medicare advantage
Tempering intensity
Medicare Payment Advisory Commission
If Medicare Advantage enrollees were instead in traditional Medicare, the government would be paying $76 billion less this year, the Medicare Payment Advisory Commission said in its official March report issued to Congress.
While that amount of overpayments has stayed above $75 billion each year since 2023, the factors behind them are shifting. “Coding intensity” — how aggressively Medicare Advantage insurers code their members’ health conditions, as a way to get paid more — is less of a factor in those overpayments now. That’s because the government has completed the three-year phase-in of a new system that pays for those diagnoses. The bigger factor now: “favorable selection,” which describes how healthier-than-average people are coming into Medicare Advantage and require less care. Read more from me about MedPAC (and how industry groups are trying to sink faith in the group).
hospitals
The sound of silence
Many hospitals (not all) have hated the idea of site-neutral payments. This wonky policy has a simple end goal: Services provided in a hospital-owned clinic and an independent physician clinic should be the same. But hospitals haven’t made much noise about a new policy that would do that in a limited way.
Starting this year, Medicare will equalize payments between hospitals and physician offices for a handful of “drug administration services” — like when patients get chemotherapy. Last year, Medicare paid hospitals $341 for a routine chemotherapy infusion (the service, not the drug) compared with $119 in physician offices. That payment difference now goes away. Medicare expects to save $290 million this year as a result, with $70 million pocketed by Medicare beneficiaries in coinsurance they no longer have to pay.
The American Hospital Association has previously sued over a separate, limited site-neutral policy. I asked AHA spokesperson Colin Milligan what the group was doing with this one over drug administration services, to which he responded: “No comment on our end.”
