regulatory

Medicare’s fall reg-a-palooza

Don Petersen/AP

You all know what time it is? The calendar nears November, basketball is back in full swing — and then the federal government vomits thousands of pages outlining Medicare’s latest payment regulations and rules for providers.

The government blessed the world with that digital dump last week, and we tried our best to provide you a quick synopsis of what’s going on:

• Hospitals: Outpatient departments and surgery centers, combined, are getting $96 billion next year, a 3% bump up from this year. One of the big policies: Hospitals will face more requirements around publishing their prices. Read more from me and my colleague Tara Bannow.
• Physicians: The final 3.4% cut to the important metric that determines Medicare’s payments to doctors is pretty much the same as what was proposed. A fix will yet again have to come from Congress.
• 340B: Medicare is moving forward with its proposal to pay hospitals $9 billion in drug discounts that were previously cut, but it will claw back $7.8 billion of that amount over 16 years, starting in 2026 instead of 2025, my colleague Rachel Cohrs reports. The hospital industry has made it clear it would sue if CMS finalized that clawback provision, so a lawsuit seems inevitable.
• Medicare Advantage: Rules covering MA plans in 2025 did not come out last week, but they will any day now.

insurance

Potent quotables for $200, Alex

A handful of big health insurers reported Q3 earnings last week, with some notable comments on the investor calls:

“We’re not as competitive as we were last year.” — Humana CEO Bruce Broussard. He said he expects Humana’s Medicare Advantage enrollment to grow between 6-8%, but because competitor MA plans didn’t really pare back benefits (despite all the screaming that it would happen), there’s going to “likely lead to fewer consumer shopping and therefore less opportunity for Humana to meaningfully outpace the industry growth rate.”

“We’re experiencing higher utilization than we anticipated. The main driver of this pressure continues to be Medicare Advantage.” — CVS Health Interim CFO Tom Cowhey. It’s now very clear seniors with MA plans continue to get more care than insurers projected. CVS also called out how MA enrollees are using their over-the-counter flex cards (which have a fixed amount of cash to use on food and other items every quarter) way more than expected.

“Our U.S. commercial business drove the favorability in the medical care ratio.” — Cigna CFO Brian Evanko. Translation: People who are covered by Cigna through their employer got less health care than expected, which boosted Cigna’s bottom line. It goes to show how different insurance companies are, and those that cover more people on Medicare are eating higher costs right now.

medicare advantage

So, what’s up with those algorithms?

Almost three dozen Democrats in Congress are urging CMS to ramp up oversight on Medicare Advantage plans, especially their use of artificial intelligence tools and algorithm software that dictates how much rehab patients get in places like nursing homes. 

We obtained the letter before it was published last Friday, and lawmakers specifically cited reporting from my colleague Casey Ross and me (you can read those here and here). Those lawmakers were heartened that Medicare’s new rules from earlier this year start to address the problems. But they’re also concerned it’s just window-dressing and that there’s no way to monitor certain things, like whether the algorithms are “self-correcting” if payment denials are overturned in the appeals process.

“Absent prohibiting the use of AI/algorithmic tools outright, it is unclear how CMS is monitoring and evaluating MA plans’ use of such tools in order ensure that plans comply with Medicare’s rules and do not inappropriately create barriers to care,” they wrote to CMS Administrator Chiquita Brooks-LaSure. Read the story and letter, which includes the specific measures these members of Congress want CMS to take.