Bipartisan Letter Urges CMS to Review Medicare Advantage for 2015

A letter sent to CMS Administrator, Marilyn Tavenner, signed by 40 Republican and Democrat Senators urged CMS to review the policy for the Medicare Advantage (MA) program and to maintain payment levels in 2015. While CMS is expected to announce preliminary 2015 MA payment rates, final rates are set to be released by April. Sources estimate CMS may make cuts of six to seven percent for 2015 as other data suggests that only four percent of the $200 billion budget reduction pursuant to the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), has gone into effect presently. The bipartisan letter highlights the higher level of care achieved by the MA in many areas—including breast cancer screening, diabetes care, and cholesterol testing— and emphasizes the devastating effect of cuts to the program, namely the loss of the option of consistent, higher quality care.

ACA and MA

The ACA provides for $200 billion in cuts to the MA program over the next decade. The American’s Health Insurance Plans (AHIP) trade coalition estimates that only four percent of those cuts have been implemented and projects $62.5 billion in cuts will be adopted in 2015. According to AHIP these budget cuts enacted with the adoption of ACA provisions will result in up to three million fewer MA enrollees and an average of an additional $220 in out-of-pocket costs for participating seniors in the next year and up to $3,500 additionally in the next decade. According to the bipartisan letter, 15 million individuals, or 28 percent of all Medicare beneficiaries, are currently enrolled in MA.

Letter to CMS

The letter to CMS endorsed by the 40 Senators asked CMS to “minimize disruption” of the MA payment rates in 2015. In support of this request, several advantages to the program were outlined including: 1) more flexible services and benefits than traditional Medicare; 2) coordinated care; 3) emphasis on preventative care and disease management for chronic conditions; 4) better outcomes and higher quality in regard to fee-for-service programs than Medicare counterparts; 5) more positive outcomes for breast cancer screening, diabetes care, and cholesterol testing initiatives; and 6) lower hospital readmission rates for MA enrollees. With respect to the last factor, the letter refers to a study that found hospital readmission rates for MA enrollees were 13 to 20 percent lower than for regular Medicare FFS beneficiaries. The letter expresses the Senators’ concerns that if the 2015 payment rates for MA were too extreme, “such disruptions inhibit plans from driving the innovation that has resulted in better care and improved outcomes” for MA participants.

Bipartisan Support

Earlier this year, Republican leaders sent a similar letter to the President that also expressed concerns over more potential cuts to the MA program. While that letter mirrored the recent letter to CMS in terms of highlighting the benefits of the MA program, it requested more drastic measures, in the form of a total repeal of the ACA. Several Democrats including Charles Schumer of New York, Kay Hagan of North Carolina, Mark Pryor of Arkansas, and Mary Landrieu of Louisiana have endorsed the recent, more moderate appeal to CMS.