC and RxHCC risk scores using a
methodology to better capture the increased proportion of younger
beneficiaries known as the "baby boomers." Several commenters
recommended that CMS make retroactive adjustments to the normalization
factors.

Response: We appreciate the support for modifying the normalization
factor methodology to account for the influx of baby boomers to the
Medicare population. CMS uses historical data to develop normalization
factors prior to a payment year in order to promote stability for
bidding purposes. Given this policy, CMS will not retroactively change
the normalization factors for prior years. However, we did consider
whether using more historical data could better inform the calculation
of the 2015 normalization factors (in the Advance Notice we proposed
using 2012 and 2013 risk scores to estimate annual trends for the
CMS-HCC models). By using a quadratic functional form fit to risk scores
from 2010 through 2013, the normalization factors will better reflect
more recent changes in the population trends. Thus, we are finalizing
the 2015 normalization factors for the CMS-HCC and RxHCC models as shown
in Table III-2:

Excerpts from Table III-2 2015 Normalization Factors:

0.992 CMS-HCC model implemented in 2013
0.978 Clinically revised CMS-HCC model implemented in 2014

Comment: A number of commenters asked for more transparency around the
calculation of the normalization factors.

Response: In Table III-3. below, we show the risk scores used to
calculate the normalization factors for 2015.

Excerpts from Table III-3. 2010-2013 Risk Scores Used to Calculate 2015
Normalization Factors

CMS-HCC model implemented in 2013
2010 0.986
2011 0.977
2012 1.009
2013 1.008

Clinically revised CMS-HCC model implemented in 2014
2010 0.978
2011 0.988
2012 0.997
2013 0.995

To access this 154 page announcement, at the following link select
"Announcements and Documents" from the left column, and then select
""2015 Announcement" with a release date of "2014-04-07":
http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/

****

Quote of the Day
April 3, 2014
Washington insiders crossing the line in defense of Medicare Advantage

The Affordable Care Act included provisions to reduce these overpayments
to levels comparable to the costs of patients in the traditional
Medicare program. AHIP has already used its influence to convince the
administration to use chicanery to reduce the cutbacks in the first two
years of the reductions (by issuing phony quality awards and by using
accounting gimmickry with the scheduled but deferred SGR adjustments).
Since the administration seems to be resisting further chicanery (we'll
soon find out) AHIP has intensified its public campaign using some of
Washington's "finest."

http://www.pnhp.org/news/2014/april/washington-insiders-crossing-the-line-in-defense-of-medicare-advantage

****


Comment by Don McCanne

In an effort to privatize Medicare, conservatives in Congress enacted
legislation to provide private Medicare Advantage plans with a 14
percent overpayment in order to unfairly compete with the traditional
Medicare program. The Affordable Care Act included measures to gradually
eliminate this overpayment. CMS appears to be thwarting the intent of
Congress to coronet this injustice.

Because of pressure from the insurance industry, the Obama
administration used chicanery in the first two years of the ACA
implementation to maintain higher Medicare Advantage rates. This year
the reduction was to have been 1.9 percent. So the insurance industry
initiated an intensive campaign to reverse these reductions. Once again,
CMS has used more chicanery to convert their reduction into a 0.4
percent gain - reassuring private insurers that they can continue to
expand their private takeover of Medicare.

There are numerous gimmicks that were used, and some of them are quite
obscure. For instance, perhaps the most important revision was in the
"normalization factors." Because of the influx of baby boomers into the
Medicare program, it was decided to use "a quadratic functional form fit
to risk scores from 2010 through 2013" in the CMS Hierarchical Condition
Category. To provide "transparency around the calculation of the
normalization factors," they showed "the risk scores used to calculate
the normalization factors for 2015." Glad that's clear.

Seriously, CMS has used innovative accounting to increase payments to
Medicare Advantage plans based on the fact that there is an influx of
baby boomers - a subset of Medicare beneficiaries that is younger,
healthier, and less expensive than the older beneficiaries already
enrolled. Taxpayers will pay more for lower cost beneficiaries. I
remember the quadratic equation, but I don't remember it ever being used
to cheat taxpayers and reward the private insurer rentiers.

Rentiers? Those are individuals whose income is derived from capital,
and now our nation's capital is being concentrated in the top centile.
If you missed yesterday's Quote of the Day on Thomas Piketty's
"CAPITAL," you should not bother reading the CMS song and dance above,
and instead read yesterday's message.

Congress and the Obama administration are serving the interests of the
rentiers, and this Medicare Advantage payment scam is only one example.
It is time for the people to take control. As Thomas Piketty wrote, "if
we are to regain control of capitalism, we must bet everything on
democracy."

qotd: Thomas Piketty - "CAPITAL in the Twenty-First Century"
http://www.pnhp.org/news/2014/april/thomas-piketty-capital-in-the-twenty-first-century